All You Need To Know Going Into Trade On June 20
Asian equity markets opened mixed, as a semblance of calm returned after U.S. and China trade tensions escalate.
Asian equity markets opened mixed, as a semblance of calm returned after a ratcheting up of trade tensions between the U.S. and China sparked a global sell-off on Tuesday.
Japan’s benchmarks fluctuated, while indexes advanced in Australia and South Korea. Futures on Hong Kong’s stock index were higher as the S&P 500 Index pared losses earlier, and futures on the U.S. benchmark climbed in Asia.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,702.50 as of 6:50 a.m.
Short on time? Well, then listen to this podcast for a quick summary of the article!
BQ Live
Here’s a quick look at all that could influence equities today.
U.S. Market Check
- U.S. stocks fell, though major indexes traded well off session lows as a flare up in trade tensions eased to a simmer. Treasuries rose with the dollar.
- The yield on 10-year Treasuries was steady at 2.89 percent.
#BQMarketWrap | U.S. stocks pare their losses as trade tensions simmer.https://t.co/Rm4mabv3zV pic.twitter.com/rT6cHn6No5
— BloombergQuint (@BloombergQuint) June 20, 2018
Europe Market Check
Europe stocks closed lower for the third day after the U.S. administration stepped up its trade rhetoric, pledging additional tariffs on Chinese goods.
- The euro decreased 0.3 percent to $1.1583, the weakest in three weeks.
- The British pound declined 0.5 percent to $1.3177, the weakest since November.
- Germany’s 10-year yield declined two basis points to 0.37 percent, its sixth straight decline.
- Britain’s 10-year yield decreased four basis points to 1.28 percent.
Asian Cues
- Japan’s Topix index fell 0.3 percent.
- Australia’s S&P/ASX 200 Index rose 0.6 percent.
- Kospi index added 0.7 percent.
- Futures on the Hang Seng index added 0.4 percent.
- The S&P 500 futures gained 0.1 percent.
- The yen traded little changed at 110.02 per dollar.
Commodity Cues
- Gold was steady at $1,273.88 an ounce, near the weakest in six months.
- West Texas Intermediate crude rose 0.5 percent to $65.37 a barrel.
- Brent crude traded 0.1 percent higher at $75.17 a barrel.
- Aluminium ended 1.5 percent lower at $2,187.25 per metric ton.
Indian ADRs
Stories You Might’ve Missed
- This holiday season wasn't so good for Indian airlines.
- Bulk of India’s stock market activity comes from just one city.
- The million dollar question: Who is the real boss at ICICI Bank?
- Central bankers shouldn't have to rescue democracy.
- Investor wants Wall Street to get serious about gender equality.
- Boutique silicon valley air service sued for dodging bills.
- Maybe buying that vintage Jaguar wasn't such a good idea.
Here are some key events coming up this week:
- Draghi, Reserve Bank of Australia Governor Philip Lowe, Bank of Japan Governor Haruhiko Kuroda, and Fed Chairman Jerome Powell join a panel on central bank policy in Sintra, Portugal, on Wednesday.
- Thailand, Philippines and Brazil central bank decisions due Wednesday.
- Bank of England rate decision on Thursday.
- Also on Thursday: U.S. jobless claims, New Zealand GDP, South Korea export data.
- The Organization of Petroleum Exporting Countries meets in Vienna on Friday.
Stocks To Watch
- State Bank of India won’t be able to merge more banks with self (Bloomberg).
- UPL-led consortium is in exclusive talks to acquire Bill Ackman-backed Platform Specialty Products Corp. (Bloomberg)
- Cipla gets final approval for generic drug Sustiva.
- The wealth management arm of IIFL Holdings Ltd raises Rs 745.71 crore from investors including Ward Ferry, Amansa holdings, and HDFC Standard Life.
- DCM Shriram to buyback 55.55 lakh equity shares at Rs 450 each.
- Southern Petrochem signs pact with Indian Oil Corporation Ltd. for gas transportation.
- MPS Ltd. invests Rs 44 crore in the rights issue of subsidiary MPS Interactive Systems.
- Wheels India to consider bonus issue on June 22.
- Kansai Nerolac to acquire 55 percent stake in RAK Paints Ltd., Bangladesh for Rs 45.81 crore.
