All You Need To Know Going Into Trade On July 19

Asian stocks opened mixed as investors weighed bank earnings that pushed U.S. equities higher and Federal Reserve Chairman Jerome Powell's comments that did little to alter expectations for another interest rate increase in September.

Equity indexes swung between gains and losses in Japan, while they were barely higher in Australia and South Korea. Futures pointed to a stronger start for Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, traded 0.3 percent higher at 11,011 as of 6:50 a.m.

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BQ Live

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

U.S. Market Check

• Equities rose, led by gains in financials and industrial companies, after Morgan Stanley earnings beat forecasts, helping to offset a slide in tech stalwarts such as Apple and Microsoft.
• The yield on 10-year Treasuries rose about one basis point to 2.88 percent.

#BQMarketWrap | U.S. stocks rose on profit optimism led by gains in financials and industrial companies.https://t.co/JJYfIVu1aw pic.twitter.com/iWh63Wa9RD

Europe Check

• European stocks gained for a second day after the Federal Reserve reassured investors it will tighten monetary policy gradually even amid solid growth in the world's largest economy.

• The euro slipped 0.2 percent to $1.1644.
• The British pound dropped 0.3 percent to $1.3080.
• Italian 10-year yields rose four basis points to 2.51 percent.
• Germany's 10-year yield fell abut one basis point to 0.34 percent.

Asian Cues

• Japan's Topix index was little changed.
• Australia's S&P/ASX 200 Index rose 0.1 percent.
• South Korea's Kospi index rose 0.1 percent.
• Futures on Hong Kong's Hang Seng advanced 0.4 percent.
• Futures on the S&P 500 Index were little changed.

Commodity Cues

• West Texas Intermediate crude rose 0.4 percent to $69 a barrel.
• Brent crude traded 0.1 perrcent higher at $72.98 per barrel.
• Gold was little changed at $1,228.38 an ounce.

Shanghai Exchange

• Steel ended higher for second day; up 1.2 percent
• Aluminium traded higher; up 0.4 percent.
• Zinc traded higher for second day; up 4.8 percent.
• Copper snapped two-day losing streak; up 0.6 percent.
• Rubber traded higher for third day; up 0.1 percent.

Indian ADRs

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Stocks To Watch

• DFM Foods to consider for stock split on August 6.
• Poddar Housing and Development acquires 5,800 square metres land in Pune, with a saleable area of 1.4 lakh square feet.
• Indian Overseas Bank receives communication for infusion of Rs 2,157 crore by the government.
• SH Kelkar expects revenue growth this quarter to be moderate.
• ONGC, Oil Indian in focus as cabinet lowers cess on pre NELP block.
• JSW Steel to consider raising funds through debentures on July 25.
• Coal India says dispatched 122.2 mt coal to power sector in first quarter.
• Reliance Communication says confident of resolving debt with lenders.

Nifty Earnings To Watch

• Bajaj Finance
• Bajaj Finserv
• Kotak Mahindra Bank

Other Earnings To Watch

• ABB India
• DB Corp
• Hatsun Agro Products
• RBL Bank
• Sterlite Technologies

Earnings Reaction To Watch

Mindtree (Q1, QoQ)

• Revenue up 12 percent at Rs 1,639.5 crore.
• Net profit down 13.2 percent at Rs 158.2 crore.
• EBIT down 1.7 percent at Rs 188.2 crore.
• Margin at 11.5 percent versus 13.1 percent.

Mahindra CIE Automotive (Q2, YoY)

• Revenue up 44.6 percent at Rs 650 crore.
• Net profit at Rs 43.9 crore versus Rs 17.6 crore.
• Ebitda at Rs 81.6 crore versus Rs 42.6 crore.
• Margin at 12.6 percent versus 9.5 percent.

JK Tyres & Industries (Q1, YoY)

• Revenue up 35 percent at Rs 2,439.5 crore.
• Net profit at Rs 64.1 crore versus net loss at Rs 117.2 crore.
• Ebitda at Rs 325.5 crore versus Ebitda loss at Rs 1 crore.
• Margin at 13.3 percent versus -0.1 percent.

