All You Need To Know Going Into Trade On October 6

Indian Open

Asian stocks followed their U.S. counterparts higher and the dollar retained gains after a slew of data and comments from Federal Reserve officials helped ratchet up bets that the U.S. economy is strong enough to withstand higher interest rates.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.10 percent to 9,930 as of 7:59 a.m.

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

Global Cues

• The S&P 500 Index capped its longest winning streak since July 2013, with tech shares pacing gains as the prospect for faster economic growth got a lift from better-than-forecast factory orders.
• The CBOE Volatility Index closed at a record low in data going back to 1990.
• U.S. 10-year note yields edged higher, and the dollar pushed its gain in the past month to 2 percent as comments by regional Fed President John Williams reinforced optimism in the economy.

#BQMarketsNow | U.S. stocks extend records with an eighth straight gain.https://t.co/SDhZlBgZb6 pic.twitter.com/KwTyPaDz5m

In data to watch

• The U.S. September nonfarm payrolls report, likely to be affected by the impact of hurricanes on southern states, comes out on Friday. Read here why a better look at the data will be coming on Oct. 20.

Europe

• The pan-European Stoxx 600 ended the day's trading 0.16 percent higher with sectors pointing in different directions at the close
• Spain's IBEX Index rose more than 2 percent Thursday, but remains down for the week.

Asian Cues

• Japan's Topix index was up 0.3 percent, showing little impact from a proposal by the country's key opposition party in the run-up to this month's general election to consider taxing some retained earnings.
• Australia's S&P/ASX 200 Index rose 0.7 percent.
• Hong Kong equity markets will reopen after Thursday's holiday. China and South Korean remain closed for trading.
• Futures on the S&P 500 Index were little changed. The underlying gauge advanced 0.6 percent to 2,552.07 Thursday.

Commodity Cues

• West Texas Intermediate crude was at $50.71 per barrel after gaining 1.6 percent on Thursday. Oil remains on course for its first weekly decline since the start of September.
• Gold was flat at $1,268.39 an ounce.
• ICE sugar ended higher for second day at 14.39 cents a pound, up 1 percent

Indian ADRs

Stocks To Watch

• Future Retail to acquire Hypercity for Rs 655 crore in cash, stock
• Ramky Infra EGM on October 30 to consider convertable warrants to promoters and non promoters (Aadi Financial)
• IDFC Bank and Shriram Group extended exclusivity pact till November 8
• Tata Steel: Second quarter output higher at 3.02 million tonne compared to 2.72 million tonne, a year ago
• Pheonix Mills bought additional 1.8 acres land in Pune for Rs 21.25 crore
• Bank of Baroda cut MCLR by 5 basis points From October 7
• Suzlon said banks are afraid of funding renewable projects with tariff below Rs 3/KwH
• IDBI Bank holders approved Rs 1861 crore share allotment to the Government
• Patel Engineering to issue optionally convertible debentures up to Rs 1,240 crore to lenders of the company under S4A
• KEC International undertakes restructuring of its subsidiaries

Corporate Actions

• Dishman Carbogen Amcis circuit filter revised to 20 percent and shifted to B group
• Graphite India circuit filter revised to 5 percent

IPO

• Godrej Agrovet IPO continues on day 3. The issue subscribed 2.33 times on day 2
• MAS Financial Services IPO opens today with a price band of Rs 456-459

Bulk Deals

Prataap Snacks

• SBI Funds Management Pvt. Ltd. bought 4.40 lakh shares at Rs 1272.68 each
• Smallcap World Fund bought 4.25 lakh shares at Rs 1245.79 each

Worth Peripherals

• HSBC MF bought 99,000 shares at Rs 74.3 each. Had bought 4.98 lakh shares in the company on September 29.

