All You Need To Know Going Into Trade On Dec. 4

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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BQ Live

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.

Asian Cues

• 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.

Commodity Cues

• 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.

Indian ADRs

Stocks To Watch

Bulk Deals

• 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.

Insider Trading

• NOCIL promoter Mafatlal Industries sold 5 lakh shares on Nov. 29.

(As reported on Dec. 3)

Trading Tweaks

• 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.

F&O Cues

• 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).

Fund Flows

Put-Call Ratio

• Nifty PCR at 1.68 from 1.7
• Nifty Bank PCR at 1.01 from 1.17

Get a detailed drawdown of derivatives on BloombergQuint's F&O page.

Brokerage Radar

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

Edelweiss

• 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.

JPMorgan

• 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.

Morgan Stanley

• 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.

On HUL

Jefferies

• 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.

CLSA

• 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.

UBS

• 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 target price given potential overhang of excess supply.