All You Need To Know Going Into Trade On March 5

Asian equities started the week on a mixed footing as investors assessed the impact of American tariffs on the global economy and the euro fluctuated as vote counting began in the Italian election.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.6 percent to 10,374.50 as of 6:55 a.m.

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DayBreak

Here’s a quick look at all that could influence equities on Monday.

Global Cues

• U.S. stocks ended a volatile session higher on Friday, paring a weekly decline, as investors speculated that President Donald Trump’s tough tariff talk won’t translate into the most severe protectionist policies.

Europe Check

• European stocks fell to the lowest since February 2017 as President Trump invited a trade war after slapping tariffs on steel and aluminum imports to the U.S.

Asian Cues

• China kept its 2018 growth target of around 6.5 percent. The target was released Monday ahead of Premier Li Keqiang’s report to the National People’s Congress gathering in Beijing. The economy expanded 6.9 percent last year, though economists forecast a moderation to 6.5 percent this year.

Market Check

• The Topix index fell 0.4 percent and the Nikkei 225 Stock Average lost 0.5 percent.
• Australia’s S&P/ASX 200 Index fell 0.3 percent.
• Futures on Hong Kong’s Hang Seng Index slid 0.8 percent.
• S&P 500 futures contracts fell 0.1 percent.

Here are some key events coming up this week:

• Nikkei India services and composite PMI for February.
• The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.
• The Bank of Japan deputy governors’ confirmation hearings will be held Monday.
• Reserve Bank of Australia monetary policy decision on Tuesday, with GDP data due Wednesday.
• The European Central Bank isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing.
• Bank of Japan monetary policy decision and briefing on Friday.
• U.S. monthly payrolls data.

Commodity Cues

• Gold was little changed at $1,323.50 an ounce Friday.
• West Texas Intermediate crude rose 0.6 percent to $61.61 a barrel.
• Brent trades higher for second day at $64.8 per barrel; up 0.6 percent.
• Sugar snaps two-day winning streak, ends lower at 13.4 cents per pound; down 2 percent.

Shanghai Exchange

• Steel trades lower for second day; down 0.9 percent.
• Aluminium snaps three-day winning streak; down 0.5 percent.
• Zinc trades lower for fourth day; down 0.8 percent.
• Copper trades lower for sixth day; down 0.2 percent.
• Rubber trades higher; up 0.9 percent.

Indian ADRs

Stocks To Watch

• Hero MotoCorp February sales up 20 percent year-on-year to 6,29,597 units.
• TVS Motor February sales up 37 percent year-on-year to 2,90,673 units-.
• Power Tillers sales up 65 percent YoY to 2,525 units.
• Aurobindo Pharma received Form 483 from the U.S. FDA for its Unit IV with nine observations.
• Coal India’s coal production stood at 54.46 million tonne in February, while the coal offtake was 49.97 million tonne. It failed to achieve its set target.
• Manipal Health Enterprises set to buy Fortis Healthcare for Rs 6,500 crore, DNA report.
• NMDC cut lump ore prices by 3.2 percent, and fine prices by 3.62 percent.
• Wipro to acquire 33.33 percent stake in the U.S. based application security solution provider, Denim group for $8.8 million.
• Poly Medicure started commercial production at its Haryana plant.
• Punjab National Bank raised interest rates by 10-45 basis points on various tenures.
• Dilip Buildcon received Letter of Award by NHAI for two new hybrid annuity projects in Karnataka worth Rs 4,473 crore.
• JBM Auto board approved scheme of amalgamation of JBM Auto Systems and JBM MA Automotive with self.
• Laurus Labs said that the U.S.FDA completed inspection of its Unit 2 with zero observations under Form 483, and received maiden approval from the drug regulator for TDF tablets used in the treatment of HIV-1 infection.
• L&T Finance to consider issue price for preferential issue to L&T on March 7.
• HealthCare Global Enterprises entered into an agreement with promoter to buy a cancer care hospital for Rs 52 crore.
• Reliance Naval: According to RBI circular, company loans will be either classified as irregular or sub-standard.
• Fortis Healthcare gets notice from Serious Fraud Office seeking information and documents.

Bulk Deals

• Indian Terrain Fashions: Limiar Fund (Master) LP bought 6.50 lakh shares or 1.7 percent equity at Rs 202 each.

Trading Tweaks

• All Fortis Healthcare F&O contracts will expire on March 29.
• Venkys circuit filer revised to 10 percent.
• BEL buyback period between March 5-16.
• Balrampur Chini ex-date for determining buyback eligibility.