- SAIL supplies 60,000 tonne steel for railway project in Manipur.
New Offerings
- RITES Rs 460 crore IPO opens today. The state-run railway company to launch an initial public offering by selling 2.52 crore shares at Rs 180-185 apiece in the three-day offer. (More details here).
Bulk Deals
Vaibhav Global
- Malabar India Fund bought 2.34 lakh shares or 0.7 percent equity at Rs 699.98 each.
- Panyaek Jainkijmanee sold 2 lakh shares or 0.6 percent equity at Rs 700 each.
Who’s Meeting Whom
- Inox Leisure to meet IIFL on June 21.
- TVS Motor to meet Goldman Sachs Asset Management on June 22.
- KDDL to meet BOBCAPS on June 20.
- Royal Orchid Hotels to meet Canara HSBC Life on June 20.
- Mercator to meet several fund houses including Motilal Oswal, Tata AMC, HDFC MF on June 20.
Insider Trades
- Centrum Capital promoter BG Advisory Services LLP acquired 65,000 shares on June 15.
- Dhunseri Petrochem promoter Dhunseri Investments acquired 38,473 shares from June 15–18.
- Panama Petrochem promoter acquired 28,273 shares from June 15–18.
Rupee
- Rupee closed near a one-month low at 68.38/$ on Tuesday from 67.99/$ on Monday.
F&O Cues
- Nifty June Futures closed trading at 10,719.8, with a premium of 9.4 points versus a discount of 10 points.
- June series: Nifty open interest down 1 percent while Bank Nifty open interest unchanged.
- India VIX ended at 12.9, up 4.3 percent.
- Max open interest for June series at 11,000 Call (open interest at 53.3 lakh, up 14 percent).
- Max open interest for June series at 10,700 Put (open interest at 48 lakh, down 3 percent).
F&O Ban
- In ban: Dewan Housing, Infibeam, Jet Airways
- Out of ban: Just Dial
Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions
Put-Call Ratio
- Nifty PCR at 1.47 versus 1.51
- Nifty Bank PCR at 0.80 versus 0.81
Stocks Seeing High Open Interest Change
Fund Flows
Brokerage Radar
IIFL on Motherson Sumi
- Maintained ‘Buy’ with a price target of Rs 425.
- Expect significant ramp-up over next 12 months from new plants.
- High level of automation implies significant operating leverage.
- Significant growth and margin improvement at SMP will be key driver.
Deutsche Bank On Voltas
- Upgraded to ‘Hold’ from ‘Buy’, hiked price target to Rs 490 from Rs 470.
- Stock declined 20 percent in past two months on weak commentary for AC sales.
- Lira depreciation by 20 percent in a year could benefit the launch of Voltbek.
- Projects business has started a reversal and strong orders.
- Voltas UCP implied valuations now look reasonable at 26 times FY20 PE.
Citi on Interglobe Aviation
- Maintained ‘Sell’; cut price target to Rs 1,070 from Rs 1,240.
- Elevated fuel costs only partially offset by higher yields.
- Current quarter’s margins could be under pressure.
- Pace of air traffic growth was lower; Too early to conclude that demand is slowing down.
Investec on Cement Sector
- See East region to emerge as the next South.
- Election linked demand trends aren’t encouraging.
- Even with affordable housing demand is insufficient to match supply.
- Margins to be at risk because of inflation.
- Prefer large-caps over mid-caps and North/Central, North-East players over South/East.
Nomura on GAIL (India)
- Maintained ‘Buy’; hiked price target to Rs 460 from Rs 450.
- Higher oil price improves outlook.
- Unbundling talks make case for unified tariff stronger.
- Petchem: could begin to surprise now.
- Key beneficiary of likely inclusion of natural gas in GST.
CLSA On Rural Economy
- Agri push from states in prominence apart from Central Government push.
- State governments too are doing their bit beyond farm loan waivers.
- Telangana has announced free power for farmers and a Rs4,000 per acre cash subsidy.
- Karnataka has announced a Rs5,000 per hectare cash subsidy in certain areas.
- Haryana implements Madhya Pradesh’s minimum support price scheme.
- Uttar Pradesh has upped the procurement volume of potatoes.
- Monsoon season has been just about normal thus far.
- Rural consumption picks: M&M, ITC, Emami, Crompton and Dabur.