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Asian stocks slipped Tuesday, signaling fading investor applause for the U.S.-China trade truce.
Stocks in Japan, Korea and Australia posted modest losses while Hong Kong futures pointed lower. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.26 percent to 10,910.50 as of 7:25 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- Stocks rallied after the U.S. and China declared a truce in their trade war, while the dollar weakened and oil gained.
- The yield on benchmark 10-year Treasuries was little changed at 2.98 percent.
- The MSCI Asia Pacific Index fell 0.1 percent.
- Japan’s Topix Index fell 0.2 percent.
- Hang Seng futures fell 0.6 percent overnight.
- The S&P/ASX 200 fell 0.2 percent.
- West Texas Intermediate crude rose 0.3 percent to $53.26 a barrel.
- Brent crude traded 0.2 percent higher at $61.83 per barrel.
- Gold was flat at $1,230.80.
London Metal Exchange
- Aluminium ended higher for the fourth day, up 0.8 percent.
- Copper ended 1.5 percent higher.
- Zinc ended higher for the fourth day, up 1.6 percent.
- Nickel ended higher for the fourth day, up 0.45 percent.
- Lead snapped a three-day rally, down 0.33 percent.
- Tin ended 2.5 percent higher.
Stocks To Watch
- Sun Pharma highlighted that there was no wrongdoing and gave clarity on the recent queries raised on the company. Founder Dilip Shanghvi said that the points raised in the sales note pertained to information which was sourced from public domain. He added that while few of the issues were not related to the company, and some were factually incorrect and were 10-15 years. He also said that the company had not received any communication from the SEBI on reopening the insider trading case.
- GAIL said that it will challenge CESTAT Delhi’s order of demand notice of Rs 2,822 crore at a higher forum. The order had allowed the appeal filed by the Department and held that the product manufactured by GAIL at its Gas Processing Plants was 'Natural Gasoline Liquid ' and not Naphtha. This had attracted an additional Excise Duty of Rs.15 per liter. Company said that necessary disclosure in Notes to Accounts under contingent liability for aforesaid show-cause notices for financial year 2017-18 had been made.
- Axis Bank clarified the news on IT Department probing the company’s staff for alleged facilitation of benami deals. It said that the matter was reported in media in March and an internal inquiry had already been conducted by the bank.
- Uflex’s global film manufacturing arm received an U.S. patent that covers the entire categories of BOPET films. The company got the exclusive rights of manufacturing of the special film in the U.S., Europe and India.
- NCC received two new orders worth Rs 220.2 crore for November from state government agencies. Of this, Rs 174.2 crore pertains to the electrical division while Rs 46 crore is for water division.
- NMDC revised Lump Ore prices to Rs 3,550 per ton and Fines at Rs 3,110 per ton, effective Dec.1.
- Welspun Enterprises arm signed a concession agreement with NHAI for a four-laning construction project in Tamil Nadu. Bid project cost stood at Rs 2,004.51 crore
- Omax Autos board approved the proposal of setting up new industrial unit for manufacture and supply of ‘Long Member’ in Uttar Pradesh. Project would cost Rs 165 crore and the proposed capacity addition will be 144 thousand Long Member.
- VST Tillers Tractors’ Power Tillers sales were at 2108 units and Tractors sales at 628 units for November.
- BLS International Services: Taiyo Greater India Fund sold 11.6 lakh shares or 1.13 percent equity at Rs 109.24 each.
Who’s Meeting Whom
- Great Eastern Shipping to meet HDFC Pru AMC, ICICI Pru Life, Tata MF on Dec. 4
- Dr Lal PathLabs to meet JN Asia Infra Fund and HDFC Life on December 4
- Shriram Transport Finance to meet Moon Capital and Wellington Management on Dec. 4.
- SKF India to meet Franklin Templeton, Premji Invest and ADIA on Dec. 4.
- NOCIL promoter Mafatlal Industries sold 5 lakh shares on Nov. 29.
(As reported on Dec. 3)
- Vikas Ecotech price band revised to 20 percent.
- Bharat Road Network price band revised to 10 percent.
Money Market Update
- Rupee snapped its four-day winning streak and closed at 70.46 against the dollar versus 69.58 on Friday.
- Nifty December futures closed trading at 10924, premium of 40 points.
- Max open interest for December series at 11,000 Call (open interest at 27 lakh shares).
- Max open interest for December series at 10,000 Put (open interest at 38.5 lakh shares).
- Nifty PCR at 1.68 from 1.7
- Nifty Bank PCR at 1.01 from 1.17
Emkay on Gulf Oil
- Initiated ‘Buy’ with a price target of Rs 1,150.
- Strong volume growth trajectory leading to market share gains.
- Margins likely to recover with proactive pricing, premiumisation and softer base oil prices.
- Expect better sector outlook with premiumisation opportunities.
UBS on UltraTech Cement
- Maintained ‘Buy’ with a price target of Rs 4,700.
- Cut FY19-21 EPS estimates by 11-14 percent to factor in Binani acquisition.
- Expect pricing benefits within few months and cost synergies to be realised throughout the next financial year.
- Improving product mix and easing cost elements could boost margins.
On Sun Pharma
- Maintained ‘Reduce’; cut price target to Rs 430 from Rs 500.
- Seems to be no end to Sun Pharma’s woes.
- Questions regarding unsecured loan extended to Aditya Medisales remain unanswered.
- Other issues were dated, but enough to question the track record of Sun Pharma.
- Unless Sun re-evaluates its structures and transactions, these issues will overshadow overall performance.
- Maintained ‘Neutral’ with a price target of Rs 525.
- Sun Pharma did not receive any query from SEBI, but the news does create some uncertainty.
- Medium-term earnings trajectory will be crucial for a sustained stock recovery.
- Expect ramp-up of specialty to improve margins over time.
- Maintained ‘Underweight’ with a price target of Rs 470.
- Management believes that corporate governance issues raised appear to be either incorrect, unrelated, misrepresented, and/or old issues.
- Company flexible about reversing certain related/non-related party arrangements.
- Maintained ‘Hold’ with a price target of Rs 1,650.
- GSK deal seems strategically positive and financially accretive.
- See potential 6-9 percent EPS accretion in 2020-2021.
- Execution will determine medium to long term accretion.
- Maintained ‘Outperform’; hiked price target to Rs 2,010 from Rs 1,750.
- View the deal as clear positive; EPS accretive even without synergy.
- GSK’s core brands are highly underleveraged.
- Core brands provide relevant scale, growth potential and profitability.
- Maintained ‘Neutral’ with a price target of Rs 1,800.
- Deal EPS accretive despite the exit premium given to GSK shareholders.
- Concerns regarding relevance of Horlicks may be un-warranted.
- Not raising TP given potential overhang of excess supply.
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