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3 Outcomes Will Move Markets on Monday

1. G20 Summit – 30th November & 1st December

a. Trump meeting with Xi

The meeting on the sidelines took place on Saturday that lasted two and half hours.

The outcome was as expected in our base case that there will be truce and no tariff changes after 1 Jan for next 90 days till then talks will resume at aggressive pace. It is mentioned in reports that China will buy Agriculture (mainly Soybean) , Energy (Crude Oil) & Industrials from USA at larger amounts to reduce the trade gap.

Stocks with Positive Impact – Tata Motors , Motherson Sumi & Metals – Hindalco & JSW Steel

b. Saudi & Russia negotiate deal on OPEC+ Cut

There was very positive attitude between Russia & Saudi leaders that was seen when then sat together in the G20 conference.

The outcome was as expected in our base case that there will be Russia coming on board for OPEC+ cut on Dec 6 but the volume would be revealed on Dec 7th only which would be in terms of % compliance which was 120% in Nov 2018. We estimate that cut would be 1.3mn -1.5mn b/d of which Russia will part with 200K-250K b/d and majority should come from Saudi.

Stocks with Positive Impact - ONGC & Oil India

Stocks with Negative Impact – HPCL, BPCL & IOCL

Crude Range – Will be released post Dec 6 & 7th OPEC+ Compliance.

2. India GDP - 30th November

The outcome was as expected in our base care that the GDP print will be below the estimates. It came at 7.1% vs estimates of 7.4-7.5% mainly due to reduction in manufacturing & mining. Manufacturing saw pull down due to flat growth of passenger cars as they as supported by big value chain. And mining was down due Iron ore mine issues in Goa & certain bans still in place.

Nifty – Will see limited downside impact due to it but data is lagged thus will have limited downside until next data release.

3. Indian Automotive Sales – 3rd December

The outcome was close to our expectations that passenger cars will show flat to slight negative growth which looking into Maruti & Tata Motors number for the segment show the same. Commercial Vehicle is close to its peak as there is 5% decline in CV segment of Tata M

otors due to disbursal issues and volume growth of passenger cars are flat to down which does not incentivize fleet operators. Two wheeler and three-wheeler segment will have to been as all sales number is not out. Tractors showed a good growth on season arrival and festival sales with Mahindra showing a 30% YoY growth.

Stocks with Positive Impact – Escorts & Mahindra & Mahindra

Stocks with Negative Impact – Maruti Suzuki , Tata Motors

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