Asian stocks edged lower as traders look for any response to the barrage of tariff threats from the Trump administration in a speech from China President Xi Jinping, and U.S. political risks reemerge.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded flat at 10,387.50 as of 6:55 a.m.
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BQ Live
Here’s a quick look at all that could influence equities on Tuesday.
Global Cues
- The rally in U.S. stocks faltered in the final hour of trading, with a report that federal agents raided the offices of President Donald Trump’s lawyer adding to the swoon.
- The yield on 10-year Treasuries added one basis point to 2.7753 percent.
Europe Check
- European stocks ended the session little changed, trimming an earlier gain of as much as 0.6 percent, as a stronger euro weighed on exporters.
- The euro gained 0.3 percent to $1.2321.
- The British pound advanced 0.3 percent to $1.4132.
- Britain’s 10-year yield increased one basis point to 1.407 percent.
- Germany’s 10-year yield climbed one basis point to 0.504 percent.
Asian Cues
- Japan’s Topix index fell 0.4 percent as of 9:14 a.m. in Tokyo.
- Australia’s S&P/ASX 200 Index fell 0.2 percent.
- The Kospi index lost 0.8 percent.
- Futures on Hong Kong’s Hang Seng Index added 0.3 percent.
- Futures on the S&P 500 fell 0.1 percent.
Here are some key events for the remainder of this week:
- China’s Xi gives a keynote address at Boao Forum Tuesday.
- Facebook Inc. Chief Executive Officer Mark Zuckerberg testifies at two Congressional hearings Tuesday and Wednesday.
- U.S. CPI data and FOMC minutes due Wednesday.
- JPMorgan Chase & Co. and Citigroup Inc. report first-quarter earnings Friday.
- India car sales data for March
Commodity Cues
- West Texas Intermediate crude fell 0.3 percent to $63.25 a barrel after climbing 2.1 percent Monday.
- Brent traded 0.2 percent lower at $68.51 per barrel.
- Gold was little changed at $1,337.44 an ounce.
- Sugar ended higher at 12.4 cents per pound; up 0.2 percent.
Shanghai Exchange
- Steel traded higher for second day; up 2.1 percent.
- Aluminium traded higher for second day; up 1.1 percent.
- Zinc snapped three-day losing streak; up 0.3 percent.
- Copper snapped two-day losing streak; up 0.7 percent.
- Rubber traded higher for second day; up 0.4 percent.
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- Zuckerberg plans to tell U.S. Congress that all of Facebook’s problems are his own mistakes.
- Donald Trump's tactics on the negotiating table face their ultimate test with China.
- In charts: How Putin’s brinkmanship is scarring Russian markets.
Stocks To Watch
- Axis Bank board has accepted Shikha Sharma’s request to shorten her new three-year term till December 2018.
- Wipro said net income to see 65-75 basis points impact in fourth quarter as one of its client filed for insolvency.
- Max Financial approved submission of various fund raising proposal including from KKR, Stanchart, TPG.
- RBI allowed raising FPI limit in Future Supply Chain to 49 percent from 24 percent.
- Gravita India started commercial production of PPCP Granules at its Andhra Pradesh plant.
- HDFC raised Retail Prime Lending Rate (RPLR) by 20 basis points effective from April 1.
- Neuland Labs to issue 16.75 lakh equity shares via QIP; proceeds to be used for debt repayment and business growth.
- Dalmia said, it will fight against Binani in Supreme Court: Bloomberg.
Bulk Deals
- IRB Infrastructure Developers: Ascension Healthcare Master Pension Trust bought 18.62 lakh shares or 0.5 percent equity at Rs 243 each
- Suven Life Sciences: Canara Robeco MF sold 7.14 lakh shares or 0.6 percent equity at Rs 171.48 each.
ICICI Bank
- Merrill Lynch Marchkets Singapore Pte. Ltd bought 2.94 crore share 0.5 percent equity at Rs 280 each.
- Baillie Gifford Emerging Marchkets Fund sold 2.94 crore shares or 0.5 percent equity at Rs 280 each.
Lemon Tree Hotels
- Mirae Asset Asia Sector Leader Equity Fund bought 51.5 lakh shares at Rs 65.61 each.
- DB International Asia sold 44.62 lakh shares at Rs 62.07 each.
Indian ADRs
Trading Tweaks
- Powerhouse Gym & Wellness ex-date for 1:20 bonus
Who’s Meeting Whom?
- V2 Retail to meet Kitara Capital on April 10.
- Hikal Ltd to meet investors / analysts from April 10 – 11.
- Magma Fincorp to meet Investec on April 11 and Janchor on April 12.
- Purvankara to meet Sundaram AMC, West Bridge Capital, Goldman Sachs and Premji Invest on April 10.
- Ramco Cement to meet investors from April 11 – 13.
- Hind Rectifiers to meet IIFL Wealth on April 10.
- Bodal Chemicals to meet B&K Securities on April 11.
- Shriram City Union Finance to meet Maybank & Newton Investment on April 10.
- Royal Orchid Hotels to meet Bank of India AXA on April 10.
Insider Trades
- Nirlon Ltd promoter Shital Trading & Interiors sold 7,100 shares from March 12 – 22.
