All You Need To Know Going Into Trade On Jan. 23

Asian stocks extended the strong start to the year, heading for fresh all-time highs, as investors turn with optimism toward the earnings season after the U.S. government shutdown moved toward an end.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.3 percent to 10,999 as of 7 a.m.

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DayBreak

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

Global Cues

• U.S. equity gauges closed at records as the government shutdown appeared to be on the brink of ending and investors turned their attention toward earnings.
• Investors are awaiting about 80 earnings reports this week from companies in the benchmark index.
• The dollar traded near lows for the year and 10-year Treasury yields held close to 2.66 percent.

#BQMarketsNow | U.S. stocks gain as Senate votes to end shutdown.https://t.co/FDIRxBhpyN pic.twitter.com/hD86qtP6X4

Europe Check

• European stocks rose for a third day as gains in telecom shares offset losses in travel and leisure companies.

Asian Cues

• Japan's Topix index rose 0.6 percent. Australia's S&P/ASX 200 Index gained 0.7 percent and South Korea's Kospi index advanced 0.5 percent.
• Futures on Hong Kong's Hang Seng Index added 0.4 percent.
• Futures on the S&P 500 Index were little changed.
• The MSCI All-Country World Index climbed 0.6 percent to the highest on record Monday. It's up 5.8 percent in 2018.
• The MSCI Emerging Market Index advanced 0.5 percent, its seventh consecutive advance.

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

• Earnings season is in full swing: Fanuc, Novartis, General Electric, Intel, LVMH Moet Hennessy Louis Vuitton, Starbucks and Hyundai Motor come later in the week.
• Barring any last minute changes in Washington, President Donald Trump will join world leaders and senior executives in Davos, Switzerland, for the annual World Economic Forum.
• Central banks: Bank of Japan monetary policy decision and briefing on Tuesday; European Central Bank rate decision on Jan. 25.
• U.K. Prime Minister Theresa May's Brexit bill is set to be taken up in the House of Lords.
• Prime Minister Narendra Modi to address at the Davos World Economic Forum, International Business Council and interact with CEOs.

Trump to move U.S. embassy to Jerusalem in 2019, Pence says.https://t.co/gt6OlXcLXi pic.twitter.com/U1RUyPHjMq

Commodity Cues

• West Texas Intermediate crude rose 0.4 percent to $63.82 a barrel.
• Brent ended higher at $69.03/barrel, up 0.6 percent.
• Gold was little changed at $1,333.51 an ounce.
• Sugar ended lower at 13.17 cents per pound; down 0.6 percent.

Shanghai Exchange

• Steel snaps five-day losing streak; down 0.6 percent.
• Aluminium trades higher; up 0.5 percent.
• Zinc trades lower; down 0.1 percent.
• Copper trades lower for second day; down 0.04 percent.
• Rubber snaps two-day losing streak; up 0.5 percent.

Hindustan Oil exploration bets on higher output to boost growth.https://t.co/dqLJ7MhAF3 pic.twitter.com/O5RuFm0uBm

Indian ADRs

Nifty Earnings To Watch

• Indiabulls Housing Finance

Other Earnings To Watch

• Alembic
• Can Fin Homes
• Crompton Greaves Consumer Electricals
• Edelweiss Financial Services
• Force Motors
• Indiabulls Real Estate
• L&T Technology Services
• NIIT
• PNB Housing Finance
• RBL Bank
• Symphony
• Syngene International
• United Spirits
• Wabco India

Earnings Reaction To Watch

Asian Paints Q3 (YoY)

• Revenue up 10.5 percent at Rs 4,260.5 crore.
• Net profit up 19 percent at Rs 555 crore.
• EBITDA up 18 percent at Rs 891.5 crore.
• Margin at 20.9 percent.

Rallis India Q3 (YoY)

• Revenue up 18.5 percent at Rs 390 crore.
• Net profit down 1 percent at Rs 25.1 crore.
• EBITDA down 14 percent at Rs 37 crore.
• Margins at 9.5 percent versus 13.1 percent.

Sasken Tech Q3 (QoQ)

• Revenue up 5.6 percent at Rs 132 crore.
• Net profit up 8.5 percent at Rs 20.4 crore.
• EBITD down 11.7 percent at Rs 15 crore.
• Margin at 11.4 percent versus 13.6 percent.

Tinplate Q3 (YoY)

• Revenue up 146 percent at Rs 547 crore.
• Net profit up 189 percent at Rs 13 crore.
• EBITDA up 89.5 percent at Rs 36 crore.
• Margins at 6.6 percent versus 8.6 percent.

