Caution Grips Sensex, Nifty As Trade War Concerns Intensify

• Kanoria Chemicals: The Kolkata-based chemical maker rose as much as 7 percent, the most in over a month, to Rs 73.50. The company is planning to set up formaldehyde plant with 1 lakh tonne per annum capacity in Andhra Pradesh, Kanoria Chemicals said in an exchange filing.
• Idea Cellular: The Aditya Birla Group wireless carrier rose as much as 4.2 percent to Rs 63.20 as the telecom department is likely to approve merger of Vodafone India and Idea Cellular.
• Panacea Biotech: The Punjab-based drugmaker rose as much as 5.2 percent to Rs 287.20 after settled patent dispute with Celgene Corp.
• Bata India: The Gurugram-based shoe maker rose as much as 4.4 percent to Rs 813.65 after Angel Broking initiated coverage on the stock with a ‘Buy’ for target price of Rs 896.

Government is planning to offload a stake in Coal India to speed asset sales after a disastrous attempt to find a buyer for the cash-strapped Air India, Bloomberg reported citing people with knowledge of the matter said.

Government owns more than 78 percent stake in Coal India and it had sold 10 percent stake in 2015 for Rs 22,550 crore.

Coal India shares fell over 2 percent to intraday low of Rs 273.

• Tata Investment Corp: The Mumbai-based investment firm fell as much as 3.8 percent to Rs 875. Trading volume was 14.6 times its 20-day average.
• Indo Count Industries: The Mumbai-based textile manufacturer rose as much as 13.9 percent to Rs 77.45. Trading volume was 5.1 times its 20-day average.
• Cochin Shipyard: The Cochin-based ship building company fell as much as 0.8 percent to Rs 466. Trading volume was 5 times its 20-day average.
• GHCL: The Noida-based chemical maker rose as much as 5.5 percent to Rs 288.75. Trading volume was 5 times its 20-day average.

• Indian equity benchmarks were trading on a subdued note dragged by weakness in metal shares as concerns grew over the escalating protectionist standoff between China and the U.S.
• The S&P BSE Sensex fell 0.2 percent or 71 points to 35,548 and the NSE Nifty 50 index declined 0.16 percent or 17 points to 10,801.
• Nine out of 11 sector gauges compiled by National Stock Exchange were trading lower led by Nifty Metal index's 2 percent drop.
• The mid- and small-cap shares were underperforming larger peers as the Nifty Midcap 100 and Nifty Smallcap 100 indexes fell 0.5 percent.
• The overall market breadth was negative as 1,629 shares were declining while 840 were advancing on BSE.

Source: Arun Jaitley's official Facebook page

Shares of oil retailers were trading higher after crude fell for second day in a row ahead of OPEC meet to discuss whether to relax oil output caps.

• Hindustan Petroleum rose 5 percent
• Indian Oil advanced 4.6 percent
• Hindustan Petroleum gained 2.6 percent

Shares of the Secunderabad-based company engaged in business of granite quarrying fell as much as 3 percent to Rs 174.50 after well-known investor Ashish Kacholia sold 1.2 percent stake in the company.

Ashish Kacholia sold 3.6 lakh shares at an average price of Rs 177.90 per share.

• India will stick to its fiscal deficit target of 3.3 percent, acting finance minister Piyush Goyal said in New Delhi.

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Shares of the renewable arm of Adani Enterprises started trading at Rs 27 on BSE and Rs 30 on NSE; They hit the upper permissible limit of 5 percent from discovery price on NSE and BSE on listing after demerger.

• The pre-open discovery price on BSE was 28 rupees and on NSE it was 30 rupees.
• Adani Enterprises demerged its renewable power business into Adani Green Energy.
• Adani Enterprises issued 761 shares of Adani Green of Rs 10 to the shareholders for every 1,000 shares in company

Shares of the Aditya Birla Group wireless carrier rose as much as 4.2 percent to Rs 63.20.

The telecom department is likely to approve merger of Vodafone India and Idea Cellular that will create the country's largest mobile service operator with proposed name of Vodafone Idea Ltd, news agency Press Trust of India reported citing an official source.

Idea and Vodafone have decided to combine their operations to create the country's largest telecom operator worth over $23 billion (or over Rs 1.5 lakh crore), with a 35 percent market share and a subscriber base of around 430 million.

CLSA Has These 10 Mid-Cap Stocks On Its Radar

Shares of the Goa-based metal manufacturer fell as much as 3.6 percent to Rs 230 after Vedanta's parent company halted operations a Zambia mine.

Vedanta today replaced Dr. Reddy's Labs in the S&P BSE Sensex index and made a weak comeback in the Sensex.

Shares of the Kolkata-based chemical maker rose as much as 7 percent, the most in over a month, to Rs 73.50.

The company is planning to set up formaldehyde plant with 1 lakh tonne per annum capacity in Andhra Pradesh, Kanoria Chemicals said in an exchange filing.

• IDFC Bank has 24 lakh shares change hands in a block deal. Stock up 0.5 percent at Rs 43.45.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Hyderabad-based drugmaker fell as much as 2.55 percent to Rs 2,290 after a court in the U.S. retrained it from selling generic variant of Subaxone.

Dr. Reddy's Labs on Friday informed exchanges that it received U.S. drug regulator's approval for Buprenorphine and Naloxone Sublingual Film in the U.S. Market.

The drug is used to treat adults with opioid dependence/addiction.

Shares of the country's second largest private lender rose as much as 1.7 percent to Rs 287.

ICICI Bank group is discussing reshuffling its top management and may appoint CEO of its life insurance venture Sandeep Bakshi as ICICI Bank’s interim CEO, The Economic Times reported citing four unidentified people aware of the matter.

