All You Need To Know Going Into Trade On March 16

This week’s rally in Asian stocks petered out on Friday as weak volumes in the U.S. session overnight gave little impetus for traders ahead of next week’s Federal Reserve meeting.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.4 percent to 10,319.50 as of 7:05 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 ended mixed Thursday, as industrial and tech gains were offset by losses in the consumer and energy sector.
• Ten-year Treasury yields steadied after briefly sinking below 2.80 percent as traders look forward to next week’s Federal Reserve policy decision.

Europe Check

• European stocks advanced for the second time this week as gains in insurance firms offset losses in oil and gas companies.

Asian Cues

• Japan’s Topix index slipped 0.2 percent.
• Australia’s S&P/ASX 200 Index gained 0.2 percent.
• Futures on Hong Kong’s Hang Seng Index slid 0.1 percent.
• Futures on the S&P 500 Index were little changed after the underlying gauge on Thursday fell 0.1 percent, bringing this week’s loss to 1.4 percent.

Here are some of the key things happening this week:

• Revised Japanese industrial production data are out on Friday.
• EU27 government officials discuss the European Union’s Brexit position.

Commodity Cues

• West Texas Intermediate crude climbed 0.1 percent to $61.24 a barrel.
• Brent traded steady at $65.11 per barrel.
• Gold was steady at $1,316.40 an ounce after falling 0.7 percent on Thursday.
• Sugar ended lower at 12.7 cents per pound; down 0.2 percent.

Shanghai Exchange

• Steel trades lower; down 0.5 percent.
• Aluminium trades marginally higher; up 0.04 percent.
• Zinc trades higher; up 0.1 percent.
• Copper snaps two-day winning streak; down 0.8 percent.
• Rubber trades lower; down 0.4 percent.

Indian ADRs

Stocks To Watch

• Yes Bank sells 1.12 crore shares or 2.17 percent stake in Fortis Healthcare on March 15.
• Bharat Financial Inclusion completes third securitization transaction in FY18 for Rs 451 crore.
• NCLT approves Brigade Enterprises’ scheme of arrangement.
• Future Consumer Signs 50:50 joint venture pact with Bin Ablan Group.
• Puravankara unit to invest Rs 500 crore for Goa Housing Project.
• SpiceJet to shift 22 domestic flights to Delhi International Terminal 2.
• Wipro invests $2.02 million to acquire 20 percent stake in Avaamo Inc.
• IDFC Bank’s board approves scheme of amalgamation with Capital First.
• Adani Transmission acquires 100 percent stake in Fatehgarh-Bhadla Transmission SPV from PFC Consulting.
• PFC sais that Rs 17,000 crore or about 6 percent of loans of private power assets poses risk of NPL classification and likely haircuts (Concall).

Bulk Deals

• JP Associates: Rare Enterprises bought 3 crore shares at Rs 18.37 apiece.
• Jaypee Infratech: Indusind Bank Client A/C sold 1.3 crore shares at Rs 10.12 apiece.
• Arvind: Nordea Fund sold 24.7 lakh shares at Rs 400.03 apiece.
• Indian Hotels: Tata Sons bought 7.9 crore shares at Rs 130.4 apiece; Ratan Tata Trust, Dorabji Tata Trust and Tata Memorial Trust sellers.

Bajaj Electricals

• Bajaj Trading Company sold 25.4 lakh shares at Rs 625 apiece.
• Rahulkumar Bajaj bought 12.7 lakh shares at Rs 625 apiece.

Who’s Meeting Whom?

• Container Corp to meet White Oak Capital on March 16.
• PI Inds to meet MOSL, Kotak MF and Kotak Sec between March 20 - 26.
• Dr Lal Pathlabs to meet Hillhouse Capital on March 16.

Insider Trades

• Kalyani Steel’s promoters Sundaram Trading acquires 4,00,000 shares on March 13.
• Vardhman Special Steels’ promoter Sachit Jain acquires 26,697 equity shares on March 12 & 13.
• Alembic Pharmaceuticals’ promoter, Alembic acquires 5,953 equity shares on March 13.
• Shakti Pumps’ promoter group, Vintex Tools 10,194 equity shares on March 14.
• Bajaj Finserv’s promoter, Shekhar Bajaj sold 58,960 shares on March 13.
• UPL’s promoters Shilpa P Sagar sold 22,107 equity shares on March 13.

