Asian stocks look set to close out a lackluster week on a positive note on Friday as investors continue to debate the outlook for central bank policy normalisation and the impact of higher bond yields.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 10,399 as of 7:10 a.m.
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DayBreak
Here’s a quick look at all that could influence equities on Friday.
Global Cues
- U.S. stocks eked out a gain to halt a two-day slide, but not before erasing an advance that topped 1 percent as investors grappled with the threat from higher interest rates.
- The S&P 500 Index faded from session highs in afternoon trading for a fourth straight day. ended in the green after briefly turning lower in last trading as the index coughed up its biggest advances for a fourth straight day.
- The 10-year Treasury yield interrupted its march toward 3 percent. The dollar snapped a four-day rally.
- The Cboe Volatility Index slipped below 20, well above its average for the past year, when unprecedented calm gripped markets.
Europe Check
- European stocks fell for the first time in three days as companies from Ingenico to Moneysupermarket.com tumbled on earnings, while a late-afternoon recovery in energy shares moderated declines.
X
Asian Cues
- Japan’s Topix Index was up 0.5 percent as of 9:48 a.m. in Tokyo.
- Futures on the S&P 500 climbed 0.2 percent.
- Australia’s S&P/ASX 200 rose 0.5 percent.
- South Korea’s Kospi was up 1 percent.
Here are some of the key events scheduled for this week:
- U.K. PM Theresa May is locking down her ministers in a bid to agree what kind of post-Brexit trade deal they want from the EU.
- Companies announcing earnings include Royal Bank of Scotland.
Commodity Cues
- West Texas Intermediate crude slipped 0.1 percent to $62.68 per barrel after climbing Thursday thanks to an unexpected drop in American supplies unexpectedly shrank.
- Brent Crude snapped two-day gains, declining 0.2 percent to $66.25 per barrel.
- Gold futures were down 0.2 percent to $1,329.84 an ounce.
Indian ADRs
X
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Earnings Reaction To Watch
Sanofi India Q4 (YoY)
- Revenues up 11 percent at Rs 670 crore.
- Net profit rose 43 percent to Rs 76 crore.
- Ebitda up 23 percent at Rs 134 crore.
- Margins at 20 percent versus 18 percent.
Merck Q3 (YoY)
- Revenues up 22 percent at Rs 304 crore.
- Net profit rose 42 percent to Rs 27 crore.
- Ebitda up 30 percent to Rs 30.5 crore.
- Margins at 10 percent versus 9.4 percent.
KSB Pumps Q3 (YoY)
- Revenues jumped 31 percent to Rs 328 crore.
- Net profit up 17 percent at Rs 27 crore.
- Ebitda up 12 percent to Rs 42.5 crore.
- Margins at 13 percent versus 15.1 percent.
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Stocks To Watch
- Fortis Healthcare: All existing F&O contracts will expire on March 28, and no fresh contracts will be available if the firm fails to submit results for quarters ended September and December 2017 by March 1.
- Federal Bank: Board approved buying 26 percent stake in Equirus Capital.
- Mahanagar Gas will bid for more city gas networks in the next auction.
- Genus Paper & Boards signed two MOUs for setting up Kraft Paper manufacturing plant.
- Bank of Baroda said that it has no exposure to LOUs issued by PNB in the alleged fraud case involving Nirav Modi.
- Dilip Buildcon bagged engineering, procurement, and construction project worth Rs 157 crore from Karnataka government.
- Aditya Birla Idea Payments Bank has commenced operations.
- Great Eastern Shipping completed its sale of vessels.
- Adani Transmission received letter of intent for one inter-state transmission project in Rajasthan.
- JSW Group offers highest bid for Jaypee Infra, offering a little over Rs 9,900 crore to bank (Economic Times)
- Axis Bank asks CIO Amit Sethi to resign following whistleblower complaint. (Economic Times)
Bulk Deals
- Fortis Healthcare: Earc Trust SC 304 sold 36.93 lakh shares, or 0.7 percent equity, at Rs 147.42 each.
- Karnataka Bank: Macquarie Emerging Markets Asian Trading sold 17.48 lakh shares, or 0.6 percent equity, at Rs 128.72 each.
Indiabulls Real Estate
- UBS Principal Capital Asia bought 1.61 crore shares, or 3.4 percent equity, at Rs 211 each.
- Orient Global Cinnamon Capital sold 1.64 crore shares, or 3.5 percent equity, at Rs 211.01 each.
Who’s Meeting Whom
- Eicher Motors to meet Cartica Management on Feb. 23.
- KEC International to meet Kotak Securities on Feb. 26.
Insider Trades
- KCP Sugar & Industries promoter bought 30,000 shares from Feb. 19 to Feb. 20.
- Meghmani Organics’ promoter bought 10,000 shares on Feb. 16.
- Navneet Education promoter bought 20 lakh shares on Feb. 17.
- Apollo Tyres’ promoter bought 40,000 shares on Feb. 21.
- GE Shipping promoter bought 18,000 shares on Feb. 20.
- Om Metal Infraprojects’ promoter bought 49,900 shares on Feb. 21.
Rupee
- Rupee ended at Rs 65.05 per U.S. dollar versus Rs 64.77 per U.S. dollar on Wednesday, the lowest since Nov. 20, 2017.
Index Trends
X
Top Gainers And Losers
X
F&O Cues
- Nifty March Futures trading at 10,389, premium of 6 points versus 17 points.
- All series-Nifty Open Interest up 10 percent, Bank Nifty Open Interest unchanged.
- Rollover-Nifty Rollover at 62 percent, Bank Nifty at 65 percent.
- India VIX ended at 14.8, down 6.8 percent.
- Maximum Open Interest for March series at 11,000 call strike, Open Interest at 20 lakh, OI up 9 percent.
- Maximum Open Interest for March series at 10,000 Put, Open Interest at 27 lakh, up 10 percent.
F&O Ban
None.
Alert: Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of rollover of these intraday positions.
Put-Call Ratio
- Nifty PCR at 1.18 versus 1.17.
- Nifty Bank PCR at 0.89 versus 0.86.
Stocks Seeing High Open Interest Change
X
Fund Flows
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Brokerage Radar
Deutsche Bank on Siemens
- Maintained ‘Sell’ with price target of Rs 1,030.
- Mobility business separated just before potential uptick.
- It was a growing division with good prospects given Railways and Metro capex.
- Valuations look steep; Expect 26 percent compounded growth rate in net profit over the financial years through March 2020.
Goldman Sachs on Avenue Supermarts
- Maintained ‘Buy’; raised price target to Rs 1,672 from Rs 1,611.
- Expect Avenue to open 24,28 and 30 stores over the next three financial year.
- Lower SSSG estimates to 11.6 percent from 12.3 percent for the financial years between April 2019-March 2021.
- Higher number of stores will lead to some cannibalization.
Edelweiss on Prataap Snacks
- Increasing presence in South and west India and launch of new products to boost revenue.
- Planning to launch 5-6 products over the next three years in sweet snack.
- Sweet snack – relatively untapped and higher margin segment.
- Streamlining procurement process to protect raw material from market volatility.
- Targeting revenue to compound at 18‐20 percent over the next three years.
- Strategic location of plants, outsourcing bolster distribution network.
- Product mix to improve return on equity.
Jefferies on Federal Bank
- Maintained ‘Buy’ with price target of Rs 145.
- Acquisition augurs well with strategy of building up corporate & institutional banking team.
- Bank is significantly capitalized and can easily pay for this acquisition.
- Primary synergies lie in broadening product offerings to corporate & SME clients.
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