Good Morning !!

Government debt rallies as Europe toughens Covid restrictions, Energy and Banks lead US stocks lower
as investors shift to tech and safe-haven assets

Dollar Index 96.10 & INDIAVIX 14.86 Gold $ 1845.05 & Silver $ 24.63 DOW FUT 35595 +46 (+0.13%)
DOW 35601.98 -268.97 (-0.75%) BRENT OIL 78.19 US 10YRS BOND YIELD: 1.54%

Top Events in Markets in the week ahead

 Fed Minutes: On Wednesday, the Fed will publish the minutes of its November meeting, in
which policymakers decided the US economy was strong enough to start scaling back its
pandemic-era asset purchase program, put in place to bolster the recovery.
 Biden’s Fed Pick: Biden will decide before Thanksgiving whether to keep incumbent Fed Chair
Jerome Powell in place for another term or promote current Fed Governor Lael Brainard to the
position.
 U.S. Data Dump: U.S. is to release a string of economic data on Wednesday before markets
close for Thursday Holiday.
 Black Friday: The holiday shopping season gets underway in earnest on Friday, against a
background of soaring inflation and supply shortages.

Nifty SetUp – Unless the Nifty moves back above 17850, it will continue to trade weak with a corrective
undertone. Stay Selective, avoid building large leveraged positions on either side.
BankNifty SetUp – BankNifty the 20 week average is at 37111 as the last support and previous swing
low is at 36876.

Data Crunching -- FPIs sold IT stocks worth $ 1,438 million (Rs 10,780 crore) in October out of the total
outflow of $ 1,807 million (Rs 13,740 crore), the data from the NSDL show. They bought banking
and auto stocks worth $ 442 million (Rs 3,315 crore). Foreign portfolio investors (FPI) were net buyers in
the Indian markets at Rs 19,712 crore in November so far. As per depositories' data, they invested Rs
14,051 crore into equities and Rs 5,661 crore in debt segment between November 1-18.

Important Update on Reliance

RIL and Saudi Aramco have mutually decided not to go ahead with proposed 20% stake sale in RIL’s
hydrocarbon business in light of company’s focus on green energy. Our valuation didn’t factor in any premium
from the proposed deal which we believe would have been value accretive for both sides as RIL would have
got access to latest petrochemical technology while Aramco would have got access to a large crude buyer. We
maintain our BUY on RIL given multiple growth drivers across recovering hydrocarbon, retail and telecom
business.

 Unlikely to change much for RIL, that has successfully raised cash to turn net debt-free &
committed investments to build a renewable energy ecosystem.
 The move to scrap the deal will, in fact, benefit RIL as it will not have a holding company
discount as envisaged earlier because of the creation of an O2C subsidiary
 Reliance is expected to generate Rs 2.5 lakh crore in operating income in the next two years,
which would be sufficient to undertake future investments and reduce debt

Triggers for the Move --

Reliance is moving ahead on a much larger scale in the new materials business and that is probably
pushing them to look at the tie-up differently and not confining it to just O2C business - If you look at
Aramco’s point of view, what they're thinking is this oil business is not the future. Their future is also in
the new material business. On the later stage, Reliance will have Aramco joining hands for the new
materials business

Regards,
Vikram Kasat
Head - Advisory and Western Region
Prabhudas Lilladher Pvt. Ltd.
Board Line No. +91 22 66322222
Direct No. +91 22 66322298
Mobile No. +919372792797
http://www.plindia.com

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