Asian stocks traded mixed Tuesday as investor focus turned to the U.S.-China trade arena, while Treasury yields pared some of Monday's gains.
Equities were little changed in Japan and South Korea, and climbed in Australia. U.S. futures were flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.1 percent to 11,954.50 as of 6:55 a.m.
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U.S. Market Check
U.S. stocks climbed after President Donald Trump suspended plans for tariffs on Mexico. Sovereign bonds fell, along with gold and the yen, as demand for havens ebbed.
#BQMarketWrap | U.S. stocks advance, peso surges on Mexico trade relief.
Read: https://t.co/d9FkKvAIXV pic.twitter.com/IspsjPlcGRAsian Cues
- Japan's Topix index dipped 0.1 percent.
- Australia's S&P/ASX 200 Index rose 0.4 percent.
- South Korea's Kospi index was little changed.
- Hong Kong's Hang Seng Index futures added 0.3 percent.
- S&P 500 futures slipped 0.1 percent.
Commodity Cues
- Brent crude rose 0.14 percent to $62.38 per barrel.
- West Texas Intermediate crude rose 0.1 percent to $53.31 a barrel after sliding 1.4 percent Monday.
- Gold was little changed at $1,329.30 an ounce after tumbling 1 percent Monday.
London Metal Exchange
- Copper ended 1.3 percent lower.
- Zinc ended lower for the second day, down 0.32 percent.
- Aluminium ended 0.62 percent higher.
- Nickel halted its longest losing streak in over six months, closed 0.25 percent higher.
- Lead resumed gains after a one-day blip, closed 3.1 percent higher.
- Tin ended 0.08 percent higher.
Indian ADRs
Stocks To Watch
- Sterlite Technologies: Vedanta based promoter Twin Star Overseas released entire pledge of 20.74 crore shares (52.01 percent) on June 10. Company said that the pledge was released as per terms of facility agreement with lenders. Pledge was a collateral for loan taken by Volcano Investment Cyprus.
- Indiabulls Housing Finance: Refuted the allegation of siphoning Rs 98,000-crore, terming it as “bizarre” and made by a “racket of blackmailers”. (More details here)
- Dewan Housing Finance: Completed sale of entire stake (9.15 percent) in Aadhaar Housing Finance to Blackstone's arm.
- Bharti Airtel will pay the Tanzanian government 60 billion Shillings ($26.2 million) over a period of five years to settle an ownership dispute. The company will pay to the government 1 billion Shillings every month for sixty months starting April, Chairman Sunil Mittal said at a briefing in Tanzania's Dar es Salaam. The company will also pay the government a special divided at end of this year, Mittal said without mentioning the amount.
- Reliance Industries: Plans to shut down one of crude distillation units and coker unit in Jamnagar for routine maintenance and inspection activities for three-to-four weeks from June 20. Other crude distillation and secondary processing units are expected to operate normally during this period.
- J&K Bank said that the state government has ordered probe after getting complaints.
- Petronet LNG: Facilities related to expansion of Dahej LNG Terminal from 15 to 17.5 MMTPA has been commissioned and under stabilisation, with additional gas send-out already commencing.
- Yes Bank: Ajai Kumar resigned from the post of Non-Executive Director with effect from June 9 due to personal reasons.
- Parag Milk Foods launched premium milk brand in Singapore. Milk to be sold under brand name of Pride of Cows.
- Fortis Healthcare: Yes Bank said that it has sold 1.51 crore shares (2 percent) in various tranches since December 2018. Thereby reducing stake by 2 percent from 8.41 percent to 6.41 percent, as per exchanges.
- Eveready Industries: India Ratings and Research has downgraded company's pong term credit rating to IND BBB from IND A+ and maintained rating watch to negative. Reason for downgrade is due to increased leverage and weakened liquidity.
- IL&FS Engineering Services entered into a settlement agreement with NHAI against Arbitration Award. Company receives claim of Rs 150.15 crore.
- IDBI Bank entered into a Standalone Health Insurance tie-up with Max Bupa with effect from June 1.
- Muthoot Capital Services completed assignment of Rs 84.95 crore on June 7. The company said that it has raised Rs 196.9 crore through securitisation with this transaction in the current financial year.
- Wipro launched digital solutions for global airlines for crew management.
- India Cements: Aditya Birla Sun Life MF sold 67.66 lakh shares on June 6, reducing its stake from 7.31 percent to 5.11 percent.
- SH Kelkar fixed June 20 as record date for share buyback.
- Tata Sponge Iron: Board to meet on June 13 to consider the terms of rights issue.
- Yes Bank and Fortis Healthcare: Yes Bank sold 1.51 crore shares or 2 percent equity in Fortis Healthcare on June 7.
- Lupin: Sunil Makharia, president (finance), has been appointed as the interim CFO. The board is in the process of selecting the next Chief Financial Officer.
- Talwalkar Better Value Fitness: Company-backed startup Sarva Yoga raised over $4 million from global investors at a valuation of $20 million.
- IndusInd Bank and Bharat Financial: Received NCLT approval for merger.
Bulk Deals
Vaibhav Global
- Motilal Oswal MF acquired 16.6 lakh shares or 5.09 percent equity at Rs 770 each.
