All You Need To Know Going Into Trade On Sept. 07

Asian stocks are ending the worst week since March with further declines amid ongoing concerns about global trade and emerging markets.

Equities fell in Japan, Australia and South Korea, while futures in China and Hong Kong pointed to losses. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, traded rose 0.1 percent to 11,564 as of 7:20 a.m.

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BQ Live

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

U.S. Market Check

• U.S. stocks fell to a two-week low amid renewed selling in technology shares as the Trump administration eyed escalating the trade war and concerns mounted over flagging demand for computer chips.
• The yield on 10-year Treasuries held at 2.87 percent.

#BQMarketWrap | U.S. technology shares drop, treasuries gain.

Read: https://t.co/LjoS60zp3t pic.twitter.com/ogB67r54ZS

Europe Market Check

• European equities fell for a third day amid contagion from a technology selloff in the U.S.

Asian Cues

• Japan's Topix index slid 0.5 percent.
• South Korea's Kospi index lost 0.4 percent.
• Australia's S&P/ASX 200 index slipped 0.2 percent
• Futures on Hong Kong's Hang Seng index lost 0.6 percent.
• FTSE China A50 index futures declined 0.1 percent.
• The S&P 500 fell 0.4 percent and the Nasdaq 100 Index dropped 0.9 percent.
• The MSCI Emerging Market Index decreased 0.3 percent Thursday, bringing this week's losses to 3.6 percent.

Commodity Cues

• The Bloomberg Commodity Index fell 0.3 percent.
• West Texas Intermediate crude added 0.2 percent to $67.92 a barrel.
• Brent crude traded 0.1 percent higher at $76.59 a barrel.
• Gold was flat at $1,201.14 an ounce.

Shanghai Exchange

• Steel traded higher for second day; up 2.7 percent.
• Aluminium traded lower; down 0.7 percent.
• Zinc traded higher for second day; up 1.5 percent.
• Copper traded higher for second day; up 0.4 percent.
• Rubber traded lower; down 0.7 percent.

Indian ADRs

Stocks To Watch

• The U.S. drug regulator issued Sun Pharma six observations to its Halol plant for inspections done during Aug. 27-31. BloombergQuint accessed the Form 483, which was issued by the U.S. FDA to the drug maker.
• Welspun Corp entered an agreement for supply of 220 KMT of Pipes for Oil & Gas project in the Americas region. With this addition, company's current order book stands at 1,776 KMTs valued at Rs 15,000 crore.
• Bajaj Auto will enhance its production capacities of three-wheeler and quadricycles to one million per year. This announcement comes on grounds of Minister for Transport Nitin Gadkari's announcement at the SIAM convention to move to a “no-permit” regime for auto rickshaws powered by alternate fuels. The company said that it is the market leader with 86 percent market share in the alternate fuel three-wheelers.
• L&T Technology Services to acquire 100 percent stake in in Graphene Semiconductor Services Pvt Ltd. for Rs 93 crore. The acquisition includes all the three subsidiaries of the semiconductor company located in Singapore, Malaysia and Taiwan. This will enable L&T's technology arm to strengthen its footprint in the VLSI chip design and embedded software services, and to cross-sell to the marquee client base of Graphene Semiconductor Services.
• L&T Financial Services clarified that it had submitted necessary details to the Registrar of Companies regarding its IPO in July 2011 and has still not received any further communication. This clarification comes after media reports alleging the misuse of IPO proceeds by the company.
• IDBI Bank filed insolvency application with NCLT, Ahmedabad against Reliance Naval and Engineering seeking debt arbitration.
• Gufic Biosciences received NCLT nod for merging Gufic Stridden Bio-Pharma Private Limited with self.

