Stocks were steady in Australia and South Korea with subdued trading in the U.S. carrying over into Asia. Japan and U.S. markets are closed Thursday for a holiday, while South Korean markets open later than usual due to school exams.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.10 percent to 10,364 as of 6:55 a.m.
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DayBreak
Here’s a quick look at all that could influence equities on Thursday.
Global Cues
- U.S. stocks ended the day lower, after minutes from the latest Federal Reserve meeting indicated that officials expect inflation to remain persistently low even as support for an interest-rate increase grows.
- The Bloomberg dollar spot index fell to the lowest level since October.
Europe Check
- The euro gained as efforts continued to end Germany’s political impasse.
- The Stoxx Europe 600 Index fell 0.3 percent.
- The U.K.’s FTSE 100 Index gained 0.1 percent.
- Germany’s DAX Index fell 1.2 percent, its biggest drop in almost two weeks.
Asian Cues
- Australia’s S&P/ASX 200 Index fell less than 0.1 percent and South Korea’s Kospi index added 0.2 percent.
- Futures on Hong Kong’s Hang Seng Index were little changed.
- Contracts on the S&P 500 Index were flat. The underlying gauge fell 0.1 percent.
- The MSCI Asia Pacific Ex Japan Index rose 0.2 percent.
Here are some key events coming up this week:
- Minutes from the European Central Bank’s October meeting due on Thursday could show dissent in the discussion about tapering.
- In Asia, Singapore will probably say on Thursday its economy expanded more than initially estimated in the third quarter, the consensus shows. October CPI is also due.
- New Zealand October trade and South Korea November consumer confidence are due Friday.
Commodity Cues
- West Texas Intermediate crude rose was steady at $58.02 a barrel, its highest since mid-2015, as U.S. crude stockpiles declined.
- Gold was little changed at $1,291.02 an ounce.
Indian ADRs
Earnings To Watch
- Alkyl Amines
- Kesar Terminals
- Monsanto
- Siemens
- Skipper
Earnings Reaction To Watch
De Nora (Q2, YoY)
- Revenue down 52 percent at Rs 4.3 crore.
- Net loss of Rs 1 crore.
- EBITDA loss at Rs 0.9 crore.
- Margin at -20.9 percent.
Garware Wall Ropes (Q2, YoY)
- Revenue down 9 percent at Rs 206 crore.
- Net profit up 8 percent at Rs 28 crore.
- EBITDA up 9 percent at Rs 43 crore.
- Margin at 20.9 percent from 17.5 percent.
SIS India (Q2, YoY)
- Revenue up 35.7 percent at Rs 1,460 crore.
- Net profit up 318.4 percent at Rs 59 crore.
- EBITDA up 51.3 percent at Rs 74 crore.
- Margin at 5.1 percent from 4.6 percent.
Stocks To Watch
- Arrow Greentech secured patent for manufacturing embedded water soluble film carrier in U.S.
- Healthcare Global Enterprises will issue 11.66 lakh shares at Rs 300 each on a preferential basis to Indgrowth Capital Fund 1 (AIF).
- Thomas Cook will sell up to 75 lakh shares (5.4 percent) in Quess Corp via an offer for sale, at Rs 800 per share, on Nov. 23-24.
- Lasa Supergenerics to begin trial production at its Unit IV from Nov. 25.
- Manaksia Steels to acquire Far East Steel Industries, Nigeria
- Tata Teleservices mobile customers to start transitioning to Bharti Airtel’s network.
- IL&FS acquired an additional 49 percent stake in subsidiary IL&FS Asian Infrastructure Managers from ORIX Corporation, Japan for Rs 2.77 crore.
- Info Edge India: Zomato completed acquisition of on demand logistics and delivery company “Runnr”. Info Edge holds 44.74 percent in Zomato.
- Karur Vysya Bank allots 11.7 crore shares via rights issue.
- Sun Pharma stake in ScPharmaceuticals reduces to 12.31 percent from 14.58 percent after latter's IPO.
- Tata Motors: Jaguar to recall 7,000 sedan and SUVs with faulty electronics.
- Eicher launched CV variants for the e-commerce industry.
- RCom’s land in Mumbai gets 8 bidders; eyes 125 acres to raise funds, cut Rs 47,000 crore debt (Times of India)
Trading Tweaks
- RattanIndia Power circuit filter revised to 10 percent.
- Emami Infra circuit filter revised to 5 percent.
- VRL Logistics to buyback shares worth Rs 41.4 crore at maximum Rs 460 per share.
- Manaksia Industries’ name changed to BKM Industries.
