All You Need To Know Going Into Friday’s Trade

Indian stocks may open lower on Friday, as Asian equity markets joined a global selloff amid a rout in bonds with investors on edge as central bankers step up talk of tighter policy conditions.

Here’s a quick look at all that could influence equities on Friday.

Global Market Cues

• U.S. stocks end weak on back of rise in bond yields, selloff in technology shares
• Bond yields surge post release of hawkish minutes from the European Central Bank's June meeting
• Dow Jones declines 0.74 percent at 21,320; S&P 500 down 0.94 percent at 2,409 and Nasdaq down 1 percent at 6,089
• Telecom sector down 2.5 percent on Dow, while I.T. sector saw cuts of 1 percent
• U.S. Index futures are currently trading muted
• U.S. to announce non-farm payrolls data and Fed monetary policy report tonight

Asian Cues

• Bond yields, weak global cues result in weak opening for the Asian markets
• Japan, Australia, South Korea slide in opening trades
• The Singapore traded SGX Nifty, an early indicator of Nifty 50’s performance in India, suggests weak opening for Indian equities

Commodity Cues

• Brent crude trades lower in early morning trade after weak close on Thursday
• Brent crude currently trading close to $47.50 a barrel while WTI trades just below the $45-mark
• Gold trades lower for a second straight session

Indian ADRs

• ICICI Bank -1.10%
• HDFC Bak -0.90%
• Tata Motors -0.66%
• Wipro -0.58%
• DRL -0.36%
• Vedanta +0.19%
• Infosys ends flat

Top Performers This Month

• Caplin Point Laboratories.: Up 25.3 percent
• Videocon Industries: Up 21.3 percent
• Shilpi Cable Technologies: Up 21.3 percent
• Timken India: Up 16.7 percent
• IDFC Bank: Up 15.7 percent

Worst Performers This Month

• JMT Auto: Down 14.1 percent
• Religare Enterprises: Down 11.7 percent
• GVK Power and Infrastructure: Down 7 percent
• Tata Power: Down 6.5 percent
• Adani Power: Down 5 percent

Stocks To Watch

• Indigo says will go for Air India acquisition if EPS accretive
• Cabinet may decide on HPCL stake sale to ONGC this month
• RBL annual report points to divergence in NPA
• GM Breweries reports weak numbers with revenues up 6 percent, PAT down 19 percent, EBITDA down 22 percent, margin 16.4 percent versus 22.3 percent
• Bharat Forge subsidiary signs MoU with Israel’s Aerospace Industries to build new Maintenance Centre in India
• IDFC Bank refuses to comment or deny reports of merger with Shriram group companies
• Emkay looks to raise Rs 150 cr fund raising
• Navin Fluorine shareholders approve sale of unit located at Dahej, Gujarat

Bulk Deals

• Norges Bank bought 1.19 crore shares and Reliance Mutual Fund bought 70 lakh shares in Redington after promoters sold in a block deal.
• Enam group firms bought 81 lakh shares in Redington on MSEI from promoters
• Future Enterprises sold Future Consumer shares to Future Capital Investment in an inter-promoter transfer.
• Government of Singapore bought 1.1 crore shares in Gayatri Projects, a deal that saw India Max Fund completely exit while Mentor Capital sold 33 lakh shares.
• Goldman Sachs sold 25.9 lakh shares in HDIL, reducing its stake from 43.5 lakh shares earlier.
• JP Morgan sold 25.3 lakh shares in Narayana Hrudalaya, reducing its stake from 95.5 lakh shares earlier.
• Diamond trader Manish lakhi bought 1.5 crore shares in Unitech Ltd., worth Rs 10 crores.
• Morgan Stanley bought 20.5 lakh shares in Gateway Distriparks from a Local Government Superannuation Fund
• Franklin Templeton Mutual Fund bought 1 lakh shares in Nesco
• Kotak Asset Management Company bought 20.6 lakh shares in Welspun Corp from Granele.
• East Spring and DSP Blackrock sold 50,800 and 80,900 shares respectively in WPIL Ltd.

Futures & Options Cues

• The Nifty has managed to stay above the 9600 mark for the fourth straight session.
• Nifty futures premium has come down to 1.2 points from 7.7 points earlier giving an indication of cash based accumulation.
• There seems to be limited downside on the Nifty currently with a chance of a breakout on the higher side.
• Total open interest setup shows that 9400-9700 is a very strong support level for the Nifty and breach of that level would require strong force from the bears.
• Call writers are still not writing in at the 9700 mark indicating that bears are not yet confident of any crack in the Nifty.
• The maximum open interest on the Call side is the 9700 mark indicating that there will be temporary resistance there.
• Put writers continue to write at 9500 - 9700 mark. The rising Put-Call ratio also gives confidence to a stable market currently.

Futures & Options Ban

• HDIL has been included in the futures and options ban alongside Indiabulls Real Estate, JP Associates, JSW Energy, Ujjivan Financial Services
• No fresh positions can be taken stocks in F&O ban.

Put-Call Ratio

• Nifty PCR moves to 1.30 from 1.26
• Nifty Bank PCR moves to 1.36 from 1.25
• A higher PCR means a bullish trend

Stocks Seeing High Open Interest Change

• Page Industries: Open interest addition of 22 percent on the short side
• HDIL: Open interest addition of 22 percent on the long side
• Ajanta Pharma: Open interest addition of 12 percent on the short side
• Punjab National Bank: Open interest addition of 5 percent on the long side
• Arvind: Open interest reduction of 8 percent and sees short covering

Fund Flows

• NSE provisional number indicates that foreign institutional investors sold net of Rs 15 crores in cash markets
• Domestic institutional investors bought to tune of Rs 316 crore, the seventh straight day of buying.
• FIIs were net buyers of Rs 1,965 crore in the futures market

Index Play

• The benchmark Nifty50 ended above the 9600 level for fourth straight session
• BSE Sensex traded above the 31,000 mark for 4th straight session as well
• Pharma and IT Index trade are the only two with negative returns for the month
• Nifty Realty Index is the best performing index this month with gains of 4.2 percent
• Nifty Metal index is the only index which recorded gains for all 4 days in July.

Brokerage Radar

CLSA on I.T.

• Poor large deal wins to result in muted Q1FY17
• Organic QoQ constant currency growth to come in the range of -3 percent to 2 percent
• Infosys and HCL to retain guidance and Wipro to guide 1-3% for second quarter
• Cut in EPS in the range of 5-12 percent due to moving dollar-rupee
• Wipro downgraded to outperform from buy; cut target price to Rs 290 versus Rs 295 earlier

CLSA on HDFC Bank

• Maintained Buy; target price hiked to Rs 2,000 from Rs 1,830 earlier
• Expect 20 percent compound annual growth rate (CAGR) in profit
• Subsidiaries profit rose 37 percent in FY17
• May see some pressure due to farm loan waivers
• Bank to invest in next leg of digital platforms
• High growth expected from lending over digital platforms

JPMorgan on InterGlobe Aviation

• Maintained Neutral with target price of Rs 1,130
• Air India deal conclusion will take time—at least 18 months away
• Still too early to factor a bid either way into the share price
• Market to value IndiGo based on current fundamentals

• Nomura maintained buy on ITC; raises target price to Rs 389 from Rs 356 earlier