Just Dial Q3 (QoQ)

• Revenue up 1 percent at Rs 197 crore.
• Net profit down 24 percent at Rs 28.6 crore.
• EBIT up 25 percent at Rs 38 crore.
• Margin at 19.3 percent versus 15.7 percent.

MPS Q3 (YoY)

• Revenue down 15 percent at Rs 68 crore.
• Net profit down 2 percent at Rs 17.6 crore.
• EBITDA down 5 percent at Rs 25.1 crore.
• Margin at 36.4 percent versus 32.8 percent.

Asian Paints' decorative paints business saw single digit volume growth for yet another quarter. #Q3WithBQ https://t.co/k7cV3EOThw

Stocks To Watch

• Indian Oil Corporation board to consider bonus issue on Jan. 30.
• Kalpataru Power gets multiple orders worth Rs 871 crore.
• Torrent Pharma to consider fund raising via bonds, share placement on Jan. 25.
• Om Metals reached an agreement with a Jaipur-based developer to withdraw claim on 56,000 square metre land.
• Bajaj Corp. introduced new Coco Jasmine hair oil.
• Swaraj Engines buyback to open on Jan. 31.
• HSIL commissions pipe manufacturing plant in Telangana.

What Rakesh Jhunjhunwala,
Dolly Khanna, Ashish Kacholia, Ramesh Damani and Radhakishan Damani bought and sold in Q3.https://t.co/8K7XYA6zUA pic.twitter.com/A4o6dN7GZ1

Bulk Deals

• Lux Industries: Kotak Mahindra AMC bought 1.68 lakh shares or 0.7 percent equity at Rs 1525.2 each.
• Indoco Remedies: Reliance Growth Fund bought 12.11 lakh shares or 1.3 percent equity at Rs 275 each.
• IRB Invit: Prusik Umbrella UCITS Fund PLC - Prusik Asian Equity Income Fund bought 28.25 lakh units at Rs 87.17 each.
• Videocon: Yes Bank sold 17.39 lakh shares or 0.6 percent equity at Rs 21.27 each.
• Religare Enterprises: IDBI Trusteeship services sold 22.55 lakh shares or 1.3 percent equity at Rs 50.26 each.

8K Miles

• DSP Blackrock MF bought 4.26 lakh shares or 1.4 percent equity at Rs 748 each.
• Promoter R S Ramani sold 6.82 lakh shares or 2.2 percent equity at an average of Rs 749.32 each.

MCX

• SBI MF bought 8.19 lakh shares or 1.6 percent equity at Rs 840.5 each.
• Baron International Growth Fund sold 11.3 lakh shares or 2.2 percent equity at Rs 840.5 each.

Corporate Action

• Excel Realty and Infra ex-date for 2:1 bonus.

NSE mulling options to stop futures trade moving to Singapore.https://t.co/xTE3dW77iA pic.twitter.com/v8OAZ9V0ee

Who's Meeting Whom?

• PC Jewellers to meet investors in road show in Taiwan, Hong Kong and Singapore from Jan. 22-26.
• MEP Infra to meet Kotak AMC, Principal PNB, SBI MF on Jan. 23.
• Weizmann Forex to meet funds in Singapore and Hong Kong on Jan. 23-25.
• Zee Learn to meet Alder Capital on Jan. 23.
• TNPL to meet Pabrai Investment on Jan. 24.

Insider Trades

• PTL Enterprises promoter bought 3.75 lakh shares of Apollo Tyres on Jan. 18-19.
• Lakshmi Overseas promoter sold 1.3 lakh shares on Jan. 18.
• Adani Transmission promoter revokes pledge of 9 lakh shares on Jan. 19.
• KCP promoter sold 26k shares on Jan. 17-18.
• Max Financial Services promoter revokes pledge of 27 lakh shares on Jan. 17.

Rupee

• Rupee closed at 63.87/$ on Monday from 63.85/$ on Friday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty January futures trading at 10,968, premium of 1.8 points versus discount of 6.2 points.
• January Series: Nifty open interest down 9 percent; Bank Nifty open interest down 3 percent.
• Across series: Nifty open interest up 2 percent; Bank Nifty open interest up 5 percent.
• India VIX ended at 15.3, up 10 percent.
• Rollover: Nifty at 20 percent, Bank Nifty at 23.5 percent.
• Max open interest for January series at 11,000 Call (open interest at 51.1 lakh, down 5 percent).
• Max open interest for January series at 10,500 Put (open interest at 70.6 lakh, down 5 percent).

