Expect market to open on a flat note on account of domestic cues. Quarterly GDP fell to 6-year low at 4.5% is a major concern in the market. Weak Auto monthly sales growth is a major concern in the in the market. Moreover, after a long time FIIs were net sellers Rs1892cr on last Friday. However, traders buy on dips in the market. Positive factor that the tariff hike by the telecom players after a long time and government may announce GST on infra sectors. Moreover GST collection spiked to 3-month high of Rs1.03lakh cr during the month of November. SGX Nifty is down by 7 points
Asian markets open on a strong note. Nikkei and Hong Kong Index gained 1% and half percent respectively.
U.S. Dow slipped 0.4% lower on Friday, ending a four-day winning streak, as investors worried about the deterioration in U.S.-China trade relations after a bill supporting Hong Kong protesters was signed by President Trump late on Wednesday. Investors were concerned that a U.S. – China trade deal may be in jeopardy after President Donald Trump signed legislation supporting Hong Kong protesters. In response China summoned the U.S. ambassador to protest and warned the move would undermine cooperation with Washington. A trade deal with China needs to be signed before the Dec. 15 deadline.
Sectors – Telecom, Auto and Banks
Actionable – Bharti Airtel, Reliance Industries, RBL Bank and SBI
Brokers Radar – JSW Steel TGT raised UBP to 315 from 290. UBS TGT Tata Steel 360, Maruti BUY JP Morgan TGT 7900, Yes Bank – Nomura TGT 63, Jefferis TGT 38, Macquary TGT 50. Credit Swiss TGT on Reliance Industries 1551
Market summary – GDP growth falls to 4.5% of 6-year low in September quarter, Granules India gets Establishment inspection report from USFDA, Jagran Prakashan to consider proposals for buy-back shares on December 9, Bharti Airtel’s board meeting will be held on 4th December for fund raising plan, JSW Cement delay adds to IPO drought as Indian Economy Slows, Ujjivan Small Finance Bank IPO worth Rs750cr. RBI files for insolvency proceedings against DHFL. Yes Bank approved fundraising of $2bn. Chanda Kochhar moves High Court against ICICI Bank over termination, RBL Bank’s Board Backs Its plan to raise Rs825cr. GST Reationalisation on card, Telecom player to hike tariffs 30-40%.
Auto November sales – Maruti reported good monthly sales volume at 139133 units, up 2.3% on MoM, Eicher reported 65744 units, down 8% YoY – good number, M&M 71050 unit, down 12% YoY and Tata Motors reported 55074 units.
Market that Week -Auto November Monthly sales data, key economic datasets, including GDP growth, core sector and fiscal deficit data, which were released post market hours on Friday, will impact trade today. The Monetary Policy Committee (MPC) of the Reserve Bank of India is also scheduled to meet this week. RBI Meeting Credit policy will be held on 5th December and PMI data. Besides these, increasing tensions between the US and China will also dictate the movement of benchmark indices. OPEC meeting will be held on 5th December.
GDP growth falls to 4.5% of 6-year low in September quarter – India’s annual growth in gross domestic product or GDP fell to 4.5% for the quarter ended September 30, down from 5% in the previous three months and 7% for the corresponding period of 2018. Economists also see RBI cutting its repo rate for the sixth time in a row, by 25 basis points, to 4.90% at its December 3-5 meeting. FM r Nirmala Sitharaman on Wednesday, in parliamentary debate, said the economy faced a slowdown but no “recession” and cited several government measures to support economic growth. On Thursday, she sought parliament’s approval to spend an additional ₹21,000 crore this fiscal.
Friday, Nifty halted their record closing streak ahead of the release of quarterly GDP growth data. There was profit booking pulled down Nifty by 95 points (0.8%) to close at 12056. Auto, Metal, banking, Pharma and Tech stocks witnessed profit booking. However, mid-cap and small cap Index were green on account. Nifty 500 stocks advance decline ratio 1:1.1. Nifty month on month gained by 1.5% while 9.3% gained in the last three consecutive months. Asian, Europe and US Future declined.
GST Reationalisation on card – Media new that the Finance Minister says that the government is working with states to further rationalization GST rate and will announce major infrastructure projects by the middle of the month – Positive for the market sentiment on hope of further cut GST rate.
