All You Need To Know Going Into Trade On March 13
Asian equity traders adopted a cautious tone Tuesday following a dip in U.S. stocks, with focus turning to a U.S. inflation report for clues on the pace of Federal Reserve policy tightening.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 10,419 as of 7:15 a.m.
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Here’s a quick look at all that could influence equities on Tuesday.
- U.S. stocks finished the day lower as uncertainty over the prospect of tariffs undid some of the market’s recent job-driven advances and investors looked forward to Tuesday’s U.S. inflation report.
- The U.S. 10-year yield held at 2.87 percent after Monday’s Treasury auction was broadly in line with expectations.
- European stocks advanced for a sixth session, the longest streak of gains since October, as a rally in utilities offset losses in industrial shares.
- Japan’s Topix index slid 0.5 percent.
- South Korea’s Kospi index was flat.
- Australia’s S&P/ASX 200 Index declined 0.3 percent.
- Futures on Hong Kong’s Hang Seng Index lost 0.4 percent.
- S&P 500 Index futures fell less than 0.1 percent.
Here are some of the key things happening this week:
- China data on industrial production, retail sales and fixed-asset investment all out on Wednesday are likely to point to slower growth, according to Bloomberg Economics forecasts.
- Key indicators for the Fed dominate the economic agenda in the coming week. Headline inflation may have edged up to 2.2 percent in February from 2.1 percent, though consensus before Tuesday’s report is for core inflation to remain at 1.8 percent.
- Prices and factory output are focal points in the euro area. Friday’s second inflation report for February may touch 1.2 percent from 1.1 percent the previous month.
- Also this week, Germany’s Angela Merkel is inaugurated to a fourth term, EU27 government officials discuss the European Union’s Brexit position, and U.K. Chancellor of the Exchequer Philip Hammond issues his spring statement.
- West Texas Intermediate crude held onto losses after decreasing 1.1 percent to trade at $61.28 a barrel.
- Brent traded lower for second day at $64.82 per barrel; down 0.2 percent.
- Gold rose 0.1 percent to $1,324.62 an ounce.
- Sugar ended higher at 12.93 cents per pound; up 0.7 percent.
- Steel snapped seven-day losing streak; up 0.1 percent.
- Aluminium traded lower for fifth day; down 1.5 percent.
- Zinc traded 0.3 percent lower.
- Copper 02 percent lower.
- Rubber 0.3 percent higher.
Stocks To Watch
- Tata Sons to sell 28.3 million TCS shares at Rs 2,872–2,925 per share: Bloomberg
- Infosys to voluntarily delist American Depositary Shares from some Euronext exchanges and Euronext London Exchanges.
- NBCC says no charges proved against chairman Mittal after CBI Probe.
- Power Grid enters into term loan facility agreement with State Bank of India worth Rs 5,000 crore.
- Andhra Bank says exposure to Sterling group of companies at Rs 1,147 crore.
- JSPL board to meet on March 16 to consider QIP.
- Aviation stocks: Government grounds Airbus A320neo planes with new Pratt & Whitney engines.
Earnings Reaction To Watch
Shree Renuka Sugars Q3 (YoY)
- Revenue down 13.84 percent at Rs 1,758.8 crore.
- Net loss at Rs 2,267 crore.
- EBITDA down 0.82 percent at Rs 60 crore.
- Margin at 3.41 percent from 2.96 percent.
- Exceptional loss of Rs 2,410 crore.
- Rs 2,087 crore of investment and debt restructured
- Shankara: Amansa Holdings bought 3.6 lakh shares at price of Rs 1,755 per share.
- Videocon Industries shifted to Z group.
- Omkar Speciality Chemicals circuit filter revised to 5 percent.
Who’s Meeting Whom
- Crompton Greaves Consumer to meet Axis MF, Reliance MF, Kotak MF, Birla Sun Life Insurance and others on March 13.
- IIFL to meet New Vernon Capital LLC on March 13.
- FIEM Industries to meet Kitara Capital on March 13.
- PI Industries to meet Mawer Investment on March 13, UBS AMC on March 14.
