All You Need To Know Going Into Trade On July 3

Stocks in Japan, South Korea and Australia recouped some of yesterday's declines as investors continue to weigh the impact of potential global trade restrictions on economic growth. Chinese assets remain in focus following another battering for stocks.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, traded 0.3 percent higher at 10,686 as of 6:50 a.m.

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BQ Live

U.S. Market Check

• U.S. stocks reversed early losses to trade higher on light volume yesterday as investors looked past potentially rising global trade tensions to focus on tech strength.
• The yield on 10-year Treasuries was little changed at 2.87 percent.

#BQMarketWrap | U.S. stocks gain as investors shrug off trade concerns.https://t.co/T9VoL2J6pm pic.twitter.com/Sy1CCXRYEY

Europe Check

• European stocks fell, closing at the lowest level since early April, as investors continued to assess the potential global economic impact of trade tariffs taking effect this week and political turmoil flared in Germany.

• The euro declined 0.6 percent to $1.1619.
• The British pound fell 0.6 percent to $1.3129.
• Germany's 10-year yield was little changed at 0.304 percent.
• Britain's 10-year yield decreased two basis points to 1.255 percent.

Asian Cues

• Japan's Topix index rose 0.3 percent.
• Australia's S&P/ASX 200 Index added 0.1 percent.
• South Korea's Kospi advanced 0.6 percent.
• Futures on S&P 500 were flat.
• The MSCI Emerging Market Index fell 1 percent Monday.
• The Aussie traded at 73.39 U.S. cents.
• Australia's 10-year government bond yield was at about 2.60 percent.

Commodity Cues

• West Texas Intermediate crude fell 0.3 percent to $73.93 a barrel.
• Brent crude traded 0.4 percent higher at $77.57 per barrel.
• Gold dipped 0.9 percent to $1,241.05 an ounce.

Shanghai Exchange

• Steel traded lower for second day; down 0.6 percent.
• Aluminium traded lower for third day; down 0.6 percent.
• Zinc traded lower for third day; down 0.1 percent.
• Copper traded flat.
• Rubber traded lower for third day; down 0.5 percent.

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Indian ADRs

Stocks To Watch

• Hero MotoCorp June sales up 13 percent at 7.04 lakh units
• Fortis Healthcare: Last day for submission of binding bids for the hospitals business
• ONGC board gives nod to explore group restructuring options (PTI)
• ITC and Ballarpur Industries clarify that no negotiations have taken place for ITC acquiring BILT's Telengana unit
• Parag Milk Foods board approved acquiring patented product rights from Sweden-based organization
• Strides Shasun received U.S. FDA approval for Ibuprofusen tablets.
• Mahindra Lifespace Developers managing director Anita Arjundas resigned.
• Tata Power arm commissioned 100MW solar capacity in Andhra Pradesh.
• Syndicate Bank clarified credit facility given to DS Kulkarni was in compliance with RBI guidelines.
• NCC received four new orders worth Rs 2,061 crore for June.
• Rico Auto Industries shut loss making unit in Haryana.

Bulk Deals

• Fine Organics: Goldman Sachs India Fund Ltd acquired 2.79 lakh shares or 0.91 percent equity at Rs 815 each.
• Kwality: Promoter Sanjay Dhingra sold 13 lakh shares or 0.54 percent equity at Rs 22.07 each.
• DCM Shriram Industries: Promoter Lily Commercial Pvt Ltd acquired 1.06 lakh shares or 0.61 percent equity at Rs 132.29 each

ICRA

• Paris Washington India Master Fund acquired 3.3 lakh shares or 3.33 percent equity at Rs 3290.99 each.
• IIFL Management Services sold 3.3 lakh shares or 3.33 percent equity at Rs 3291 each.

Who's Meeting Whom

• Shalby to meet Goldman Sachs Asset Management and other investors from July 3-4.
• Magma Fincorp to meet Vallum Capital and other investors on July 3.
• Philps Carbon Black to meet investors from July 3-6.
• Cipla to meet Reliance Mutual Fund on July 3.

Insider Trades

• Jain Irrigation Systems promoter acquired 4 lakh shares from June 28-29.
• Ruchi Soya Industries promoters sold 2 lakh shares on June 29.
• Shakti Pumps promoter group acquired 10,000 shares on June 29.

