All You Need To Know Going Into Trade On Feb. 21

Asian stocks traded mixed following a decline in their American counterparts while shorter-dated U.S. Treasuries extended losses amid a massive debt issuance.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.5 percent to 10,383 as of 6:59 a.m.

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DayBreak

Here's a quick look at all that could influence equities on Wednesday.

Global Cues

• U.S. stocks halted a six-day rally as disappointing results from Walmart Inc. weighed on major indexes as the dollar pushed higher.

#BQMarketsNow | U.S. stocks fall with Treasuries, dollar climbs.https://t.co/cEKqVrfJlJ pic.twitter.com/mFhzIjZQVL

• Treasuries fell amid a heavy slate of U.S. debt issuance, with short-end auctions drawing some of the highest yields in almost a decade. The 10-year rate was up to 2.89 percent.
• While speculators are turning bearish, money managers are looking at the highest U.S. yields in years as a buying opportunity in a world where shorter-term Japanese and German notes still carry negative yields.

Walmart's e-commerce sales growth is starting to decelerate. https://t.co/XMBo09qEZj pic.twitter.com/pVUCOy8jpb

Europe Check

• European stocks rose for the fourth time in five days, resuming gains as the U.S. market reopened after a three-day weekend with equities looking to add to last week's rally.

Asian Cues

• Japan's Topix index was flat as of 9:18 a.m. in Tokyo.
• Australia's S&P/200 Index dropped less than 0.1 percent.
• Futures on the S&P 500 rose 0.2 percent.
• The MSCI Emerging Market Index declined 0.5 percent, the biggest drop in more than a week.

Here are some of the key events scheduled for this week:

• The Federal Reserve will release minutes on Wednesday of its Jan. 30-31 meeting, Janet Yellen's last as chair, where officials kept the rate unchanged.
• Fed policy makers speaking this week include New York Fed President William Dudley and Atlanta Fed President Raphael
• Bostic. Cleveland Fed President Loretta Mester is among speakers at the U.S. Monetary Policy Forum in New York City.
• Companies announcing earnings this week include Glencore, Woolworths, Barclays and Royal Bank of Scotland.
• Chinese markets reopen on Thursday after holidays.
• India's Monetary Policy Committee minutes after 5 pm.

SoftBank is said to work with Nomura on $19 billion mobile IPO.https://t.co/OnutS1NR14 pic.twitter.com/lNimO8537G

Commodity Cues

• West Texas Intermediate crude fell 0.2 percent to $61.65 a barrel.
• Gold rose 0.1 percent to $1,330.47 an ounce after dropping 1.3 percent.

OPEC, Russia said to see oil glut dissipating at a faster rate.https://t.co/RT26gzKHLz pic.twitter.com/PQUbg8XT4I

Indian ADRs

Earnings Reactions To Watch

Mahindra CIE Q4 (YoY)

• Revenues up 40 percent to Rs 561.5 crore.
• Net profit up 33 percent to Rs 14.6 crore.
• Ebitda up 72 percent to Rs 58.5 crore.
• Margin at 10.4 percent versus 8.5 percent.

Huhtamaki PPL Q3 (YoY)

• Revenues up 7 percent to Rs 562 crore.
• Net profit up 75 percent to Rs 21 crore.
• Ebitda up 11 percent to Rs 60 crore.
• Margin at 10.7 percent versus 10.3 percent.

