All You Need To Know Going Into Trade On July 4

Asian stocks saw modest gains Thursday after their U.S. counterparts rose to all-time highs in thin trading ahead of a holiday.

Shares in Japan, Australia and South Korea rose after the S&P 500 climbed for a fifth day. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.11 percent to 11,961 as of 7 a.m.

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BQ Live

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

U.S. Market Update

Major U.S. indices rose to all-time highs in thin trading ahead of a holiday and the rally in global bonds extended as investors weighed the prospect of more dovish appointees to two of the world's major central banks.

#BQMarketWrap | U.S. stocks rise to records, Treasuries rally.

Read: https://t.co/tvBtCiioqE pic.twitter.com/M8M26d1mk9

Asian Cues

• Topix Index rose 0.6 percent.
• S&P/ASX 200 Index rose 0.3 percent.
• Kospi Index rose 0.2 percent
• S&P 500 futures were little changed.

Commodity Cues

• Brent crude fell 0.06 percent to $63.78 a barrel.
• West Texas Intermediate crude gained 0.2 percent to $57.48 a barrel.
• Gold was little changed at $1,419.89 an ounce.

London Metal Exchange

• Copper halted a two-day fall, closed 0.53 percent higher.
• Tin ended 3.45 percent higher.
• Zinc ended 1.2 percent lower.
• Aluminium halted a two-day fall, closed 0.45 percent higher.
• Nickel halted a three-day fall, ended 2.11 percent higher.
• Lead ended loser for the fourth consecutive trading session, closed 0.9 percent lower.

Key Events/Data To Watch

• U.S. markets equity markets close Thursday for the Independence Day holiday.
• Noon: India's Economic Survey
• 1:45 p.m.: Chief Economic Adviser Krishnamurthy Subramanian will address at a press conference after the Economic Survey 2018-19 is tabled in both the houses of Parliament

Indian ADRs

Stocks To Watch

• Vedanta awarded 10 exploration blocks in India at a total bid cost $245 million.
• Mcleod Russel ICRA downgraded credit rating to default for borrowings worth Rs 1,031.09 crore. Long term rating revised to ‘ICRA D' from ‘ICRA B-'. Short term rating revised to ‘ICRA D' from ‘ICRA A4'.Ratings continue to remain on ‘Issuer Not Co-operating Category'.
• Uniply Industries: Markab made an open offer of 4.95 crore shares, or 26 percent of the voting share capital at Rs 82 per share, aggregating to Rs 405.62 crores, as reported in the exchanges. The offer price is at a premium of 29 percent from the current market prices. Markab signed a deal to acquire 20.71 percent in the company from the promoters and will also acquire warrants which when converted will constitute 8.5 percent stake in the company.
• Cox & Kings defaulted in the payment of interest on NCDs worth Rs 7.2 crore which were due on June 30. Principal amount of NCDs stood Rs 300 crore. Company has already defaulted twice on June 27 and July 1 with a cumulative default of Rs 200 crore on payment of commercial papers.
• Bharti Airtel: NCLT approved the transfer of company's optical fibre cable business to Telesonic Networks.
• Mindtree: Nalanda India Fund reduced stake from 10.6 percent to 1.71 percent in the company. The shares were tendered in the open offer.
• ONGC clarified on the news of Cairn India stopping paying royalty on Rajasthan's block stating that claims and counterclaims were currently under arbitration. The matter is sub-judice and the aforesaid news has no material impact on the company.
• Steel Strips Wheels June total wheel rims sales were down 10 percent at 11.28 lakh units versus 12.66 lakh units. Company stated that June month had a shutdown coupled with major inventory reduction exercise going on at all car manufacturer's end and expect this to continue in July and come to normal levels of inventory by July to normalize production.
• Indian Oil Corporation hired a Panama-flagged VLCC Bright Pioneer on long-term time charter for five-seven years for importing crude oil, company's spokesman stated in an emailed reply to questions from Bloomberg News.

New Listing

• IndiaMART InterMESH to make its stock market debut. The company's IPO was subscribed 36.2 times.

Earnings To Watch

• GM Breweries

Bulk Deals

• Eros International Media: Missouri Local Government Employees Retirement System sold 5.67 lakh shares or 0.59 percent equity at Rs 18.64 each.

Pledge Share Details

• Tourism Finance Corporation of India promoter Redkite Capital created pledge of 66.32 lakh shares from March 6-June 27.
• Max Financial Services promoter group Max Ventures Investment created pledge of 29.1 lakh shares and released pledge of 29 lakh shares from June 27-29.
• Apollo Hospital Enterprises promoter group PCR Investments created pledge of 12.15 lakh shares on June 28.
• Arshiya promoter and director Ajay Mittal invoked pledge of 90,000 shares on June 27.

Trading Tweaks

• Aarti Industries record date for demerger.
• Bharat Financial Inclusion record date for amalgamation.
• Apcotex Industries ex-date for share split from Rs 5 to Rs 2.
• Star Cement, Sasken Technologies, Welspun Corp ex-date for share buyback.
• MT Educare, Sicagen India to move into short term ASM Framework.
• Hotel Leela Venture, Tanla Solutions to move out of short term ASM Framework.
• MT Educare price band revised to 10 percent.

Who's Meeting Whom

• Torrent Power to meet HDFC Life Insurance, Axis MF and Axis Capital on July 4.
• Mahindra & Mahindra to meet UBS Asset Management on July 4.
• Titagarh Wagons to meet SBI MF, Reliance MF and other investors on July 4.
• Trent to meet Dalal & Broacha Stock Broking on July 4.