Watch on Telecom stocks – Media news that the telecom players like Bharti Airtel, may hike tariffs 30-40% – Big positive on Bharti Airtel, Idea and Reliance Industries. Reliance Jio to hike tariff 40% from 6th December.
Ujjivan Financial Bank – IPO will be open today at Rs36-37 a share worth Rs750cr – Positive for Ujjiban Financial
Eveready Industries – High Court approved Eveready Ind asset sales plans – Positive for Eveready Industries.
Aramco IPO update – Aramco IPO $44.3/BN IPO has been oversubscribed by 1.7% and two days left for IPO closing – Expect positive for Reliance (may invest by Aramco).
RBL Bank’s Board Backs Its plan to raise Rs825cr – RBL Bank’s board has approved the lender’s plan to raise about Rs 825 crore via preferential issue of shares plans to sell 2.4cr shares at Rs 340.70 a share. Of the Rs 825 crore, Bajaj Finance and East Bridge Capital Master Fund I will be investing nearly Rs 150 crore each, WF Asian Reconnaissance Fund will infuse Rs 224 crore, lshana Capital Master Fund and FEG Mauritius FPI will be investing about Rs 214 crore and 86 crore, respectively – Fund raise by RBI will be positive for RBL Bank
RBI Files For Insolvency Proceedings Against DHFL – The Reserve Bank of India said it has filed for insolvency proceedings to be initiated against Dewan Housing Finance – Avoid Dewan Housing
LIC Housing Rs1935cr December 2021 bonds at 7.03% … positive for LIC Housing as lower interest rate bond Yield.
Yes Bank Fundraising of $2bn – Yes bank has taken a decision to raise $2bn through preferential allotment, details of which will be finalised at the next board meeting on Dec. CFO 10. Ravneet Gill has said that he would be looking to raise at least $1 billion at a time when the lender needs to clean-up its balance sheet and return to growth. Of the $2 billion in potential investment commitments revealed by Yes Bank, $1.8 billion has come from family offices, while the remaining $200 million is from institutional investors. From the large chunk of potential investments coming in from family offices, two investors—Erwin Singh Braich/SPGP Holdings and Citax Holdings & Citax Investment Group—are in talks to invest $1.7 billion – Positive for YES Bank to Fund raise proceed to cleanup balance sheet… however traders wait for QIP price.
BHEL, GAIL, Hind Zinc & NALCO likely to be on selloff list: CLSA – Mumbai: The government will likely need sizable privatisation income over the next five years given the fiscal pressures, with BHEL, GAIL India, Hindustan Zinc and NALCO likely to be the possible candidates, according to foreign brokerage CLSA (ET Report) – Expect positive for BHEL, GAIL, Hindustan Zinc and Nalco if exit by the govt.
HCL shareholders’ approve proposals to hike authorised share capital, issue bonus shares – HCL shareholders’ approve proposals to hike authorised share capital, issue bonus shares – Positive
ICICI Bank – Chanda Kochhar moves High Court against ICICI Bank over termination – Former ICICI BankNSE -1.26 % chief executive, Chanda Kochhar, has moved the Bombay High Court against her ex-employer for terminating her when the bank had accepted her request for an early retirement – Not yet any impact on ICICI Bank, Any decline will be a buying opportunity.
Maruti – The country’s largest car maker Maruti Suzuki said it has crossed milestone of 20 million passenger vehicle cumulative sales in the Indian market. The company accomplished this landmark number in less than 37 years of selling its first car on December 14,1983, when it first rolled out the iconic Maruti 800. – Weak sales volumes in the last few month is concern … we are long term positive on Maruti.
Adani Ports -New World Fund Inc on Friday offloaded more than 1 crore shares of Adani Ports and Special Economic Zone Ltd for over Rs 401 crore in an open market transaction. Bulk deal data on the BSE showed that 1,06,87,163 scrips were sold at an average price of Rs 375.34 apiece. This took the total deal value to Rs 401.1 crore – Avoid Adani Ports
Watch on Jagran Prakashan – Company to consider proposals for buy-back shares on December 9
Watch on Bharti Airtel – Company’s board meeting will be held on 4th December for fund raising plan
Watch on REC – Rating agency Fitch has assigned India-based REC (BBB-/Stable) proposed US dollar notes a ‘BBB-‘ rating while USD Bond Investor Meetings From Dec. 2 in Asia and Europe starting from today , the note is part of REC’s USD 5bn global medium-term note programme – Positive for REC to raise money from overseas.