- BFL Developers’ name changed to BFL Asset Finvest.
Bulk Deals
- Thyrocare: Samara Capital sold 7.40 lakh shares or 1.4 percent equity stake at Rs 668.18 each.
- Videocon: IFCI sold 22.50 lakh shares or 0.8 percent equity stake at Rs 12.82 each.
- GATI: Green India Venture Fund sold 18.7 lakh shares or 1.7 percent equity stake at Rs 127.39 each.
- Excel Realty N Infra: Aspire Emerging Fund bought 3.60 lakh shares or 1.1 percent equity stake at Rs 121.5 each.
- Secure Credentials: Kalyani Saraf bought 48,000 shares at Rs 245 each.
Rupee
Rupee closed at 64.92/$ on Wednesday from 64.89/$ on Tuesday.
Top Gainers And Losers
Index Trends
F&O Cues
- Nifty November futures closed at 10,358, premium of 15.9 points from 25 points.
- November contracts: Nifty open interest down 2 percent, Bank Nifty open interest down 2 percent.
- India VIX closed 2.3 percent higher at 14.
- Max open interest for Nov. series at 10,500 Call (open interest at 61.3 lakhs).
- Max open interest for Nov. series at 10,300 Put (open interest at 54.3 lakh, up 1 percent).
F&O Ban
- In ban: DHFL, DLF, HDIL, Indocount, Infibeam, Jain Irrigation, JP Associates, JSW Energy, Just Dial, Reliance Communications, TV 18 Broadcast, and Wockhardt.
- Out of ban: Kaveri Seed and Reliance Capital.
Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.
Put-Call Ratio
- Nifty PCR at 1.32 from 1.30.
- Nifty Bank PCR at 0.94 from 1.07.
Stocks Seeing High Open Interest Change
Fund Flows
Brokerage Radar
Motilal Oswal on PC Jeweller
- Initiated ‘Buy’ with a price target of Rs 490; implying a potential upside of of 36 percent from the current market price.
- Enormous opportunity in Indian jewellery led by migration towards organised players.
- Large nation-wide chains to leverage this shift.
- Expect Revenue, Operating income and net profit to grow at a compound annual growth rate of 21 percent, 24 percent and 30 percent respectively over the next three years.
- Return on capital employed to improve to 19.5 percent by March 2020.
- Return on equity to improve to 19 percent by March 2020.
- Positives: increasing store-level sales and profitability and higher use of franchisees to make the business asset-light
- Bull Case price target of Rs 550: Expect revenue and net profit to grow at a compound annual growth rate of 23 percent and 36 percent respectively over till March 2020.
UBS on Aegis Logistics
- Initiated ‘Buy’ with price target of Rs 280; implying a potential upside of 20 percent from yesterday’s close.
- Aegis to benefit from surge in LPG demand and growing dependence on imported LPG.
- Expect LPG demand to record an 11 percent compound annual growth rate and imports a 16 percent compound annual growth rate for the financial years till March 2022.
- Positives: upcoming terminals, weak competition and LPG pipelines being developed by OMCs.
- Land parcels at key ports could be used for two LPG terminals.
- Expect terminalling market share of imported LPG to increase to 28 percent by march 2021.
- Expect operating income and net profit to grow at a compound annual growth rate of 40 percent and 42 percent over the financial years till March 2020.
- Expect return on capital employed and return on equity to improve to 54 percent and 32 percent by March 2021.
CLSA on Kansai Nerolac
- Initiated ‘Buy’ with price target of Rs 600; implying a potential upside of 24 percent from yesterday’s close.
- High leverage to capex revival augurs well at this point for Kansai.
- Margins to sustain though input prices are on an uptrend.
- Price hikes, improvement in revenue mix and operating leverage to sustain margins.
- Expect revenue to grow at a compound annual growth rate of 16 percent till March 2019. Earnings per share to grow at a compound annual growth rate of 17 percent till March 2020.
- With just 12 percent market share, there is potential to drive market share gains.
- View high valuations with long term opportunity, strong balance sheet and high governance levels.
HSBC on Future Retail
- Maintained ‘Buy’; hiked price target to Rs 730 from Rs 590.
- Unveils aggressive growth strategy and digital future.
- With disciplined execution, Future Retail could unlock a virtuous creation journey.
- Scale is key competitive advantage and Future can improve its cost economics as it accelerates revenue growth.
- Expect earnings to grow at a compound annual growth rate of 30 percent over by March 2020, driven by operating leverage and store rollout
- Current share price builds in earnings to grow at a compound annual growth rate of 14 percent for 15 years post March 2020.