- Deepak Fertilizers promoter Nova Synthetic acquired 20,000 shares on April 4.
- S H Ke lakhar promoter Kedar Vaze sold 71,611 shares from April 4 – 6.
- Avadh Sugar promoters acquired 95,000 shares from April 5 – 6.
Rupee
- Rupee closed at 65.03/$ on Monday from 64.98/$ on Friday.
Top Gainers And Losers
Index Trends
F&O Cues
- Nifty April futures closed trading at 10,393.9 with a premium of 14.6 points from 27 points.
- April series: Nifty open interest up 2 percent, Bank Nifty open interest down 2 percent.
- India VIX ended at 14.8, up 0.8 percent.
- Max open interest for April series at 10,500 call strike (open interest at 39.6 lakh, up 6 percent).
- Max open interest for April series at 10,000 Put (open interest at 46.3 lakh, down 6 percent).
F&O Ban
In ban: Jet Airways.
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.
Put-Call Ratio
- Nifty PCR at 1.43 from 1.44.
- Nifty Bank PCR at 1.67 from 1.70.
Fund Flows
Brokerage Radar
Ventura on Raymond
- Initiated ‘Buy’ rating with a price target of Rs 1,535.
- Raymond’s performance now at an inflection point.
- Well thought out strategy to propel earnings.
- Expect revenue, operating income and net profit to compound atr 12 percent, 28 percent and 81 percent respectively by March 2020.
- High growth of branded apparel segment is the primary driver.
- Apparel market presents enormous growth opportunity.
- Turnaround of non-core assets to be further growth drivers.
- Firming of strategic monetisation plans on real estate business to lead to significant re-rating.
- Value the 125-acre Thane land at Rs 3,125 crore.
Credit Suisse on Hindalco
- Maintained ‘Outperform’ with a price target of Rs 310.
- Aluminium has bounced sharply from bottom, driven by news of sanctions on Rusal.
- Impact of these sanctions is unclear.
- Hindalco's EV/EBITDA multiples near six-year lows.
- May be some concerns on global growth given renewed.
- geopolitical tensions in Syria.
IIFL on Torrent Pharma
- Maintained ‘Buy’; raised price target to Rs 1,560 from Rs 1,400.
- No major acquisitions/capital raising planned.
- Initial trends from Unichem acquisition are in line with expectations.
- US continues to be one of the key focus markets.
- Torrent remains one of the top picks in sector, driven by its strong India business.
Deutsche Bank on India Real Estate
- Godrej Properties: Initiated ‘Buy’ with a price target of Rs 1,000.
- Oberoi Realty: Initiate ‘Buy’ with a price target of Rs 650.
- Real estate sector entering a structured growth phase.
- Worst of sector specific policy drags is behind.
- Cyclical recovery momentum is beginning to turn supportive.
- Improving demand-supply dynamics in commercial segment.
- Demand-supply dynamics gradually bottoming out in residential property market.
- Sector under-owned by domestic mutual funds which is beginning to reverse now.
- Valuations appear expensive as they reflect cyclical lows in activity momentum.
- Valuations do not price in potential cyclical acceleration.
IDFC Securities on IPCA Labs
- Maintained ‘Outperform’; raised price target to Rs 920 from Rs 753.
- Believe the worst is over for IPCA.
- Domestic formulations and branded formulation exports are normalizing.
- Global Fund institutional malaria sales to resume from the current quarter.
- Expect potential resolution of FDA issues by second half of the current financial year to drive growth
- Expect revenue, operating income and net profit to compound at 16 percent, 30 percent and 37 percent over the fiscal 2018-2021.
- IPCA is one of the preferred mid-cap stock.
IDFC Securities on Axis Bank
- Maintained ‘Neutral’ with a price target of Rs 605.
- Change in top management is positive in long run.
- New CEO would join when most of the clean-up is done.
- Expect short term pressure on asset quality and growth.
- Possibility of the stress loan pool rising over reported levels.
Macquarie on Axis Bank
- Maintained ‘Outperform’ with a price target of Rs 651.
- CEO to step down in December 2018.
- Management transition needs to now be managed well.
- Appointment of credible successor will be critical for bank’s performance.
- There may be significant challenges to growth and operations.
Edelweiss on Metals
- Aluminium gained 7 percent after U.S. imposed sanctions on Rusal.
- This adds to the alumina cost push post partial closure of Alunorte.
- Believe that both Vedanta and Hindalco are likely to benefit.
- Novelis might face cost pressures in near term.
- Supply disruption, alumina cost push and low inventory to render support to aluminium prices.
CLSA on Future Lifestyle
- Initiated ‘Buy’ with a price target of Rs 535.
- Future Lifestyle is an integrated play on premium and retailing.
- Brand Factory - Unique business model.
- Central focuses on premiumization.
- Brands business - Emerging option .
- Expect Brand Factory and Central revenue to compound at 31 percent and 18 percent respectively over the financial years till march 2021.
- Expect 22 percent compounded growth rate in operating income over 2018-2021.
- Balance sheet on an improving trajectory.
- Possibility of stake sale in investee brands to create .