Stocks To Watch

• Reliance Industries to acquire 5 percent stake in Eros International Plc for $48.75 million, announces Joint Partnership to set-up an Rs 1,000 crore corpus to co-produce and consolidate content.
• Union Bank said that it classified Rotomac Global account as a non-performing asset in October 2016.
• Bank of Baroda discloses Rs 456.6 crore exposure to Rotomac Global.
• Weizmann Forex postponed the demerger of wind power operations in Karma Energy for fundraising.
• Edelweiss units invoke 3.9 percent stake in Fortis Healthcare; reduces shareholding to 4.17 percent.
• Dilip Buildcon bags order worth Rs 380 crore from NHAI in Karnataka.
• The NSE to exclude futures and options contracts of HDIL from April 27.
• Central Bank of India to consider raising up to Rs 4,835 crore via preferential issue on Feb. 23.
• Nitin Spinners approves preferential issue of 3.32 lakh equity shares at Rs 120.5 apiece to promoters.
• Mawana Sugar to acquire the entire stake of Usha International in Mawana Foods Pvt. Ltd. for Rs 24.83 crore.
• Max India said that its joint venture partner is exploring stake in Max Healthcare.
• High Court asked cops to probe into allegations against Gitanjali Gems promoter Mehul Choksi.

RIL will buy 5% stake in Eros International Plc for $48.75 million. pic.twitter.com/xaZeQ21tbR

Bulk Deals

Fortis Healthcare

• Societe Generale bought 76.64 lakh shares or 1.5 percent equity at Rs 142.95 each, on an average.
• ECL Finance sold 1.49 crore shares, or 2.9 percent equity at Rs 141.38 each, on an average.

Century Enka

• Cygnet Industries bought 4.15 lakh shares, or 1.9 percent equity at Rs 349.5 each.
• Camden Industries sold 4.15 lakh shares, or 1.9 percent equity at Rs 349.5 each.

Kesar Petroproducts

• Aspire Emerging Fund sold 7 lakh shares, or 0.7 percent equity at Rs 44.04 each.

Mangalam Cement

• Cygnet Industries bought 8 lakh shares, or 3 percent equity at Rs 336.5 each.
• Camden Industries sold 8 lakh shares, or 3 percent equity at Rs 336.5 each.

Mangalam Timber Products

• Cygnet Industries bought 6.53 lakh shares, or 3.6 percent equity at Rs 31.5 each.
• Camden Industries sold 6.53 lakh shares, or 3.6 percent equity at Rs 31.5 each.

Fortis Healthcare promoter holding falls to 5.87%.https://t.co/x9mY2hGgAB pic.twitter.com/shFeGJb2q0

Who's Meeting Whom

• NBCC to meet Wellington Management Group on Feb. 21.
• PI Industries to meet HDFC Mutual Fund on Feb. 22.
• Greenlam Industries to meet several fund houses including Edelweiss, JM Finance and Antique on Feb. 22.

Insider Trades

• Apollo Tyres promoter Neeraj Consultants Pvt. acquired 1.05 lakh shares on Jan. 19.
• Lumax Industries promoter Dhanesh Kumar Jain (HUF) acquired 8,500 shares on Jan. 14.
• Lasa Supergenerics promoter Svaks Biotech India Pvt. sold 8,429 shares between Feb. 15-16.
• KCP Sugar & Industries' promoters acquired 50,000 shares between Feb. 15-16.

Rupee

• Rupee ended at Rs 64.79 per U.S. dollar on Tuesday versus Rs 64.21 per U.S. dollar on Friday.

Index Trends

Top Gainers And Losers

F&O Cues

• Nifty February futures closed at 10,343.7, discount of 16 points.
• Nifty March Futures at 10,371, premium of 11 points versus 37 points on Monday.
• All series-Nifty open interest up 22 percent, Bank Nifty open interest up 11 percent.
• Rollover: Nifty Rollover at 30 percent, Bank Nifty at 21 percent.
• India VIX ended at 16.8, up 1.2 percent.
• Maximum open interest for February series at 11,100 call strike; open interest at 48.4 lakh, open interest down 1 percent.
• Maximum open interest for February series at 10,300 Put, open interest at 54.8 lakh, up 20 percent.
• March series maximum open interest at 10,000 Put and 11,000 Call.