Who’s Meeting Whom

• PSP Projects to meet several fund houses including KGI Funds, Alliance Bernstein, Sumitomo Asset, etc on March 5 and March 6.
• Tata Motors to meet IDFC Mutual Fund, Evenstar Capital and Rare Enterprises from March 6 to March 8.
• Tribhovandas Bhimji Zaveri to meet HNI investors on March 5.
• Shriram City Union Finance to meet Buena Vista Fund Management on March 2.

Insider Trades

• Raymond Ltd. promoter J K Investors (Bombay) Ltd. acquired 25,000 shares on Feb. 28.
• Nahar Industrial Enterprises promoter Cotton County Retail Ltd. acquired 11,080 shares from Feb. 24 to Feb. 28.
• Kitex Garments promoter Sabu Jacob acquired 82,754 shares on March 1.
• Confidence petroleum promoter Essenn LPG Bottling (India) Ltd acquired 1.44 lakh shares on Feb. 28.
• Alembic Pharma promoter Alembic Ltd. acquired 1.18 lakh shares from Feb. 27 to Feb. 28.
• Vishal Fabrics promoter Vedprakash D Chiripal acquired 58,000 shares from Feb. 27 to Feb. 28.

Rupee

• Rupee ended at Rs 65.17 per U.S. Dollar versus Rs 65.18 per U.S. Dollar on Wednesday.

Index Trends

Top Gainers And Losers

F&O Cues

• Nifty March Futures closed trading at 10,456.5, discount of 1.4 points.
• All series-Nifty Open Interest up 5 percent, Bank Nifty Open Interest down 2 percent.
• India VIX ended at 14.07, up 1.9 percent.
• Maximum Open Interest for March series at 10,800 call strike, Open Interest at 44.2 lakh, up 54 percent.
• Maximum Open Interest for March series at 10,400 Put, Open Interest at 36.7 lakh, down 1 percent.

F&O Ban

• Fortis Healthcare
• HDIL
• IDBI Bank
• Oriental Bank of Commerce

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 1.28 versus 1.37
• Nifty Bank PCR at 0.91 versus 0.90

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Edelweiss on Fortis Healthcare

• Maintained ‘Buy’; cut price target to Rs 180 from Rs 230.
• Earnings under pressure; Quality of business remains intact.
• Fortis can unlock significant value by demerging SRL.
• SRL valued at 30 percent of consolidated enterprise value.
• Expect revenue and Ebitdac to compound at 16 percent and 23 percent respectively over the fiscal 2018-2020.
• Expect free cash flow generation from April to drive re‐rating.

JPMorgan on Axis Bank

• Maintained ‘Overweight’; cut price target to Rs 650 from Rs 700.
• Price target cut to capture impact of new RBI provisioning guidelines and front-end the legacy provisioning to the current fiscal.
• This clean-up to act as a near-term headwind for stock.
• Core pre-provisioning operating profit momentum to resume from April.
• Refinancing of NCLT cases to represent an opportunity to jumpstart loan growth.
• Axis remains top pick among value stocks.

Morgan Stanley on Coal India

• Maintained ‘Underweight’ with price target of Rs 221.
• Production was flat and dispatches moderated in Feb. 18.
• Expect growth rates to remain moderate.
• Higher costs to constrain earnings and dividend payouts.

Jefferies on Voltas

• Maintained ‘Buy’ with price target of Rs 795.
• Dealer interactions indicate AC pricing normalised post discounts in December 2017.
• Weather linked demand is yet to reflect in volumes.
• Rating changes see smooth implementation.
• Voltas to benefit from summer onset in current and next fiscal from low GST base.
• Remain positive on Voltas.

Nomura on Dr Reddy’s Laboratories

• Maintained ‘Buy’ with price target of Rs 3,238.
• Expects to file proprietary migraine drug in next three months under 505b(2) route.
• Company guides of $100-300 million from the product.
• Dr Reddy’s is play on potential of complex generic and specialty opportunities in U.S.

Nomura on KNR Construction

• Maintained ‘Buy’ with price target of Rs 383.
• Order win of Rs 1,020 crore revives momentum.
• Potentially another order worth Rs 1,380 crore in pipeline.
• Some of L1 positions may witness delays in confirmation and spill over to next quarter
• Order largely addresses investor concerns on orderbook depletion.

Nomura on Dilip Buildcon

• Maintained ‘Buy’ with price target of Rs 1,265.
• Recent series of order wins exceed top end of its order inflow guidance for the current fiscal.
• Dilip has secured more recent EPC contracts at aggressive bids.
• HAM project bids seems competitive.
• Overall bidding appearing reasonable.
• Do not expect Dilip to face major hurdles in financial closure of new HAM projects.