IPO Watch

• Bharat Dynamics IPO subscribed 1.3 times on final day.
• Bandhan Bank IPO IPO continues on day 2. The issue is subscribed 0.4 times.
• Hindustan Aeronautics IPO opens at an issue price of Rs 1,215- 1,240 apiece.
• Karda Construction IPO opens at an issue price of Rs 175- 180 apiece.

Trading Tweaks

• Coal India ex-date for interim dividend of Rs 16.5 per share.
• KPR Mill buy back period from March 16- April 2.
• Future Market Networks circuit filter revised to 10 percent.

Rupee

• Rupee closed at 64.93/$ on Thursday from 64.84/$ on Wednesday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty March Futures closed trading at 10,372 premium of 12 points versus 14.4 points.
• March series: Nifty open interest up 3 percent, Bank Nifty open interest down 5 percent.
• India VIX ended at 14.3, down 0.2 percent.
• Max open interest for March series at 10,500 call strike (open interest at 50.9 lakh, up 13 percent).
• Max open interest for March series at 10,000 Put (open interest at 46.3 lakh, down 6 percent).

F&O Ban

• In ban: Balrampur Chini, Bank of India, BEML, DHFL, TV18 Broadcast
• Out of ban: Andhra Bank, IDBI, JP Associates

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 1.23 versus 1.26.
• Nifty Bank PCR at 0.92 versus 1.18.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Citi on Dish TV

• Maintained ‘Buy’ with price target of Rs 90.
• Merger effective around March 22.
• New shares to commence trading early April.
• Videocon will then put out time-table for its ADS holders.
• Possible promoter transactions in focus.
• Stock is attractively priced post the underperformance.
• Target price assumes no synergy benefits.

Deutsche Bank on Power Finance Corp

• Maintained ‘Buy’; cut price target to Rs 140 from Rs 160.
• Stress from private sector likely.
• Rs 17,000 crore of private assets poses risk of NPL classification and likely haircuts.
• Management does not expect elevated haircuts from probable NCLT accounts.
• Management guides 10 percent loan growth in the next fiscal.
• Management says spreads/NIMs will be softer.
• Adjusted price-to-book value post haircut will be 0.6 times, which is comforting.

Edelweiss on Berger Paints

• Maintained ‘Buy’ with price target of Rs 293.
• Remain positive on Berger .
• Expect revival in volume growth as paint penetration is low.
• Positive correlation between sector volumes and GDP growth..
• Prudent portfolio premiumisation and innovation to spur gross margins
• Expect revenue, operating income and net profit to compound at 16 percent, 19 percent and 20 percent respectively over the fiscal 2017-2020.

Kotak on Kaveri Seeds

• Maintained ‘Sell’; cut price target to Rs 470 from Rs 535.
• Cut in cap on Bt cotton seed prices by Rs 60 per packet to impact profitability.
• Expect realisation to decline by Rs 20 per packet.
• Concerns remain on further cuts in coming years.
• Cut EPS estimates by 12-16 percent for FY19-20.
• Retain negative stance given high dependence on Bt cotton seeds.

JPMorgan on Hindalco Industries

• Maintained ‘Overweight’ with price target of Rs 335.
• YTD stock price correction driven by aluminum price fall and worries about U.S. Section 232 impact.
• Upstream impact minimal; Stock not pricing in even current LME prices.
• Expect cost pressures to moderate as coal supplies have picked up.
• See upside risks to India aluminum forecasts.
• Novelis - Steady state EBITDA profile remains intact.
• Hindalco to deliver Rs 20-25 per share as free cash flow.
• Expect re-rating as downstream portfolio continues to grow.
• Stock price correction versus steady business outlook is an opportunity to add.

HDFC Securities on Neuland Labs

• Initiated ‘Buy’ with a price target of Rs 1,065.
• Neuland likely to report a strong recovery in the next fiscal.
• Expect 19 percent compounded growth rate in revenue and 800 basis point margin expansion and seven times earnings over the fiscal 2018-2020.
• Growth driven by volumes in niche API and CMS business segments.
• CMS and niche segment likely to contributed more than 55 percent of top line in the financial year-ending March 2020.
• CMS - At inflection point; Business to grow at 16 percent compounded growth rate over the fiscal 2018-2020.
• Niche APIs – low volume, quality products.
• Expect surprise launches in CMS segment which has not been factored in.
• Return ratios to recover fully by March 2020.
• Current price offers an attractive opportunity for investors to entry.