All You Need To Know Going Into Trade On September 7

Asian stocks climbed in early Thursday trade, following a rebound in U.S. equities, as investors weighed a U.S. deal that ensures the funding of its government through mid-December against persistent geopolitical tensions.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, climbed 0.31 percent to 9,976 as of 7:00 a.m.

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

Global Cues

• U.S. stocks pushed higher while longer-term government debt fell after lawmakers reached a deal with President Donald Trump to extend the U.S. debt limit and fund the government through mid-December.

#BQMarketsNow | U.S. stocks edged higher; long-term government debt falls.https://t.co/geByPvijmA pic.twitter.com/gdhnDigKmD

• In Europe, traders remained cautious ahead of the European Central Bank meeting where policymakers are expected to yield clues on when the central bank will shift away from its ultra-easy policy

Asian Cues

• The Topix index rose 0.6 percent, while the Kospi index in South Korea was up 0.6 percent and Australia's S&P/ASX 200 Index added 0.4 percent.
• Futures on Hong Kong's Hang Seng index gained.
• The MSCI Asia Pacific Index climbed 0.3 percent.

The key events coming this week:

• China trade figures this week are anticipated to show another month of solid export growth, while FX reserves probably continued to rise on stricter capital controls, robust growth and a stronger yuan, according to Bloomberg Intelligence.
• The European Central Bank meets on Thursday. Mario Draghi will express concern over the euro's strength, but won't say much about his asset-purchase program's future, according to a Bloomberg survey.

Commodity Cues

• West Texas Intermediate crude was little changed at $49.13 a barrel after jumping 1 percent.
• Gold was steady at $1,333.33 an ounce after falling 0.4 percent Wednesday.
• The Bloomberg Commodity Index gained 0.4 percent Wednesday to 85.72, the highest since April.
• ICE sugar ended higher for second day at 14.29 cents a pound; up 1.85 percent

Shanghai Exchange

• Steel trades lower for third day; down 1.73 percent
• Aluminium trades lower for third day; down 0.15 percent
• Zinc trades lower for third consecutive session; down 0.79 percent
• Copper trades higher; up 0.19 percent
• Rubber trades higher for sixth day; up 0.40 percent

Indian ADRs

Earnings To Watch

• Global Vectra Helicorp
• Haldyn Glass
• Plastiblends
• Shreyans Industries
• Sterling Tools
• Uttam Sugar
• Vaibhav Global

Earnings Reaction To Watch

Butterfly Gandhimati (Q1FY18, YoY)

• Revenue up 3.3 percent at Rs 95 crore
• Operating loss at Rs 2.5 crore
• Margin stood at -2.9 percent versus -1.2 percent
• Net loss narrows to Rs 8.8 crore versus Rs 9.7 crore

MT Educare (Q1FY18, YoY)

• Revenue fell 3.66 percent to Rs 79 crore
• EBITDA grew 22 percent to Rs 11 crore
• Margin at 13.9 percent versus 11 percent
• Profit fell 60 percent to Rs 2 crore

Stocks To Watch

• Reliance Industries to acquire assets of Kemrock Industries foraying into new materials business.
• Sagar Cement consolidated production grew 19.9 percent to 1,91,708 Mts while sales grew 15.3 percent to 1,99,216 Mts
• Sasken Technologies received NCLT nod for the merger of Sasken Network Engineering with itself.
• Avanti Feeds said that commercial production commenced at its subsidiary Avanti Frozen Foods' new plant in Andhra Pradesh
• NBCC won an order worth Rs 464 crore from the government
• HCL Technologies acquired assets worth 3.25 million pounds of UK-based Alpha Insight
• Vardhman Textiles acquired the entire stake of Marubeni Corp and Marubeni Hong Kong & South China through its subsidiary VMT Spinning Company
• Petronet LNG will form a JV with Japanese and Sri Lankan companies for terminal
• Asian Paints commenced operations at its manufacturing unit in Indonesia.
• Sicagen India to acquire the remaining 40 percent stake in Danish Steel
• HFCL's and Bharat Seats' circuit filter revised to 10 percent
• Reliance ex-date for 1:1 bonus. The F&O lot size is 1,000.
• LIC reduces stake in Raymond by 2.01 percent
• NHAI awards Myanmar contract to Punj Lloyd JV
• JM Financial ARC offers to buy out loans to Gujarat NRE (Mint)
• Eicher's Royal Enfield closes in on Ducati, plans $1.8 billion bid (Economic Times)
• Bharat Forge: North America class 8 truck sales for August at 20,683 units versus 14,078 units last year (18,255 units in July)

IPO Watch

• Dixon Technologies IPO continues on Day 2. The issue was subscribed 0.78 times at end of Day 1.
• Bharat Road Network IPO continues on Day 2. The issue was subscribed 0.22 times at end of Day 1.