Vadivarhe Speciality Chemicals

• Garnet International Ltd bought 87,000 shares at Rs 128.46 each

Kesar Petroproducts

• Hema Ramesh Ajwani sold her entire 2.07 percent stake of 20 lakh shares at Rs 52.56 apiece
• Principal MF bought 21 lakh shares at Rs 52.5 each

Who's Meeting Whom?

• Chembond Chemical to meet Philip Capital on October 6
• Cupid to meet 7 big funds including likes of GMO, Tata MF, BNP Paribas and others on October 6
• HPL Electric and Power to meet 15-20 fund housed at Philip Capital Investor Conference on October 6
• FIEM Industries to meet SBICAP Securities on October 6th
• Parag Milk to meet Philip capital, IL&FS and ICICI Prudential on October 6
• Veto Switchgear to meet Philip Capital on October 6
• S Chand Meeting investors in London
• Cummins meeting ICICI Securities on October 6

Insider Trades (Reported on October 5)

• JSW Steel: 29.2 lakh shares of promoter released from pledge
• NCC: Promoters bought 50 lakh shares via block deals
• Sintex Industries: Promoter creates pledge for 75 lakh shares
• GOCL: Promoter bought 8 lakh shares from open market
• Vakrangee: Promoter bought 90,467 shares from open market
• Mirza International: Promoter sold 1 lakh shares in open market

Rupee

Rupee ended at 65.14/$ on Thursday from 65.01/$ on Wednesday

Top Gainers And Losers This Month

Index Trends

F&O Cues

• Nifty October Futures closed with a premium of 20 points versus 15.5 points at 9908
• Rollover: Nifty open interest up 4 percent, Bank Nifty open interest down 2 percent
• India VIX closed lower by 0.7 percent at 11.7
• October series highest Call base at 10,000 (open interest at 47.7 lakh, up 11 percent)
• October series highest Put base at shifts to 9800 (open interest at 46.8 lakh, up 4 percent)
• October Call strikes 9900, 10,000, 10,100 sees open interest addition
• October Put strikes 9800 & 9900 see open interest addition

F&O Ban

• In ban: Bharat Earth Movers, DHFL, Indiabulls Real Estate, JP Associates, JSW Energy
• New in ban: Bharat Earth Movers, DHFL

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover.

Put-Call Ratio

• Nifty PCR at 1.26 from 1.29
• Nifty Bank PCR at 0.73 from 0.89

Stocks Seeing High Open Interest Change

• Jubilant Food saw open interest addition of 25 percent on long side
• Powergrid saw open interest addition of 15 percent on short side
• NIIT Tech saw open interest addition of 12 percent on long side
• Engineers India saw open interest addition of 10 percent on short side
• Indo Count saw open interest addition of 9 percent on long side
• Just Dial saw open interest addition of 8 percent on long side
• Tata Elxsi saw open interest addition of 7 percent on long side

Fund Flows

Brokerage Radar

Jefferies assuming coverage on consumer staples

• Building improvement in volumes and sales over FY17-20
• Limited scope for margins to expand further
• Sector valuations are a concern; Valuations leave little margin of safety

Jefferies on Colgate

• Assumes coverage on the stock with ‘Hold' rating and rice target of Rs 1,025
• Could continue to lose market share to Patanjali and Dabur
• Expect Volumes, revenue and EPS to grow at CAGR of 4.5 percent, 8 percent and 10 percent respectively over FY17-20

Jefferies on Emami

• Assumes coverage on the stock with ‘Hold' rating and price target of Rs 1,190
• Company needs new growth drivers
• Upside from market share and growth potential of cooling oils and antisepticcream seems limited
• Expect Revenue and EPS to grow at CAGR of 11.5 percent and 15 percent respectively over FY17-20
• Company to turn net cash of Rs 500 crore by FY19 from Rs 300 crore net debt in FY17

Jefferies on Godrej Consumer

• Assumes coverage on the stock with ‘Hold' rating and price target of Rs 970
• Africa business growth would be key over next two to three years
• Further margin expansion might be difficult
• Expect Revenue and EPS to grow at CAGR of 10 percent and 12.5 percent over FY17-20