- Ajay Rajnikant Shah promoter of Organic Coatings bought 1 lakh shares on March 8.
- Mukesh Sangla promoter of Signet Industries bought 5.35 lakh shares on March 9.
- Promoter of Sarda Energy and Minerals bought 10,000 shares on March 8.
- State-owned Bharat Dynamics will open its initial public offer for subscription, with a price band of Rs 413-428 per share. (Here’s an all you need to know)
- Rupee closed 65.04/$ on Monday from 65.17/$ on Friday.
Top Gainers And Losers
- Nifty March Futures closed trading at 10,432.8 premium of 11.4 points versus discount of 10.3 points.
- March series: Nifty open interest down 1 percent, Bank Nifty open interest up 4 percent.
- India VIX ended at 14.4, down 0.2 percent.
- Max open interest for March series at 10,600 call strike (open interest at 51.7 lakh, up 41 percent).
- Max open interest for March series at 10,000 put (open interest at 53.8 lakh, up 10 percent).
- In ban: Andhra Bank, Balrampur Chini, BEML, Dewan Housing, IDBI, JP Associates
- New in ban: Andhra Bank, BEML
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.
- Nifty PCR at 1.26 versus 1.14.
- Nifty Bank PCR at 1.15 versus 0.81.
Stocks Seeing High Open Interest Change
Credit Suisse on NIIT Technologies
- Maintained ‘Outperform’; hiked price target to Rs 1,050 from Rs 850.
- Smaller companies are relatively better positioned.
- Sharper focus on sub-segments.
- More focus on top clients.
- Stock has done well but valuations are not stretched.
- Revenue is growing ahead of industry and margins are expanding slightly.
Macquarie on Info Edge
- Maintained ‘Neutral’ with price target of Rs 1,300.
- Expect company to steadily increase shareholder payout.
- Expect dividend per share for the next two financial years at Rs 8 and Rs10 respectively.
- Remain confident on ability to maintain market share.
- Cautious over growth outlook due to a slowdown in IT hiring and real estate market.
- With increasing cash pile effective utilisation of cash is vital.
Citi on BHEL
- Maintain Sell with a price target of Rs 83.
- Strong inflows in current fiscal. However, outlook continues to be weak.
- L1 pipeline has weakened YoY.
- December quarter was disappointing.
- Solar taking a toll on coal.
Motilal Oswal on Future Consumer
- Initiated ‘Buy’ with price target of Rs 76.
- Best play on huge window of opportunity for brands using modern retail.
- Best placed among Future Group companies.
- Improving mix and operating leverage expected to drive significant margin expansion.
- Likely to be profitable at consolidated net level only in the next fiscal.
- Growing rapidly via distribution network and portfolio expansion.
- Expect revenue and operating income to compound at 39 percent and 147 percent respectively over the fiscal 2017-2022.
- Attractive opportunity from a three-year perspective as well.
IIFL on PNB Housing Finance
- Maintain ‘Buy’; cut price target to Rs 1,360 from Rs 1,700.
- Overhang: increasing interest rates.
- Overhang: prospects of stake sale by key shareholders.
- Overhang: expectation of potential impact on credit rating.
- Higher interest rates would lead to margin compression.
- Expect AUM to compound at 42 percent over the fiscal 2018-2020. Expect AUM to drive superior revenue growth and operating leverage.
- Remain constructive on the stock.
Morgan Stanley on Insurance
- Private insurers posted 11 percent YoY growth in February.
- HDFC Life and SBI Life grew 22 percent and 18 percent YoY respectively; ICICI Pru declined 16 percent YoY.
- Expect private sector premiums to rise in mid-teens over the next couple of year.
IIFL on Future Retail
- Multiple tailwinds to support operating income growth
- Expect revenue and operating income to compound at 17 percent and 31 percent respectively over the fiscal 2018-2020.
- Expect same-store sales strength to sustain in Big Bazaar format.
- Hypercity turnaround to aid performance.
- Expect value positioning to sustain strong growth in FBB format.
- Balance sheet improvement should continue.