Reliance Communications (Q1, QoQ)

• Revenue up 6 percent at Rs 1,006 crore.
• Net loss at Rs 342 crore versus net loss at Rs 19,776 crore.
• Ebit loss at Rs 114 crore versus Ebit loss at Rs 74 crore.

Artson Engineering (Q1, YoY)

• Revenue up 24 percent at Rs 36.2 crore.
• Net loss at Rs 2.9 crore versus net profit at Rs 0.5 crore.
• Ebitda loss at Rs 1.4 crore versus Ebitda of Rs 1.9 crore

Offerings

• TCNS Clothing IPO gets 10 percent demand for shares offered on first day sale, offer close on July 20.

Who's Meeting Whom

• Shriram Transport Finance to meet Seiga Asset Management and other investors from July 19-20.

Insider Trades

• Bharat Forge promoter Sundaram Trading & Investment Pvt Ltd acquired 64,000 shares on July 17.
• Plastiblends India promoter Jyoti Kabra acquired 10,517 shares from July 12–16.
• Waterbase promoter KCT Management Services Pvt Ltd acquired 79,182 shares from July 13–16.

Rupee

• Rupee closed at 68.62/$ on Wednesday from 68.46/$ on Tuesday.

F&O Cues

• Nifty July futures closed trading at 10,978.6 discount of 1.8 points versus premium of 15.7 points.
• July series: Nifty open interest down 2 percent; Bank Nifty open interest down 2.4 percent.
• India VIX ended at 13.6, up 6.6 percent.
• Max open interest for July series at 11,100 Call (open interest at 35.9 lakh, up 16 percent)
• Max open interest for July series at 10,800 Put (open interest at 43.7 lakh, down 6 percent)

F&O Ban

• In ban: Adani Enterprises, Adani Power
• Out of ban: Jet Airways

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

Put Call Ratio

• Nifty PCR at 1.65 versus 1.68
• Nifty Bank PCR at 0.85 versus 1.15

Fund Flows

Brokerage Radar

Credit Suisse on Mindtree

• Maintained ‘Neutral'; raised price target to Rs 925 from Rs 875.
• Extremely strong revenue growth in June quarter.
• Growth has been well-rounded across segments.
• Margins, however, did not surprise positively.
• Valuations rich with high client concentration.

Credit Suisse on NIIT Tech

• Maintained ‘Neutral'; raised price target to Rs 1,150 from Rs 1,100.
• June quarter results reflect positive momentum.
• Financial and Insurance services growth strong driven by large U.S. clients.
• Retain Neutral rating due to high valuations.

Brokerages On Bandhan Bank

Goldman Sachs

• Maintained ‘Buy'; raised price target to Rs 710 from Rs 689.
• Strong quarter driven by loan growth, better lending spreads and healthy asset quality.
• Expect average operating profitability levels of 6.5 percent through the financial years till March 2021.
• Expect better fee income and improving productivity levels.
• Expect premium valuations to sustain given its superior profitability.

Macquarie

• Maintained ‘Outperform' with a price target of Rs 560.
• June quarter beats estimates on strong growth.
• Bank capitalising on its reach & lowest-in-industry funding cost.
• Lower deposit growth tactical, no liquidity challenges.

Brokerages On Ultratech Cement

Macquarie

• Maintained ‘Outperform'; cut price target to Rs 4,800 from Rs 4,950.
• June quarter's operating income was in line with estimate.
• Benefits of operational leverage from strong volume offset cost pressure.
• Cost headwinds persists but are close to peak.
• Expect price hike post monsoon would be the key trigger.

JP Morgan

• Maintained ‘Neutral' with a price target of Rs 4,100.
• June quarter's operating income surpassed marginally, driven by higher other operating income.
• Volume growth driven on JPA ramp up; Like-to-like volume growth at 10 percent.
• Cost pressures remain high.
• Cement price recovery in second half holds the key.

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