Stocks in Asia opened mixed Wednesday as a global rally in risk assets that sent U.S. equities to three-months highs stalled amid a backdrop of protectionism and geopolitical issues.
Equities were little changed in Japan and rose in Australia, while South Korean markets were closed for a holiday.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,586.5 as of 9 a.m.
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BQ Live
Here’s a quick look at all that could influence equities today.
U.S. Market Check
- The global rally in risk assets that sent U.S. stocks to a 12-week high sputtered on Tuesday, with the S&P 500 swinging between gains and losses before closing higher for a third consecutive day.
- The yield on 10-year Treasuries fell two basis points to 2.91 percent.
Europe Market Check
- European shares reversed earlier gains to post a decline as concerns including the new Italian government continued to cloud the equity outlook.
X
- The euro rose 0.1 percent to $1.1714.
- The British pound gained 0.6 percent to $1.3388.
- Italian 10-year yields surged 25 basis points to 2.79 percent.
Asian Cues
- Topix index was little changed.
- S&P/ASX 200 Index rose 0.5 percent.
- Hang Seng Index futures fell 0.2 percent.
- S&P 500 Index futures were flat.
Commodity Cues
- Brent crude traded flat at $75.33 a barrel.
- West Texas Intermediate crude increased 0.2 percent to $65.66 a barrel.
- Gold rose 0.1 percent to $1,297.37 an ounce.
- Aluminium ended 0.4 percent lower at $2,316.75 per MT.
Fuel Price Update
- Petrol and diesel prices were cut by 11 paise and 8 paise respectively today. Petrol now costs Rs 85.54 in Mumbai and diesel costs Rs 73.25, according to the data available on Indian Oil Corporation Ltd.’s website.
Stories You Might’ve Missed
- Indian government has a new, new power sector resolution plan: Here’s how it is expected to work.
- U.S. quietly asked Saudi and some other OPEC producers to increase output by about 1 million barrels a day.
- Billionaire David Koch is stepping down from the family’s business and conservative political empire.
- Janitors are becoming millionaires thanks to this stock’s 9,500 percent rally
- LeBron is a player... in U.S.-China trade thanks to NBA deals
- The Subaru set can’t buy a battery-powered version of its favorite car, but they’re not bothered.
- Trump cannot pardon himself, the U.S. justice department said it is unconstitutional.
- Just like air travel, now beware of carrying excess luggage while travelling in trains as well. Here’s why.
Here are some key events coming up this week:
- U.S. trade balance and Australia GDP also out on Wednesday.
- On Thursday, Japanese Prime Minister Shinzo Abe meets with U.S. President Trump at the White House to discuss the planned U.S. summit with North Korea’s Kim Jong Un.
- Also on Thursday, euro-zone GDP.
- Turkey rate decision is due on Thursday.
- G-7 Leaders’ Summit starts in Quebec Friday through to June 9.
RBI Decision-Day Guide
The Reserve Bank of India is expected to keep interest rates on hold today, but what’s more important is the accompanying statement that could give a signal to investors on future tightening as inflationary pressures rise.
Key taking points:
- The rate debate: Will the MPC be as divided as the economists?
- Monetary policy tightening: When and how much?
- How to manage conflicting choices and puzzling signals
- Advice from ex-Governor Raghuram Rajan
- Elevated borrowing costs may rise further if RBI hikes rates
Stocks To Watch
- Ram Vilas Paswan says cabinet will consider up to Rs 8,000 crore package for the sugar industry
- NMDC’s March-May iron ore output and sales at 4.53 million tonnes.
- United Spirits receives shareholders’ approval for 5:1 stock split.
- Mcleod Russel to sell certain tea estates of the company in Assam to M.K. Shah Exports for Rs 331 crore.
- ADF Foods to buyback 10 lakh equity shares (4.71 percent equity) at Rs 300 each.
- Kirloskar Oil Engines to hike prices of power generator sets by 5-8 percent due to rising raw material costs.
- Infosys Finacle banking solutions gets Bank Sohar Deal.
- Nalco sets a capex target of Rs 1,100 crore for 2018-19.
Bharat Forge, Ramkrishna Forgings and GNA Axles in focus as North American Class 8 truck orders for May double over last year
- North America Class 8 truck orders for May 35,200 units versus 16,419 units last year, up 114 percent.
- North America Class 8 truck orders for May 35,200 units vs 34,700 units last month, up 1.5 percent.
