Asian stocks look set to close out a lackluster week on a positive note on Friday as investors continue to debate the outlook for central bank policy normalisation and the impact of higher bond yields.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.1 percent to 10,399 as of 7:10 a.m.
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DayBreak
Here's a quick look at all that could influence equities on Friday.
Global Cues
- U.S. stocks eked out a gain to halt a two-day slide, but not before erasing an advance that topped 1 percent as investors grappled with the threat from higher interest rates.
- The S&P 500 Index faded from session highs in afternoon trading for a fourth straight day. ended in the green after briefly turning lower in last trading as the index coughed up its biggest advances for a fourth straight day.
#BQMarketNow | U.S. stocks end mixed as bonds gain.https://t.co/K0uyhT9Gqo pic.twitter.com/QvoxSb4IoI
- The 10-year Treasury yield interrupted its march toward 3 percent. The dollar snapped a four-day rally.
- The Cboe Volatility Index slipped below 20, well above its average for the past year, when unprecedented calm gripped markets.
Europe Check
- European stocks fell for the first time in three days as companies from Ingenico to Moneysupermarket.com tumbled on earnings, while a late-afternoon recovery in energy shares moderated declines.
Asian Cues
- Japan's Topix Index was up 0.5 percent as of 9:48 a.m. in Tokyo.
- Futures on the S&P 500 climbed 0.2 percent.
- Australia's S&P/ASX 200 rose 0.5 percent.
- South Korea's Kospi was up 1 percent.
Here are some of the key events scheduled for this week:
- U.K. PM Theresa May is locking down her ministers in a bid to agree what kind of post-Brexit trade deal they want from the EU.
- Companies announcing earnings include Royal Bank of Scotland.
Commodity Cues
- West Texas Intermediate crude slipped 0.1 percent to $62.68 per barrel after climbing Thursday thanks to an unexpected drop in American supplies unexpectedly shrank.
- Brent Crude snapped two-day gains, declining 0.2 percent to $66.25 per barrel.
- Gold futures were down 0.2 percent to $1,329.84 an ounce.
#BQMarketsNow | Commodities rally in China, Hong Kong equity futures rise 1% https://t.co/K0uyhT9Gqo pic.twitter.com/S0tl1qnhmH
Indian ADRs
Earnings Reaction To Watch
Sanofi India Q4 (YoY)
- Revenues up 11 percent at Rs 670 crore.
- Net profit rose 43 percent to Rs 76 crore.
- Ebitda up 23 percent at Rs 134 crore.
- Margins at 20 percent versus 18 percent.
Merck Q3 (YoY)
- Revenues up 22 percent at Rs 304 crore.
- Net profit rose 42 percent to Rs 27 crore.
- Ebitda up 30 percent to Rs 30.5 crore.
- Margins at 10 percent versus 9.4 percent.
KSB Pumps Q3 (YoY)
- Revenues jumped 31 percent to Rs 328 crore.
- Net profit up 17 percent at Rs 27 crore.
- Ebitda up 12 percent to Rs 42.5 crore.
- Margins at 13 percent versus 15.1 percent.
Stocks To Watch
- Fortis Healthcare: All existing F&O contracts will expire on March 28, and no fresh contracts will be available if the firm fails to submit results for quarters ended September and December 2017 by March 1.
- Federal Bank: Board approved buying 26 percent stake in Equirus Capital.
- Mahanagar Gas will bid for more city gas networks in the next auction.
- Genus Paper & Boards signed two MOUs for setting up Kraft Paper manufacturing plant.
- Bank of Baroda said that it has no exposure to LOUs issued by PNB in the alleged fraud case involving Nirav Modi.
- Dilip Buildcon bagged engineering, procurement, and construction project worth Rs 157 crore from Karnataka government.
- Aditya Birla Idea Payments Bank has commenced operations.
- Great Eastern Shipping completed its sale of vessels.
- Adani Transmission received letter of intent for one inter-state transmission project in Rajasthan.
- JSW Group offers highest bid for Jaypee Infra, offering a little over Rs 9,900 crore to bank (Economic Times)
- Axis Bank asks CIO Amit Sethi to resign following whistleblower complaint. (Economic Times)
Scam-hit PNB is said to bank on Bhushan sale for capital boost.https://t.co/xNlJAk84ui pic.twitter.com/ffq3s1JMqU
Bulk Deals
- Fortis Healthcare: Earc Trust SC 304 sold 36.93 lakh shares, or 0.7 percent equity, at Rs 147.42 each.