Media Reports

• Mahindra & Mahindra's Managing Director, Pawan Goenka said that the company will launch two SUVs and one premium car by the end of the year. He also added that 1,000 electric cars will be manufactured per month by May next year versus 500 units produced now. The automaker sees an addition of up-to 9,000 units of monthly sales from the new launches (Bloomberg).
• L&T's ex-employee moves NCLT alleging mismanagement by firm. According to Uday Dixit's petition, employees were verbally informed in a general meeting of the union that some amount would be deducted from their salaries and equity shares of L&T for the deducted amount would be issued to them. However, employees were given shares of the Employee Welfare Pvt. Ltd. company (PTI).
• Jet Airways' pilots warn of "non-cooperation" as salary payment gets delayed for the second consecutive month. (PTI)

Bulk Deals

• One Point One Solutions: HSBC Asset Management (I) Pvt. Ltd. sold 1.26 lakh shares at Rs 58.06 apiece. The company is an SME listed on NSE Emerge Exchange.

Trading Tweaks

• Garware Polyester placed under additional surveillance measures.
• Out of ASM: Amrutanjan Health Care, Borosil Glass Works, International Paper, JK Paper, Kirloskar Oil Engines, Lincoln Pharmaceuticals, Pfizer, Tamil Nadu Newsprint.

Who's Meeting Whom

• Blue Star to meet T Rowe Price and Portfolia Japan on Sept. 7.
• Dr Lal PathLabs to meet Alder Capital on Sept. 7.
• Magma Fincorp to meet Goldman Sachs on Sept. 7.

Government looking to raise Rs 470.5 crore by divesting 10.5% stake in Ircon International.

Read: https://t.co/tldtJ1Qzsl pic.twitter.com/KgmtTVcvHk

Insider Trades

• Oriental Hotels promoter acquired 60,000 shares on Sept. 4.
• Nava Bharat Ventures promoter group acquired 9,000 shares on Sept. 5.
• Kitex Garments promoter acquired 16,800 shares on Sept. 5.
• Confidence Petroleum India promoter acquired 1.1 lakh shares on Sept. 5.
• Balaji Amines promoters acquired 9,000 shares on Sept. 5.

Money Market Update

• The rupee on Thursday closed at an all-time low of 71.99 per dollar after it breached the 72-mark in trade earlier.

F&O Cues

• Nifty Sept. futures closed trading at 11,567 premium of 30 points versus 41.3 points.
• September series: Nifty open interest up by 3 percent; Bank Nifty open interest down by 8 percent.
• India VIX ended at 13.7, up 0.5 percent.
• Max open interest for September series call at 11,800 strike price call option (open interest at 41.6 lakh, open interest down 0.5 percent) .
• Max open interest for September series put at 11,400 strike put price option (open interest at 44.6 lakh, open interest up 15 percent).

Put-Call Ratio

• Nifty PCR at 1.39 versus 1.37.
• Nifty Bank PCR at 0.83 versus 0.64.

Brokerage Radar

Morgan Stanley on HDFC AMC

• Initiated ‘Buy' with a target price of Rs 2,050; potential upside 22 percent
• Structurally bullish on Indian mutual funds
• Strong franchise to play India's financial savings growth story
• Offers all the ingredients to be the best play in MF space
• Valuation is lofty, but strong earnings compounding should drive healthy returns

IDFC Securities on Aurobindo Pharma

• Maintained ‘Outperformer' with a price target of Rs 900.
• Sandoz business acquisition is positive strategically as well as financially.
• Niche dermatology segment has significant long-term competitive advantage.
• Aurobindo is our preferred pharma pick.

Nomura on Bharat Forge

• Maintained ‘Neutral' with a price target of Rs 700.
• August North America Class 8 orders breaks July's record.
• Expect 25 percent and 15 percent growth in commercial vehicles in the current and the next financial year respectively.
• Adverse U.S. regulations could impact earnings.

Nirmal Bang on Sanofi India

• Initiated ‘Buy' with a price target of Rs 7,570
• Earnings to outpace revenue growth led by high-margin portfolio.
• Key growth drivers: insulin portfolio, Allegra and Combiflam topical pain relief gel/spray.
• Expect revenue and net profit to grow at a compounded annual growth rate of 11 percent and 24 percent respectively over 2017-2020.

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