(Source: FTR)
Indian ADRs
X
Bulk Deals
- HCL Technologies: Promoter Vama Sundari Investments (Delhi) Pvt. Ltd bought 75 lakh shares or 0.5 percent equity at Rs 900 each.
- IEX: Morgan Stanley Mauritius Company Limited sold 1.78 lakh shares or 0.6 percent equity at Rs 1,595 each.
- Lakshmi Vilas Bank: India Infoline Investment Services Limited bought 1.05 crore shares or 4.1 percent equity at Rs 100.1 each.
- Career Point: KIFS Enterprise sold 1 lakh shares or 0.6 percent equity at Rs 102.64 each.
- Indiabulls Real Estate: Indiabulls Real Estate Ltd bought 27 lakh shares or 0.6 percent equity at Rs 175.58 each.
Who’s Meeting Whom
- Tata Global Beverages to meet several fund houses including Morgan Stanley, Goldman Sachs, Sundaram AMC etc on June 6.
- Cipla to meet several fund houses including Oaktree Capital Mgmt, Arohi Asset Mgmt etc from June 6 – 8.
- UFO Moviez to meet Paradise Investment Management and others on June 6 and 7.
Insider Trades
- Centrum Capital promoter BG Advisory Services LLP acquired 1.83 lakh shares on June 1.
- Trident Ltd promoter Trident Corp Ltd. acquired 15,789 shares on June 4.
- Alembic Pharma promoter Alembic Ltd acquired 15,000 shares from June 1–5.
- Trident Ltd. promoter group Trident Corp Ltd acquired 15,700 shares on June 4.
- Laurus Labs promoter Dr. Satyanarayana Chava acquired 49,448 shares on May 30.
(As reported on June 5)
Trading Tweaks
- HDFC Bank and Indusind Bank FII window open.
- Godawari Power & Ispat placed under additional surveillance measure by BSE.
- Viaan Industries, Fiberweb and Chartered Logistics circuit filter revised to 10 percent.
- Gruh Finance ex-date for 1:1 bonus.
- Akzo Nobel ex-date to determine buyback eligibility.
- Lumax Auto Technologies last trading day before ex-date for stock split.
Money Market Check
- Rupee closed at 67.15/$ on Tuesday from 67.11/$ on Monday.
F&O Cues
- Nifty June Futures closed trading at 10,596.4, a premium of 3.3 points versus discount of 29.8 points.
- June series-Nifty open interest up 0.6 percent & Bank Nifty open interest down 5 percent.
- India VIX ended 13.3, down 4 percent.
- Max open interest for June series at 11,000 Call, open interest at 45.6 lakh, open interest up 15 percent.
- Max open interest for June series at 10,200 Put, open interest at 35.5 lakh, open interest up 1 percent.
F&O Ban
- In ban: Dewan Housing
- New in ban: Dewan Housing
Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.
Active Stock Futures
X
Put-Call Ratio
- Nifty PCR at 1.33 versus 1.39.
- Nifty Bank PCR at 0.56 versus 0.60.
Fund Flows
X
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Brokerage Radar
Morgan Stanley on Reliance Industries
- Maintained ‘Overweight’ with a price target of Rs 1,241.
- IMO regulation and ramp-up of petcoke gasifiers to add to higher margins.
- Expect $3/bbl rise in GRMs due to the above levers.
- Retail pump station expansion should also support growth.
- Most of the telecom capex done; Company aims to achieve 99 percent coverage by end of 2018.
Morgan Stanley on Godrej Consumer
- Maintained ‘Overweight’ with a price target of Rs 1,350
- Strong growth outlook for 2018-19.
- Gradual improvement in demand currently underway in India
- In Indonesia plan to seek growth by increasing distribution.
- In Africa, Godrej expects to benefit from local manufacturing.
Citi on JSPL
- Maintained ‘Buy’ with a price target of Rs 401
- Steel business is doing well in the current quarter
- Angul plant ramping up fast; DRI plant to start in July 2018.
- Coal supply situation has improved; Co. looking to sign short-term PPAs.
- Valuation with improving cash flows and EBITDA appear quite attractive.
Jefferies on HEG and Graphite India
- HEG: Maintained ‘Buy’ with a price target of Rs 4,400.
- Graphite: Maintained ‘Buy’ with a price target of Rs 1,275.
- Demand supply tightness continues leading to higher realisations.
- New contracts signed at higher prices hinting strong current quarter.
- Remain positive on graphite electrode sector.
- HEG and Graphite trading at cheap valuations providing good buying opportunity.
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