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