Indian sovereign bonds are likely to gain after the regulator eased some rules to provide foreign funds more flexibility to invest in government securities. On the other hand, rupee could extend Friday's loss after the trade war between U.S. and China escalates.

Cap on total foreign portfolio investment into any government security has been raised to 30 percent of outstanding stock from earlier 20 percent. Yields, which fell 6 basis points to 7.89 percent on Friday could see further decline. It may trade in a range of 7.80-7.90 percent.

The rupee may remain under pressure and with most Asian units in the red, we may see the pair in a range of 68.05-68.40 a dollar in the day.

CLSA's Midcap Strategy

• Prefer stocks with growth visibility.
• Consumer discretionary and building materials space have seen strongest earnings.
• Like hotels as a cyclical recovery play.
• Key Buys: Apollo, Arvind, Godrej properties, Havells, Jubilant, Lemon Tree, Prestige and Ramco Cement.
• Key Sell: Pidilite and Voltas.

Morgan Stanley on Dr. Reddy's Lab

• Maintained ‘Overweight’ with a price target of Rs 3,465.
• Received temporary restraining order from U.S. District Court on gSuboxone.
• Winning PI motion over the next few weeks will be important.
• Expect earnings recovery led by complex launches in the U.S., momentum in EM business, and scaling up IP portfolio.

Credit Suisse on L&T

• Maintained ‘Outperform’ with a price target of Rs 1,700.
• Exceptionally strong domestic inflows continue.
• Private sector ordering still continues to be low in single digits.
• Expect very strong inflows, execution pick up, steady profitability across segments.
• Valuations still look reasonable.
• Investment cycle is building up can add upside visibility.

Motilal Oswal on TCS

• Maintained ‘Neutral’ with a price target of Rs 1,750.
• Buyback slightly negative on EPS; positive on return ratios.
• To return 40 percent of cash to shareholders.
• 75 percent payout maintained historically.
• Acceptance likely to be high on retail.

• Nifty June Futures ended at 10,814.6, with a discount of 3 points versus premium of 5.9 points.
• June series- Nifty open interest (OI) up 3 percent and Bank Nifty OI down 3 percent.
• India VIX ended at 12.07, down 0.2 percent.
• Max OI for June series call at 11,000 strike price call option, OI at 43.5 lakh shares, up 5 percent.
• Max OI for June series put at 10,700 strike price put option, OI at 48 lakh shares, down 3 percent

Insider Trades

• Panama Petrochem promoter acquired 20,211 shares from June 12-14.
• Century Plyboards promoter Vishnu Khemani acquired 10,505 shares from June 14-15.
• KM Sugar Mills promoter Uma Devi Jhunjhunwala sold 30,924 shares on June 15.
• Vardhman Special Steels promoter Sachit Jain acquired 10,000 shares from June 13-14.

(As reported on June 15)

Who’s Meeting Whom

• Rallis India to meet Tattva Capital and Enam Asset Management from June 18-22.
• Wabco India to meet investors on June 19.
• Voltas to meet ICICI Securities, Kotak Securities and other investors from June 19-20.
• TVS Motor to meet JP Morgan India on June 19 and White Oak Capital on June 27.

Bulk Deals

Pokarna

• Ashish Kacholia sold 3.60 lakh shares or 1.2 percent equity at Rs 177.9 each.

Balrampur Chini

• California Public Employees Retirement System bought 12.20 lakh shares or 0.5 percent equity at Rs 73.84 each.

Torrent Pharma

• Lavender Investments sold 9.01 lakh shares or 0.5 percent equity at Rs 1475 each.

Indiabulls Real Estate

• The company bought back 26 lakh shares or 0.5 percent equity at Rs 172.79 each.

Vakrangee

• Baron Emerging Markets Fund sold 1.02 crore shares or 1 percent equity at Rs 41.5 each.

CIL Nova Petrochemicals

• Asia Investment Corporation Mauritius bought 1.40 lakh shares or 0.5 percent equity at Rs 29 each.

• U.S. court restrains Dr Reddy’s from selling generic variant of Suboxone.
• PNC Infratech says lowest bid for Purvanchal Expressway cancelled.
• NBCC expects 40 percent revenue growth in FY19; Eyes Africa contracts.
• Panacea Biotech along with partner Apotex settle patent dispute with Celgene Corp.
• Avana Logistek, an associate company of Shreyas Shipping, files DRHP with SEBI for IPO.
• HCL Infosystems concludes sale of entire stake in HCL Services to Karvy Data Management Services.
• Kanoria Chemicals and Industries to set up Formaldehyde plant with 1 lakh tonne per annum in Andhra Pradesh.
• ICICI Bank board may name Sandeep Bakshi as ICICI Bank Interim CEO (The Economic Times)
• Telecom Department may clear Vodafone-Idea merger on Monday.
• Tata Steel: Thyssenkrupp shareholders are said to be sceptical of Tata deal. (Bloomberg)

Thyssenkrupp shareholders are said to be skeptical of Tata deal.https://t.co/L2mVXsx7cC pic.twitter.com/32KPgOoKkn

— BloombergQuint (@BloombergQuint) June 18, 2018

Here are key events to watch for this week:

• On Monday, the U.K. House of Lords takes up the Brexit withdrawal bill after dramatic votes in the Commons, with details likely to emerge on the amendment that quelled a revolt by pro-EU Conservatives.
• European Central Bank President Mario Draghi speaks at ECB’s Forum on Central Banking on Tuesday.
• U.S. housing starts probably rose in May, data out Tuesday is expected to show.
• 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.