All You Need To Know Going Into Trade On June 20

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.

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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

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

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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.

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