- Karnataka Bank: Macquarie Emerging Markets Asian Trading sold 17.48 lakh shares, or 0.6 percent equity, at Rs 128.72 each.
Indiabulls Real Estate
- UBS Principal Capital Asia bought 1.61 crore shares, or 3.4 percent equity, at Rs 211 each.
- Orient Global Cinnamon Capital sold 1.64 crore shares, or 3.5 percent equity, at Rs 211.01 each.
Singh Brothers say they need time to resolve issues.https://t.co/1aXUUlAhYy pic.twitter.com/jXuBx6fJaU
Who's Meeting Whom
- Eicher Motors to meet Cartica Management on Feb. 23.
- KEC International to meet Kotak Securities on Feb. 26.
Insider Trades
- KCP Sugar & Industries promoter bought 30,000 shares from Feb. 19 to Feb. 20.
- Meghmani Organics' promoter bought 10,000 shares on Feb. 16.
- Navneet Education promoter bought 20 lakh shares on Feb. 17.
- Apollo Tyres' promoter bought 40,000 shares on Feb. 21.
- GE Shipping promoter bought 18,000 shares on Feb. 20.
- Om Metal Infraprojects' promoter bought 49,900 shares on Feb. 21.
Rupee
- Rupee ended at Rs 65.05 per U.S. dollar versus Rs 64.77 per U.S. dollar on Wednesday, the lowest since Nov. 20, 2017.
Anil Agarwal's Vedanta expected to benefit from higher commodity prices and capacity expansion, reports @OnlyNickey.https://t.co/789VTw0FqB pic.twitter.com/MWtHq5mUg1
Index Trends
Top Gainers And Losers
F&O Cues
- Nifty March Futures trading at 10,389, premium of 6 points versus 17 points.
- All series-Nifty Open Interest up 10 percent, Bank Nifty Open Interest unchanged.
- Rollover-Nifty Rollover at 62 percent, Bank Nifty at 65 percent.
- India VIX ended at 14.8, down 6.8 percent.
- Maximum Open Interest for March series at 11,000 call strike, Open Interest at 20 lakh, OI up 9 percent.
- Maximum Open Interest for March series at 10,000 Put, Open Interest at 27 lakh, up 10 percent.
F&O Ban
None.
Alert: Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of rollover of these intraday positions.
Put-Call Ratio
- Nifty PCR at 1.18 versus 1.17.
- Nifty Bank PCR at 0.89 versus 0.86.
China, India compete for bourses as regional rivalry expands.https://t.co/QzfjATeyDZ pic.twitter.com/3kGuvGzDgF
Stocks Seeing High Open Interest Change
Fund Flows
Brokerage Radar
Deutsche Bank on Siemens
- Maintained ‘Sell' with price target of Rs 1,030.
- Mobility business separated just before potential uptick.
- It was a growing division with good prospects given Railways and Metro capex.
- Valuations look steep; Expect 26 percent compounded growth rate in net profit over the financial years through March 2020.
Goldman Sachs on Avenue Supermarts
- Maintained ‘Buy'; raised price target to Rs 1,672 from Rs 1,611.
- Expect Avenue to open 24,28 and 30 stores over the next three financial year.
- Lower SSSG estimates to 11.6 percent from 12.3 percent for the financial years between April 2019-March 2021.
- Higher number of stores will lead to some cannibalization.
Edelweiss on Prataap Snacks
- Increasing presence in South and west India and launch of new products to boost revenue.
- Planning to launch 5-6 products over the next three years in sweet snack.
- Sweet snack – relatively untapped and higher margin segment.
- Streamlining procurement process to protect raw material from market volatility.
- Targeting revenue to compound at 18‐20 percent over the next three years.
- Strategic location of plants, outsourcing bolster distribution network.
- Product mix to improve return on equity.
Jefferies on Federal Bank
- Maintained ‘Buy' with price target of Rs 145.
- Acquisition augurs well with strategy of building up corporate & institutional banking team.
- Bank is significantly capitalized and can easily pay for this acquisition.
- Primary synergies lie in broadening product offerings to corporate & SME clients.
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