Insider Trading

• Mindtree promoter L&T acquired 5.15 crore shares on July 2.

Money Market Update

Bonds traders will await Friday's budget amid expectations that the government may widen the fiscal deficit by giving out tax handouts to the middle-class.

DBS Bank is expecting the interim fiscal deficit target of 3.4 percent of GDP to be maintained but says there is a possibility of a 20-30 basis points slippage, given the shortfall in GST collections.

The 10-year bond yield fell one basis point to 6.83 percent on Wednesday and markets are likely to be tolerant towards a slight easing in fiscal levers. The government will table the economic survey in parliament at noon.

In the rupee market, implied opening from forwards suggests spot may start trading around 68.7425. It ended at 68.8963 on Wednesday, having touched 68.7863 intra-day, the highest since April 4 with foreign fund inflows underpinning the local currency.

F&O Cues

July Futures

• Nifty futures closed at 11,949, premium unchanged at 32 points.
• Nifty futures open interest down 1 percent, sheds 1.1 lakh shares in open interest.
• Bank Nifty futures closed at 31,495.9, premium of 113 points versus 120.6 points.
• Bank Nifty futures across series OI up 1 percent, adds 9,800 shares in open interest.

Options

• Nifty PCR at 1.39 versus 1.46 (across all series).

Nifty Weekly Expiry July 4

• Max open interest on call side at 12,000 (35.5 lakh shares).
• Max open interest on put side at 11,800 (24.5 lakh shares).
• Open interest addition seen in 12,000C (+10.6 lakh shares), 11,900P (+3.8 lakh shares).
• Open interest shedding seen in 11,750P (-2.4 lakh shares), 11,850C (-1.9 lakh shares).

Nifty Monthly Expiry July 25

• Max open interest on call side at 12,000 (15.3 lakh shares).
• Max open interest on put side at 11,500 (16.8 lakh shares).

Stocks In Ban

In Ban:

• DHFL
• Reliance Capital

New In Ban:

• Reliance Capital

Brokerage Radar

CLSA on Axis Bank

• Maintained ‘Buy'; hiked price target to Rs 1,000 from Rs 890.
• Risk profile at its trough; weaker CASA needs a push from riskier retail loans.
• Comments From CEO: Management transition is complete, need to lift provisions on stressed loans and will unify Axis' various verticals.

BofAML on Dr. Reddy's

• Maintained ‘Buy' with a price target of Rs 3,009.
• Announces launch of gHemabate which has annual sales of $55 million under CGT.
• Expect product to add $15 million and contribute to overall U.S. growth of 12 percent.
• Positive on recent launches and see gNuvaRing launch in second half as strong catalyst.

Morgan Stanley on Titan

• Downgraded to ‘Equal-weight' from ‘Overweight'; maintained price target at Rs 1,300.
• Downgraded as target price achieved and now reluctant to push multiples beyond current levels.
• Titan remains as one of our favourite long-term play.
• See no downside to financials; FY20 estimates 4 percent ahead of consensus.
• Recommend shifting to Jubilant FoodWorks; Maintained ‘Overweight' with a price target of Rs 1,525.

Citi on India Grid Trust

• Maintained ‘Buy'; cut price target to Rs 93 from Rs 102.
• Stable yields with inorganic growth potential.
• Existing portfolio has achieved high availability so far.
• Dividend target of Rs 12 will be contingent on successful debt refinancing.

Nomura on Cummins India

• Downgraded to ‘Reduce' from ‘Neutral'; cut price target to Rs 700 from Rs 765.
• Margin and pricing headwinds to persist.
• The current financial year to be weak year as civil companies are guiding lower equipment capex.
• Exports likely to remain weak into 2020-21 leading to weak Ebitda margins.
• Current prices building in 23 percent RoE and 16 percent decadal EPS CAGR, which is aggressive.

Jefferies on Whirlpool

• Maintained ‘Hold' with a price target of Rs 1,560.
• Strong summers could deliver a good June quarter.
• Remain cautious on rising competition, demand softness and volatility in commodities and rupee.
• Positives—strong positioning, business levers and pristine balance sheet— seem to be priced in.

Jefferies on Shriram Transport

• Maintained ‘Buy'; hiked price target to Rs 1,250 from Rs 1,200.
• Loan growth outlook has moderated amid weak CV trends and tighter liquidity.
• NIM pressure may ease as mix of new loans at higher yields rise.
• With collections still steady, asset quality should be broadly stable.

Kotak on Jubilant FoodWorks

• Maintained ‘Buy' with a price target of Rs 1,410.
• Hong's Kitchen product, service and price-value equation compelling.
• Revenue run-rate— tracking well even though a tad short of expectations.
• Hong's can potentially add about Rs 250 per share to fair value of Jubilant.
• Expect company to fine-tune and standardise HK's format, product and operations in three-to-six months.

Nomura on Torrent Pharma

• Maintained ‘Buy'; cut price target to Rs 1,907 from Rs 1,995.
• Cut price target due to forex, slower growth in the U.S., higher depreciation and tax rates.
• U.S. disruptions impact earnings.
• Domestic business remains the key value driver.

Nomura on Maruti Suzuki

• Maintained ‘Neutral'; cut price target to Rs 6,717 from Rs 7,171.
• Factoring in weaker industry demand and rising regulatory costs.
• There is a risk of volume loss in some segments due to lack of diesel options.
• Unless there is GST cut or a strong economic recovery, demand may have further downside risks.

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