An expensive Easter egg. (Source: Bloomberg) 

All You Need To Know Going Into Trade On April 2

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Asian shares edged higher, the dollar steadied and Treasuries slipped as the second quarter began for some of the region’s traders. Volumes are expected to be subdued with many markets across the world still closed for the Easter holiday.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded flat at 10,240.50 as of 6:35 a.m.

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BQ Live

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

Global Cues

  • U.S. stocks rose, with tech shares leading the way, as equity markets ended a tumultuous quarter on a high note.
  • The S&P 500 rose 1.4 percent at the close of trading in New York.
  • The Nasdaq 100 Index rose 1.9 percent.
  • The Bloomberg Dollar Spot Index declined 0.1 percent.
  • The MSCI All-Country World Index climbed 0.9 percent.
  • The yield on 10-year Treasuries rose two basis points to 2.76 percent.

Europe Check

  • Europe’s shares eke out a gain as global markets remain mixed amid an extended selloff in U.S. technology giants.
  • The Stoxx Europe 600 Index rose 0.4 percent.
  • The euro was little changed at $1.2303.
  • The British pound decreased 0.4 percent to $1.4027.
  • Germany’s 10-year yield fell one basis point to 0.49 percent.
  • Britain’s 10-year yield slipped one basis point to 1.35 percent, the lowest in more than two months.

Asian Cues

  • Japan’s Topix index rose 0.2 percent as of 9:16 a.m. in Tokyo.
  • South Korea’s Kospi added 0.8 percent.
  • Futures on the S&P 500 slid 0.1 percent.
  • The Japanese yen was steady at 106.28 per dollar.

Here are some key events coming up this week:

  • India PMI data to be released today.
  • Easter Monday is a public holiday in many areas including the U.K., Australia, Canada, and most of Europe.
  • U.S. manufacturing PMI and ISM manufacturing data due Monday.
  • Reserve Bank of Australia April monetary policy decision due Tuesday.
  • New York Fed debuts the Secured Overnight Financing Rate on Tuesday.
  • Reserve Bank of India April policy decision due Thursday.
  • U.S. employment data due Friday; jobless rate probably fell in March after holding at 4.1 percent for five straight months.

Commodity Cues

  • West Texas Intermediate crude rose 0.4 percent to $65.17 per barrel.
  • Gold was flat at $1,325.50 an ounce.

Also Read: For Bond Traders, Stocks Are All That Truly Matters in Jobs Week

Indian ADRs

Stocks To Watch

  • ICICI Bank said its credit approval processes are robust and reposes “full faith” in CEO Chanda Kochhar.
  • ICICI Bank said exposure to Videocon at the time was at Rs 3,250 crore, less than 10 percent of the total amount lent by the consortium.
  • UltraTech received CCI nod for Binani Cement bid.
  • Daiichi Sankyo moves SEBI to block Fortis-Manipal deal (Business Line)
  • Tata Motors’ domestic sales jumped 35 percent in March aided by the commercial vehicles and passenger vehicles segments.
  • Maruti Suzuki sales rose nearly 15 percent in March led by the mini segment.
  • Dalmia Cement Bharat said Binani evaluation criteria was fair.
  • Canara Bank has called-off move to divest its entire shareholding in housing finance subsidiary Canfin Homes after receiving lower than expected price quotation.
  • Government set domestic natural gas price at $3.06/mmBtu For April-September.
  • Tata Power sold its defense business to Tata Sons unit at an enterprise value of Rs 2,230 crore.
  • Cadila Healthcare said that the U.S. FDA completed inspection of Topical facility with 0 observations under Form 483.
  • PNB to settle all 352 LOUs and foreign letters of credit (FLCs) worth Rs 6,500 maturing by March 31.
  • Coal India targets 20 GW solar capacity in 10 years.
  • Punj Lloyd received EPC order worth Rs 806 crore in Odisha from NHAI.
  • Cox & Kings to seek shareholders’ approval for demerger of its travel and financial service business on May 10.
  • Navkar Corp unit received Western Railway approval for opening of green field PFT terminal.
  • Rico Auto Industries applied for partial closure of its loss-making unit in Haryana.
  • Balaji Amines acquired 55 percent stake in Balaji Specialty Chemicals for Rs 66 crore.
  • Take Solutions sold its entire 51 percent stake in Towell Take Investments, Muscat for $2 million.
  • STC said that the lenders may report its account as NPA for delay/non-payment of interest amounting Rs 309.8 crore.
  • Pabrai Investment Fund acquired additional 69,176 shares (0.1 percent stake) in Healthcare Global Enterprises.
  • Lenders reject sole bid for Jyoti Structures insolvency process.
  • Nestle, Kraft Heinz, Unilever and ITC among suitors for GSK Consumer’s Horlicks. (Mint).
  • Numetal agreed to buy 70 percent in Odisha Slurry Pipeline Infra from SREI Infra.