- Promoters Nirmal Kumar Bardiya, Brett Plastics, Deepti Agrawal and Rahim Ullah sold 16.6 lakh shares or 5.09 percent equity at Rs 770 each.
Pledge Share Details
- Adani Enterprises promoter Adani Tradeline revoked pledge of 51.5 lakh shares on June 6
- Adani Ports & SEZ promoter Adani Tradeline revoked pledge of 19 lakh shares on June 6
- Max Financial Services promoter group Max Ventures Investment Holdings revoked pledge of 1.5 lakh shares on June 4
- Zee Media Corporation promoter 25FPS Media invoked pledge of 1.63croreshares from April 8-23
(As reported on June 10)
Trading Tweaks
- Savita Oil Technologies ex-date for share buyback
- Syngene International ex-date for bonus issue 1:1
- Mcleod Russel to move into ASM Framework
- Uniply Industries Eros International Media IL&FS Investment Managers to move into short term ASM Framework
- Navkar Corporation, Bajaj Healthcare Roto Pumps to move out of short term ASM Framework
- Kridhan Infra price band revised to 5 percent
Who's Meeting Whom
- Polycab to meet Chrys Capital and Spark Capital from June 11-12
- Voltas to meet BlackRock on June 14
- Mahindra & Mahindra to meet Jet Age Securities on June 11
- Shriram City Union Finance to meet Kotak Securities and Spark Capital on June 11
- Astral Poly Technik to meet Wasatch Advisors, Newport Asia and other investors from June 11-14
Insider Trading
- Zee Media Corporation promoter 25FPx Media sold 16.1 lakh shares on May 22
- Chola Mandalam Financial Holding promoter group MV Seetha Subbiah sold 59,000 shares from May 24-28
- Usha Martin promoter Usha Martin Ventures sold 1.64 lakh shares and promoter Shreya Jhawar acquired 3 lakh shares on June 6
- Mukand promoter group acquired 61,000 shares from June 4-6
- Quess Corp promoter and director Ajit Isaac acquired 25,000 shares on June 7
(As reported on June 10)
Money Market Update
The Indian rupee is set to gain as crude prices ease and China unexpectedly set the yuan's daily reference rate stronger than 6.9 to a dollar, in a move that is seen as stemming further weakness. The implied opening from forwards suggest that the rupee may start trading at 69.50 per dollar. Inflows from global funds into Indian assets are also likely to underpin the rupee, traders said.
In the bond market, there might be some signs of stability after Monday's sell-off. The yield on the benchmark 2029 bonds rose 10 basis points to end at 7.08 percent on Monday after hitting 7.09 percent intraday, the highest since May 30. Benchmark yields have climbed 14 basis points in two trading sessions, erasing nine basis points of rally seen on June 6, the day when the RBI cut rates and changed its stance to accommodation.
F&O Cues
June Futures
- Nifty futures closed at 11,933.8, premium of 11 points versus 30 points
- Bank Nifty futures closed at 31,044, premium of 10.7 points versus 48 points
Options
- Nifty PCR at 1.36 versus 1.32 (across all series)
Nifty Weekly Expiry June 13
- Max OI on call side at 12,000 (22 lakh shares)
- Max OI on put side at 11,800 (14.2 lakh shares)
- OI addition seen at 11,900P (+5.9 lakh shares), 11,850P (+3 lakh shares)
- OI shedding seen at 11,800C (-2.2 lakh shares), 11,850C (2 lakh shares)
Nifty Monthly Expiry June 27
- Max OI on call side at 12,500 (27 lakh shares)
- Max OI on put side at 11,500 (28.9 lakh shares)
- Max OI addition seen at 11,500 (+1.1 lakh shares), 11,800P (+1.1 lakh shares)
Stocks In F&O Ban
- In ban: DHFL, IDBI Bank, PC Jeweller, Reliance Capital
- New in ban: Reliance Capital
Brokerage Radar
Nomura on HDFC
- Downgraded to ‘Neutral' from ‘Buy'; hiked price target to Rs 2,300 from Rs 2,000.
- Resilient business model to weather current liquidity crisis.
- Rate cycle becoming favourable as well; part of gain to fund higher liquidity levels.
- But valuations near fair value now.
Goldman Sachs on Sun Pharma
- Downgraded to ‘Sell' from ‘Neutral'; cut price target to Rs 355 from Rs 437.
- Key businesses facing competitive threats during transitionary phase.
- Soft start in specialty clouds earnings trajectory.
- Better entry points could be in store for investors.
HSBC on Indian Metals
- Commodity and metal stocks have been severely hurt by ongoing trade tensions.
- More is at stake as current economic and trade environment is weaker.
- Further escalation likely to aggravate the situation.
- Resolution of tensions appears key catalyst for realisation of upside.
- Hindalco: Maintained ‘Buy'; cut price target to Rs 270 from Rs 300.
- Hindustan Zinc: Maintained ‘Hold'; cut price target to Rs 240 from Rs 250.
- Vedanta: Maintained ‘Hold'; cut price target to Rs 190 from Rs 205.
- NALCO: Maintained ‘Buy' with a price target of Rs 65.
Jefferies on Voltas
- Maintained ‘Buy' with a price target of Rs 700
- 2019-20 starts off on a good note.
- Believe Voltas missed some post-election upside given weak March quarter engineering margins.
- Recovery in the first quarter coupled with strong AC growth should drive further upside.
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