Bulk Deals

• Himachal Futuristic: GMO Emerging Markets Quality Fund bought 1.1 crore shares (0.9 percent equity) at Rs 23.92 each
• Gateway Distriparks: GMO Emerging Domestic Opportunities Fund sold 12.62 lakh shares (1.2 percent equity) at Rs 219.67 each
• Religare Enterprises: Yes Bank sold 9.55 lakh shares (0.5 percent equity) at Rs 40.23 each

Rupee

• Rupee ends at 64.11 against the dollar versus 64.12 on Tuesday

Top Performers In September

• Himachal Futuristic Communications: Up 42.6 percent
• Bombay Dyeing: Up 27.4 percent
• Sun TV: Up 19.5 percent
• JBF Industries: Up 18 percent
• Nitin Fire: Up 17.8 percent

Worst Performers This Month

• Religare Enterprises: Down 19.3 percent
• Kwality Ltd: Down 17.7 percent
• Shilpi Cable Technologies: Down 10.5 percent
• Idea Cellular: Down 9.7 percent
• Vijaya Bank: Down 7.6 percent

Index Trends

F&O Cues

• Nifty September Futures premium unchanged at 19 points
• Nifty Futures open interest went up 5 percent while Bank Nifty futures open interest fell 5 percent
• India volatility index closed 1.8 percent higher at 13.12
• September series' highest call base at 10000 (open interest at 43.2 lakh, up 4 percent)
• September series' highest put base at 9700 (open interest at 46.8 lakh, up 1 percent)
• Call strikes 9900, 9950, 10,000, 10100 see OI addition
• Put strikes 9600, 9800 see OI addition

F&O Ban

• In ban: Indiabulls Real Estate, JSW Energy, Just Dial
• New in ban: Just Dial
• Only intraday positions can be taken in stocks which are in F&O ban, incase of rollover there is a penalty

Put-Call Ratio

• Nifty PCR at 1.33 versus 1.35
• Nifty Bank PCR at 1.02 versus 0.98

Stocks Seeing High Open Interest Change

• Equitas saw 23 percent addition on long side
• PNB saw 23 percent addition on short side
• Repco Home saw 21 percent addition on long side
• Godrej Consumer saw 20 percent addition on short side
• Muthoot Finance saw 18 percent addition on long side
• Reliance Capital saw 17 percent addition on long side
• Just Dial saw 17 percent addition on long side
• Container Corporation of India saw 11 percent addition, short covering seen

Fund Flows

Brokerage Radar

CLSA on Indiabulls Housing Finance

• Maintain Buy; hike target price to Rs 1,500 from Rs 1,380
• Growth will be driven on ability to scale up housing loans
• IHFL has strong presence in fast-growing markets (distant suburbs of Mumbai)

HSBC on SKF India

• Maintain Buy with target price of Rs 2,000; potential upside of 31 percent
• Remote diagnostic and India distribution centre and strong pipeline of innovative products should lead to improved operational performance
• SKF gaining market in PV/CV segment and exiting unprofitable two-wheeler segment
• Revenue to grow by 11 percent/19 percent for FY18/19
• EPS to grow by 24 percent/22 percent for FY18/19

Emkay on CESC

• Upgrade to Buy from Accumulate; hike target price by 24 percent to Rs 1,248; Upside of 19 percent
• Demerger plan is value accretive, as it would unlock value for CESC
• Revised earnings estimates for Spencer's by 25 percent/74 percent for FY18 and FY19
• Target price factors in turnaround in Spencer and re-rating of distribution and generation business

IIFL on Thermax

• Maintain Add and target price of Rs 1,054; potential upside of 17 percent
• GST disruption to settle down by end of first half of FY18
• Company optimistic of pickup in the capex cycle by end of FY18 and in FY19
• EPS estimates cut by 6 percent/3 percent/3 percent for FY18/19/20
• Revenue/net profit to grow at CAGR of 14 percent/15 percent over FY17-20

HSBC on Aurobindo Pharma

• Maintain Buy; Cut target price to Rs 850 from Rs 856
• Maintained buy on sustained U.S. growth outlook with growth largely driven by injectables
• U.S. outlook remains steady with multiple visible launches
• Commissioning of new facilities to help in better launch rate
• DTG-combination launch and improving margin profile of European Union to support U.S. traction
• Injectables sales/overall U.S. sales to grow at CAGR of 29 percent/13 percent over FY17-19

Jefferies on Shree Cement

• Maintain Hold with target price of Rs 18,109
• Company remains on track to reach 40 metric tonne by FY19 end
• Management positive on cement demand led by housing and infrastructure
• Stock has already priced in benefits

Credit Suisse on Shriram Transport Finance

• Maintain Outperform rating with target price of Rs 1,350
• No significant update on the proposed merger with IDFC
• Management confident on 12-15 percent growth guidance
• Company remains a significantly undervalued franchise

JPMorgan on Oil & Gas

• Expect the OMC to report strong earnings in Q2FY18; H2FY18 could cool off
• Remain overweight on IOCL and BPCL; Underweight on HPCL
• RIL should also benefit from the recent surge in refining
• Large cut in IUC to benefit RIL's telecom operations

Credit Suisse on Metals

• Iron ore and coking coal prices up 40-45 percent in last three months due to weather related disruptions
• Spike in RM cost accompanied by rising steel prices
• Steel stocks appear expensive on price-to-book, but EV per tonne still reasonable
• Prefer Tata Steel over JSW Steel on the back of 30percent ore integration

Morgan Stanley on Metals

• Coking coal prices expected to remain flat/down marginally by end of Q2FY18
• Costs could rise for some companies on higher iron ore prices
• JSW Steel to benefit from strength in domestic steel prices and operating efficiencies
• Tata Steel remains top pick on improving fundamentals for domestic business

UBS on Telecom Sector

• Jio made good progress on distribution
• Rate of decline in recharges has slowed since March 2017
• Airtel still consumers preferred choice and top recharged brand
• Raise Jio's revenue market share estimates by 30-310 basis points over FY18-22
• Idea Cellular target price cut to Rs 95 from Rs 104

Deutsche Bank Markets Research on Telecom Sector

• 100 percent cut in IUC to reduce Airtel/Idea EBITDA by 9 percent/20 percent
• Airtel/Idea's IUC revenue at Rs 800/350 crore in Q1FY18
• Roadmap for IUC reduction over the next few years would allay investor concerns
• DB expects IUC to reduce to 10 paise

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