Trading Tweaks

• Electrosteel Steels Limited shifted to B group.
• Safari Industries, Sandur Manganese and Waterbase last trading day under X group.

Rupee

• Rupee closed at 68.80/$ on Monday from 68.47/$ on Friday.

F&O Cues

• Nifty July Futures closed trading at 10,658.2, premium of 0.9 points versus discount of 19 points.
• July series: Nifty open interest unchanged and Bank Nifty open interest up 5 percent.
• India VIX ended at 13.3, up 3 percent.
• Max open interest for July series at 11,000 Call (open interest at 36.8 lakh, up 11 percent).
• Max open interest for July series shifts to 10,600 Put (open interest at 47.5 lakh, up 4 percent).

Put-Call Ratio

• Nifty PCR at 1.45 versus 1.46
• Nifty Bank PCR at 0.75 versus 0.83

Fund Flows

Brokerage Radar

Investec on Air Conditioner Makers

• Unfavourable weather impacts demand.
• Realisation improvement to partly offset volume declines.
• Inverter proportion continues to rise; Voltas adapts well.
• Long term story remains intact.
• Amber largely immune to market share shifts.
• Maintain ‘Buy' rating on Voltas, Blue Star, Havells, Amber.

Centrum on Two-Wheelers

• Two-wheeler sector opportune investment plays backed by potential catalysts.
• Positive: favourable macros, good monsoons, rising income level and government focus on rural economy.
• Three-wheeler space in sweet spot with new permits and recovering exports.
• Honda is strongest in two wheelers, but Hero is well positioned.
• Bajaj Auto fair play on premiumisation, rising exports and strong three wheeler prospects.
• TVS Motors rich mix of premium bikes, scooters, three wheelers and exports.
• Hero MotoCorp: Initiated ‘Buy' with a price target of Rs 4,245.
• Bajaj Auto: Initiated ‘Buy' with a price target of Rs 3,413.
• TVS Motor: Initiated ‘Hold' with a price target of Rs 559.

KRChoksey on Suzlon

• Maintained ‘Buy' with a price target of Rs 16; implying a potential upside of 115 percent from the last regular trade.
• Governments aims to add 60GW wind energy by March 2022 to benefit players like Suzlon.
• Offshore wind market provides enough potential for the players like Suzlon.
• Stake Divestment in O&M to curb leverage to certain extent.
• Suzlon being a technology efficient player to benefit from transformation such as Hybrid projects.

Emkay on United Breweries

• Upgraded to ‘Buy' from ‘Accumulate'; raised price target to Rs 1,400 from Rs 1,350
• Channel checks indicate strong volume trends for Previous quarter.
• UBL extending market leadership in premium segment.
• Benign competitive intensity, cost savings, higher realisations to drive margin expansion.
• Recent correction provides an attractive entry opportunity.
• United Breweries is top pick in consumption space.

Citi on Power Grid Corp

• Maintained ‘Buy'; cut price target to Rs 232 from 242.
• Drivers in place to drive transmission capex beyond March 2021.
• Cut earnings per share estimates to factor delay in pass through of wage hike.
• Management believes it is unlikely that assured RoE will be cut.

Citi on BHEL

• Maintained ‘Neutral'; cut price target to Rs 75 from Rs 90.
• Rising commodities could put pressure on raw material cost.
• Management expects employee cost to rise by Rs 200-500 crore post final wage negotiation.
• Company sees bid pipeline of 11.3GW of Central and State Government coal projects in the current financial year.
• Cut earnings per share estimates to factor in lower operating margins.

Morgan Stanley on Bajaj Auto

• Maintained ‘Overweight' with a price target of Rs 3,785.
• Strong June domestic two-wheeler sales precursor to volume beat in 2018-19.
• Rupee weakness helping exports.
• Exports upswing to fund domestic market share fight.
• Benign valuation and likely volume surprise support rating.

IDFC Securities on Sterlite Technologies

• Reinitiated ‘Outperformer' with a price target of Rs 370.
• Data boom and higher mobile traffic to boost fibre demand.
• Order book provides earnings visibility.
• Expect revenue, Ebitda and net profit to compound at 30 percent, 27 percent and 32 percent respectively over the fiscal 2018-2020.
• Strong competitive advantages, growth visibility and healthy return ratios warrant premium valuations.

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