JSW Cement delay adds to IPO drought as Indian Economy Slows – JSW Cement postponed its $600 million listing due to a delay in the company’s capacity growth plan – We are positive on JSW Steel
Watch on Ujjivan Financial, it has gained a total of 18 percent last six trading sessions ahead of its subsidiary Ujjivan Small Finance Bank IPO worth Rs750cr – to dilute Ujjivan Finance promoters stake according by RBI rules. – Positive for Ujjivan Finance as 10% quota for Ujjivan Finance shares holders (market talk that the Ujjivan Small Finance Bank IPO witnessed 30-40% premium in the grey market) .
Dilip Buildcon gets Letter of Acceptance for EPC contract worth Rs1360cr – positive for Dilip Buildcon
Shriram Transport Finance to consider debt issue terms in December – Fund raise planning will be positive
Rajesh Exports wins orders worth Rs863cr – positive
Granules India gets Establishment inspection report from USFDA, company says Chantillay Virginia unit gets 2 observation – Stock declined 1% after the news …Company reported good quarterly results and media news that the promoters is planning to stake sale
Delhi High Court defers hearing on a petition to probe Indiabulls Housing – Delhi High Court defers hearing on a petition to probe Indiabulls Housing Finance Ltd. to Feb. 28. Court gives more time to Sebi, RBI, SFIO, and govt to file their submissions in writing – Avoid on the stock
India Home First Finance Company files for up to Rs1500cr IPO – Expects positive for other NBFC stocks like LIC Housing, M&M Finance, AB Capital, L&T Finance
Government to meet bankers on Dec. 4 to select advisers for sale of stake in Tehri Hydro Development Corp and North Eastern Electric Power Corp – positive for economy to reduce fiscal deficit
NTPC adds 250MW unit of Barauni Station to installed capacity – Positive for NTPC
ITC signs partnership agreements with the Federation of Indian Export Organisations and Federation of Indian Chambers of Commerce and Industry during World Export Development Forum – Positive for ITC long term
Media news that the Cipla leads race for some Wockhardt business unit – Moneycontrol – Positive for Wockhardt to repay debt.
HCC will be able to execute arbitration awards of about 15.8b rupees after India’s top court struck down an amendment in the country’s arbitration law – Avoid HCC – Poor debt is a concern.
[12/2, 9:15 AM] Raunaq Singh: Nifty index witnessed selling pressure on the first day of new F&O series. It started correcting from initial trades and continued to make lower lows in first half of the session. However, due to some bounce in the later half, Nifty ended the session a tad above 12050 levels and formed a Red body candle on daily chart while It concluded the week with gain of 1.19% and formed a green body candle on weekly chart
● A positive momentum after the formation of three consecutive Doji candles on weekly chart is a positive sign for the market. Thus, till the time, Nifty holds above 11980 – 12000 zones, we maintain our positive stance for an up move towards 12150 then 12250 zones
● On December monthly options front, maximum Put OI is at 12000 followed by 11500 strike, while maximum Call OI is at 12500 followed by 12600 strike. We have seen Call writing in 12100 and 12300 strike while marginal Put writing is seen at 11800 strike. Option data suggests a shift in trading range in between 11900 to 12300 zones.
● India VIX fell down by 0.66% at 13.89 levels. Till VIX remains below 15 zone, we may see continuation in ongoing optimism in coming days too
● Bank Nifty started the session on negative session and corrected in first half of the session. However, some buying interest is witnessed in the later half and it formed a small red body candle on daily chart. It took support around its previous swing high of 31783 and rebounded piercingly, which is positive sign for the index
● It made higher high for seventh consecutive week and formed a big green candle on weekly chart, which clearly shows strength in the index. Until it sustains above 31783 levels, an up move toward 32500 and 32800 levels cannot be ruled out
● Longs in Bharti Infratel, L&T Fin, NBCC, PVR and Tata Global
● Shorts in Yes bank, Motherson Sumi, Apollo Tyre, Tata Motor and ZEEL