All You Need To Know Going Into Trade On Feb. 23

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.

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

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.

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

Top Gainers And Losers

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

Fund Flows

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.