Jefferies on HUL

• Maintain ‘Buy' with price target of Rs 1,320
• Expect gradual pick-up in volume growth and 300 basis points rise in EBITDA margin
• Expect Volume, revenue and EPS to grow at CAGR of 6 percent, 10 percent and 16.5 percent respectively over FY17-20

Jefferies on ITC

• Maintain ‘Hold' with price target of Rs 305
• Cigarette business to remain impacted by regulatory pressures
• Other businesses to see gradual uptick in growth and profitability
• Expect Revenue and EPS to grow at CAGR of 10 percent and 11 percent respectively over FY17-20

Jefferies on Marico

• Assumes coverage on the stock with ‘Hold' rating and price target of Rs 295
• Market share gain would slow down and entry into new categories still challenge
• Expect Volume, revenue and EPS to grow at CAGR of 7.5 percent, 11 percent and 12 percent respectively over FY17-20
• Expect flattish margins over FY17-20

Jefferies on Nestle India

• Assumes coverage on the stock with ‘Hold' rating and price target of Rs 7,800
• Sustained period of investments and flawless execution required to regain market share
• Competitive pressures remains high in core business
• Expect Revenue and EPS to grow at CAGR of 12 percent and 13 percent respectively over CY16-19

Jefferies on United Spirits

• Assumes coverage on the stock with ‘Hold' rating and price target of Rs 2,500
• Company to take long time to build scale in premium segment given Pernod's dominance
• Expect Revenue, EBITDA and Net Profit to grow at CAGR of 9 percent, 19 percent and 33 percent over FY17-20
• EBITDA Margins to expand by 350 basis points over FY17-20
• Divestment of non-core assets to reduce debt

CLSA on Wind Tariff Fall

• Tariff-based competitive bidding to force wind turbine generator producers to cut prices and developers to accept lower returns
• Little risk of renegotiation of regulated agreements
• Channel checks suggest feed-in-tariff order book of 1GW has been cancelled
• INOX has announced order cancellations; Even Suzlon‎ sees order cancellations

Motilal Oswal on Shilpa Medicare

• Maintain Buy with price target of Rs 805; Potential Upside of 41 percent
• Company progressing well on ANDA filings, 26 pending approvals
• Sales in U.S. expected to ramp-up, led by its existing products and new approvals
• Expect U.S. revenue of Rs 400 crore in FY20; Earnings to grow at CAGR of 42 percent over FY17-20
• Company is well positioned in the Europe market

Morgan Stanley on Jubilant Foodworks

• Stock upgraded to ‘Overweight' from ‘Equalweight'; hiked price target to Rs 1,780 from Rs 900
• Channel checks show still-favorable demand trends with SSSG to offset cost inflation
• Combination of demand growth, moderate cost inflation, stringent cost control, and favorable base to drive earnings
• Same store sales growth to be 8 percent, 10 percent and 12 percent for FY18, FY19 and FY20 respectively.
• Expect margin to expand by 610 basis points over FY17-F20
• Hiked EPS estimates by 19 percent, 28 percent and 28 percent for FY18, FY19 and FY20 respectively.
• Expect EPS to grow at CAGR of 60 percent over FY17-20
• Bull Case Target of Rs 2,500 on strong Same store sales growth over FY18-20 and revenue CAGR of 30 percent

Emkay on BASF India

• Initiates Buy Rating with price target of Rs 2,212; Potential Upside of 51 percent
• Substantial CAPEX will now reduce reliance on imports
• BASF India poised to demonstrate strong recovery in net profit and return ratios
• Return on capital employed to rise to 22 percent in FY20, compared to 4 percent in FY17
• Manufacturing and new product launches to drive growth
• Expect revenue and EBITDA to grow at CAGR of 14 percent and 39 percent respectively over FY17-20 led by settlement of technical issues and enhanced capacity utilization

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