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All You Need To Know Going Into Trade On Dec. 10

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U.S. stock futures declined with equities in Asia amid a potential escalation of tensions between Washington and Beijing, and after signs China’s economy remains under pressure.

Futures on the S&P 500 Index dropped 0.8 percent and shares fell in Australia, Japan and South Korea, building on a weak Friday session when U.S. equities sank more than 2 percent. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 1.1 percent to 10,621 as of 7:04 a.m.

BQ Live

Here’s a quick look at all that could influence equities today.

U.S. Market Check

  • U.S. stocks plunged, capping the worst week for the S&P 500 Index since March, as the Trump administration pressed its trade war with China and the latest batch of economic data added to concern that growth has peaked.
  • The yield on benchmark 10-year Treasuries dropped four basis points to 2.85 percent.

Also Read: It Took Just One Week for a $1 Trillion Wipeout in U.S. Stocks

Asian Cues

  • Japan’s Topix index fell 1.5 percent.
  • Australia’s S&P/ASX 200 Index lost 1.8 percent.
  • FTSE China A50 futures slid 0.4 percent and Hang Seng Index futures were flat late Friday.
  • Futures on the S&P 500 Index were down 0.8 percent.

Also Read: Contrarians Made the Right Market Calls in 2018. Here's What They're Saying Now

Commodity Cues

  • West Texas Intermediate crude dropped 0.3 percent to $52.44 a barrel.
  • Brent crude traded 0.55 percent higher at 62.01 per barrel.
  • Gold was little changed at $1,248.99 an ounce after gaining 0.9 percent Friday.

London Metal Exchange

  • Aluminium halted a two-day decline, up 0.98 percent.
  • Copper halted a three-day decline, up 1.24 percent.
  • Nickel ended 0.55 percent higher.
  • Zinc ended lower for the second day, down 0.23 percent.
  • Lead ended higher for the second day, up 0.55 percent.
  • Tin ended 0.4 percent higher.

Indian ADRs

Stocks To Watch

  • United Breweries’ CFO and Director Steven Bosch resigned from the company with effect from Jan. 01 2019.
  • Escorts transferred existing RT Crane business to its JV company with Japan-based Tadano for Rs 35 crore, on a slump sale basis.
  • Eid Parry operational details for November: Sugar sold at 0.31 LMT and alcohol sold at 48LL.
  • HEG said in its investor presentation that there could be a window of opprtunity to export graphite electrodes to China till 2022 as new electrode capacities in China would take longer time to come up than steel capacity.
  • Syndicate Bank reduced MCLR by five basis points across the six-month and one-year tenure instruments with effect from Dec. 10. Six-month MCLR at 8.70 percent and one-year MCLR at 8.75 percent.
  • Capital India’s board approved rights issue of 3.5 crore equity shares at Rs 72 each aggregating to Rs 249 crore.
  • Tata Sponge: Government gives environmental clearance to increase the production capacity of direct reduced iron plant to 4,65,000 TPA from 4,25,000 TPA
  • Indian Oil to to consider buyback and dividend on Dec. 13.
  • MERC finds increase in billing for Adani electricity customers to be unduly high; to appoint fact finding panel to check why bill amounts have shown unusual increase.
  • Sugar stocks in focus as Oil Ministry said that the ethanol blending in petrol would double to 8 percent.

Earnings Reaction To Watch

IFCI (Q2, YoY)

  • Net interest income at - Rs 15.9 crore versus Rs 223.5 crore.
  • Net loss at Rs 16.6 crore versus net loss of Rs 293.7 crore.
  • Other Income of Rs 296.8 crore in the current quarter.

Data To Watch

  • 10:30am: India car sales data for month of November.

Offerings

  • RattanIndia Infrastructure OFS for retail investors.

Who’s Meeting Whom

  • Shopper’s Stop to meet First State Stewart Asia, Axis Capital and other investors from Dec. 11-12.
  • PPAP Automotive to meet Ambit Capital on Dec. 10.
  • IIFL Holdings to meet Southern East Management on Dec. 10.
  • Globus Spirits to meet LIC Mutual Fund, ICICI Pru AMC and other investors on Dec. 10.
  • Shriram City Union Finance to meet TenCore Partners, Dolat Capital Makets and other investors from Dec. 10-13.

Insider Trades

  • Electrosteel Castings promoter acquired 80k shares from Nov. 30 to Dec. 05.
  • JM Financial promoter and director Vishal Kampani acquired 50,000 shares on Dec. 05.
  • Axis Bank promoter LIC sold 30.4 lakh shares from Dec. 04-06.
  • Lemon Tree Hotels promoter group Sparrow Buildwell acquired 31,200 shares from Dec. 05-06.

Money Market Update

  • Rupee ended at 70.81 a dollar on Friday versus 70.90 a dollar on Thursday.

F&O Cues

  • Nifty December futures closed trading at 10735, premium of 41 points
  • Max OI for December series at 11,000 Call, OI at 37.1 lakh shares.
  • Max OI for December series at 10,500 Put, OI at 35.4 lakh shares.

Put-Call Ratio

  • Nifty PCR at 1.47 from 1.44.
  • Nifty Bank PCR at 1.26 from 0.98.

Fund Flows

Brokerage Radar

Nomura on Exit Polls

  • Exit polls give BJP cold sweat; Set to lose Rajasthan; MP and Chhattisgarh remain nail biters.
  • Generally state election outcomes have been known to be a poor leading indicator of general elections.
  • BJP’s drubbing to mean that farm unrest is real; increase in MSP haven’t yielded political dividends.

Deutsche Bank Research on REC-PFC Deal

  • Limited benefits for combined entity; no material change for REC.
  • See negative impact on capital adequacy, credit rating and funding cost for PFC.
  • Buyout at premium will be negative for PFC shareholders.

Deutsche Bank Research on Consumer Durables

  • Next year's outlook positively guided; September quarter was impacted by high-base, excess inventory and weak season.
  • Positive outlook on domestic projects business with 2-5 year upcycle.
  • Election to have limited one-quarter impact on project business.
  • Voltbek raised capex to Rs 1000 crore to fund expansion in Tier II/III cities.

Morgan Stanley on Cement

  • Industry hiked prices in November, but channel checks show reversals in price trends in December
  • Prices flattish QoQ in North, Central and East and a marginal drop in West and South in September quarter.
  • Cost decline should support margins sequentially and on a yearly basis.

HSBC on Suzlon Energy

  • Maintained ‘Buy’; cut price target to Rs 9.5 from Rs 14.
  • Recovery post transition pain has been slower and shallower than expected.
  • Slower execution issues are being addressed; strong order book lends two years growth visibility.
  • Cut TP to factor in lower industry volumes.

Axis Capital on RBL Bank

  • Maintained ‘Buy’; hiked price target to Rs 660 from Rs 575.
  • Reiterate long-term outlook and belief in execution capability of the bank.
  • Bank is significantly investing in future and has capability to leapfrog into league of big banks.
  • Expect RBL to scale up materially on more share of high-yielding business, granular and diversified loan book, pan-India presence and room for operating leverage.

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