The stock that's soared 8,000% in the past decade has hit a sweet spot, says Goldman Sachs.https://t.co/vz5UMxtFSi pic.twitter.com/VwrPxndcdw

F&O Ban

• In ban: Balrampur Chini, Dewan Housing, DLF, Fortis, HCC, HDIL, IFCI, JP Associates, Just Dial, Kaveri Seed.
• New in ban: Dewan Housing, JP Associates, Just Dial.
• Out of ban: Dish TV, GMR Infra, Jain Irrigation.

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

Put-Call Ratio

• Nifty PCR at 1.79 from 1.30.
• Nifty Bank PCR at 1.30 from 1.10.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Elara Capital on L&T Technology Services

• Initiated ‘Accumulate' with price target of Rs 1,170.
• Broad portfolio, deep expertise driving growth.
• Expect new client relationships to scale up gradually.
• Lower client concentration than domestic peers.
• L&T helping in domain expertise, client access.
• Expect revenue, operating income and net profit compounding at 17.4 percent, 25.2 percent and 22.5 percent respectively over the financial years through March 2020.
• Faster growth to lead to earnings upgrade.
• Bull case price target of Rs 1,560.

Credit Suisse on Havells India

• Maintained Outperform; raised price target to Rs 635 from Rs 600.
• December quarter was a strong broad-based quarter.
• Consumer durables and lighting drove growth.
• Switchgears saw modest pick-up; B2B initiatives seeing traction.
• Margins very strong; Cables have set new normal of profitability.
• Lloyd growth aided by some pre-buying before new energy norms.

Edelweiss on Havells India

• Maintained ‘Buy' with price target of Rs 640.
• Favorable base leads to in-line quarter; Growth profile intact.
• Impressive growth in lighting/consumer durable on low base.
• Havells well placed to benefit with demonetization and GST mostly behind.
• Positives: shift to organized, rising premiumisation and ramp up in Lloyds' profitability.

IDFC Securities on Asian Paints

• Maintained ‘Outperform'; cut price target to Rs 1,262.
• Volume miss; lower costs drive earnings growth.
• Volume growth of 6 percent for the quarter is disappointing.
• Cost management initiatives and better mix resulted in strong margin improvement.
• Expect uptick in volumes driven by favourable base and improving demand.
• Expect price hikes to mitigate input cost pressure.
• Market share loss over last three quarters is a concern.

Morgan Stanley on Dr. Reddy's

• Maintained ‘Overweight' with price target of Rs 3,133.
• Raised prices by 5 percent for Sernivo spray and Zembrace in January 2018.
• Small brands with gross sales of $20/25 million.
• Price hike to have small impact but shows confidence in the ramp-up ahead.
• March 2018 important month with three upcoming Target Action Dates.

Credit Suisse on Asian Paints

• Maintained ‘Underperform'; raised price target to Rs 1,100 from Rs 1,060.
• Volume growth significantly below expectations.
• Competitors continue to grow volumes faster.
• Management cautiously optimistic as December growth had been good.
• EBITDA growth driven by tightening fixed costs, lowering marketing spends and GST savings.
• Raw material costs firming up; Needs to take a price hike to stem gross margin decline.

"We, the powerful, need to get out of the way," for a more equal world, says @iamsrk at the #WEF2018 #CrystalAwards.#BQatWEF

Catch all updates from #Davos2018: https://t.co/BWM1niQsFd pic.twitter.com/ekfoza0zul

Brokerages On Axis Bank

JPMorgan

• Maintained ‘Overweight', raised price target to Rs 700 from Rs 650.
• Guidance of 225-260 basis points with normalised credit costs expected.
• See the next 2-3 quarters as challenging given the uncertainty over timing and quantum of back-book provisioning.
• At about 2 times price-to-book and a FY20 return on equity estimate of 19.5 percent, Axis Bank is our top value pick.

Morgan Stanley

• Maintained ‘Overweight'; price target Rs 770
• Impaired loans at Axis showed good trends after a weak December quarter.
• Expect asset quality and core pre-provision operating profit trends to be volatile over the next four quarters.
• Expect continued improvement in impaired loans over the next four quarters.
• This should drive strong stock performance over the next 12 months.

Credit Suisse

• Maintained ‘Neutral', raised price target to Rs 595 from Rs 525.
• Asset quality stabilises, operating profitability yet to improve.
• Expect credit costs to normalise from 2.7 percent in current fiscal to 1.2 percent in Fiscal 2020.

CLSA

• Maintained ‘Buy', raised price target to Rs 730 from Rs 650.
• Key positive in the result was improvement in asset quality.
• Expect earnings to normalise from the next fiscal.

.@AxisBank's CFO, @JairamSridharan breaks down the bank's performance this quarter. #Q3WithBQ https://t.co/CfjqzXaZl4

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