F&O Ban

• In Ban: Balrampur Chini, Dish TV, Fortis Healthcare, GMR Infra, IFCI, Jain Irrigation, JP Associates
• New in ban: IFCI
• Out of ban: HDIL, Oriental Bank

Alert: Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put-Call Ratio

• Nifty PCR at 1.10 versus 1.06.
• Nifty Bank PCR at 0.79 versus 0.89.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Macquarie on Indian IT services

• Next fiscal guidance hints at marginal improvement.
• Strong GDP growth momentum in developed markets to aid growth.
• Expect most large companies in India to grow at industry level in the next financial year.
• Headcount growth to remain lower than revenue growth rate.
• Expect fiscal revenue growth to be marginally better than current fiscal.
• Large cap pecking order: HCL Tech > Infosys > TCS > Wipro and Tech Mahindra.
• In Mid-cap space: prefer L&T Infotech and Hexaware.

Deutsche Bank on Ambuja Cement

• Maintained ‘Hold'; raised price target to Rs 275 from Rs 252.
• December quarter results surprise positively.
• Ebitda significantly above estimates due to better volumes and margins.
• Realisations improved marginally, but barely adequate to compensate cost inflation.
• Expect earnings per share to grow at a compounded rate of 17 percent by 2019.

Macquarie on Ambuja Cement

• Maintained ‘Neutral' with price target of Rs 300.
• December quarter's operating income was significantly higher than estimates due to an inventory gain.
• Strong volume push in previous quarter.
• Capacity to constrain volume growth.
• Ambuja-ACC merger final step still awaited.

Deutsche Bank on Titan

• Maintained ‘Buy' with price target of Rs 970.
• Expect growth of exchange gold usage to sustain through the financial years till March 2020.
• Use can increase as flat gold prices since 2013 means gold is not an appreciating asset.
• Exchange gold possess a risk to near to medium term revenue growth.

Macquarie on Titan

• Maintained ‘Outperform' with price target of Rs 907.
• Believe recent bank fraud case has implications on Titan's market share.
• Big opportunity for Titan to accelerate the pace of market share gains.
• Demand from trusted players like Tanishq to further accelerate.
• Big opportunity for Tanishq for store expansion in medium term.
• Compulsory Hallmarking- another step towards formalization of jewellery.

Morgan Stanley on Coal India

• Maintained ‘Underweight' with price target of Rs 221.
• Execution and timelines for private coal mining are key.
• Could take few years for mining to start.
• Positive for India's coal production; Pose downside risk to coal imports.
• For Coal India, key will be aggression in auction bids.

Morgan Stanley on Maruti Suzuki

• Maintained ‘Overweight' with price target of Rs 10,563.
• Expect Japanese Yen to rise sharply against U.S. dollar.
• Impact on next fiscal's earnings per share will be moderate, but the earnings per share is expected to take a hit by 4-8 percent in the financial year-ending March 2020.
• With Maruti's focus on reducing FX exposure, risk is manageable.

Credit Suisse on Tata Steel

• Maintained ‘Outperform' with price target of Rs 860.
• Bhushan bid implies EV at six times adj. Ebitda.
• Valuation not cheap, but with steel cycle picking up; Deal can be EPS accretive.
• Disagree with market concerns about bid being too aggressive.
• Minor working capital plus capex would be needed for the asset.

Macquarie on Tata Steel

• Maintained ‘Outperform' with price target of Rs 800.
• Bid appears 10–15 percent higher than expectations.
• See Bhushan assets as an attractive strategic fit for Tata.
• Quality assets with high integration.
• Assets offer growth optionality and attractive strategic fit.
• Valuations need to evaluate factors beyond headline capacity.
• Stock correction on headline bid provides a buying opportunity.

Credit Suisse on Hexaware

• Maintained ‘Neutral'; raised price target to Rs 330 from Rs 265.
• Strategy looks well thought-out and realistic.
• Business can sustain low to mid-teen growth.
• Not much scope for margin expansion.
• Expect dividend payout to increase.
• Rich valuations and stake sale by Baring an overhang.

Why Fortis remains an attractive bet despite founders' troubles.@darshanvmehta1https://t.co/6fU1NO66H7 pic.twitter.com/4zNRcJaBg4

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