New Nifty Constituents Effective Today

Inclusion

  • Bajaj Finserv
  • Grasim Industries
  • Titan

Exclusion

  • Ambuja Cements
  • Aurobindo Pharma
  • Bosch

Bulk Deals

Fortis Healthcare

  • East Bridge Capital Master Fund bought 2 crore shares or 3.9 percent equity at an average price of Rs 129.5 each.
  • UBS Principal Capital Asia bought 58.60 lakh shares or 1.1 percent equity at Rs 106.44 each.
  • BNP Parbas Arbitrage sold 39 lakh shares or 0.8 percent equity at Rs 123.3 each.
  • Societe Generale sold 89.9 lakh shares or 1.7 percent equity at Rs 127.75 each.

Gati Ltd

  • Reliance Financial sold 5.85 lakh shares or 0.5 percent equity at Rs 87.09 each.

Jain Irrigation

  • Societe Generale sold 26.28 lakh shares or 0.5 percent equity at Rs 106.44 each.

Bank of Baroda

  • Theleme Master Fund bought 7.31 crore shares or 3.2 percent equity at Rs 141.95 each.
  • Merrill Lynch Markets Singapore Pte Ltd sold 7.31 crore shares or 3.2 percent equity at Rs 141.95 each.

CL Educate

  • BNP Paribas Arbitrage bought 1 lakh shares or 0.7 percent equity at Rs 190.5 each.
  • Macquarie Emerging Markets Asian Trading Pte. Ltd sold 1 lakh shares 0.7 percent equity at Rs 190.5 each.

International Conveyors

  • Promoter IGE (India) Pvt Ltd bought 4.98 lakh shares or 0.7 percent equity at Rs 23.65 each.
  • Cresta Fund sold 5 lakh shares or 0.7 percent equity at Rs 23.65 each.

Kaveri Seeds

  • BNP Paribas Arbitrage bought 4.15 lakh shares or 0.6 percent equity at Rs 485.5 each.
  • Macquarie Emerging Markets Asian Trading Pte. Ltd sold 4.15 lakh shares or 0.6 percent equity at Rs 485.5 each.

Trading Tweaks

  • Fortis Healthcare circuit limit revised to 20 percent.
  • Kwality circuit limit revised to 10 percent.
  • Bandhan Bank added to BSE IPO index.
  • Amtek Auto and Jyoti Structures shifted to Z group of shares.

Insider Trades

  • Omax Auto's promoter Devashish Mehta acquired 23,000 shares between March 27–28.
  • Gateway Distriparks promoters acquired 2 lakh shares on March 26.
  • Man Infra promoter Vatsal Shah acquired 1.01 lakh shares on March 27.

IPO/New Listings

  • Sandhar Technologies to list on exchanges. Issue price of Rs 332 per share.
  • Karda Constructions to list on exchanges. Issue price of Rs 180 per share.
  • Lemon Tree Hotels IPO closes. Issue subscribed 1.2 times on final day.
  • Mazagon Dock Shipbuilders seeks SEBI approval for IPO. (Bloomberg)
  • Rail Vikas Nigam files draft papers for IPO. (Bloomberg)

Top Gainers And Losers In March

Index Trends

F&O Cues

  • Nifty April Futures closed trading at 10,152 with a premium of 38.2 points versus 31.7 points.
  • All series-Nifty open interest (OI) up 6 percent, Nifty bank OI down 4 percent.
  • Rollovers: Nifty - 69 percent, Bank Nifty - 75 percent.
  • India VIX ended at 15.7, up 1.3 percent.
  • Max call OI for April series at 11,000 strike price call option, OI at 33.6 lakh, up 8 percent.
  • Max put OI for April series at 10,000 strike price put option, OI at 32 lakh, up 29 percent.

Put-Call Ratio

  • Nifty PCR at 1.01 versus 1.15.
  • Nifty Bank PCR at 1.41 versus 1.19.

Stocks Seeing High Open Interest Change

Brokerage Radar

BofAML on Dilip Buildcon

  • Initiated ‘Buy’ with a price target of Rs 1,244
  • Highways order flows to rise 2.5 times in the current financial year.
  • Competition on the rise; prefer players with superior track record.
  • Dilip Buildcon has seen superior execution and robust order book.
  • Expect sales and earnings per share to compound at 24 percent and 22 percent respectively over the fiscal 2018-2020.
  • Dilip Buildon to maintain industry leading RoEs.
  • Valuation undemanding; stock could further re-rate.

IDFC Securities on S Chand & Company

  • Initiated Outperform with a price target of Rs 520.
  • Clean play on India’s growing K-12 education space.
  • K-12 content market has huge potential.
  • Growth to come from increasing reach.
  • Strengthening balance sheet to help inorganic growth.
  • Ramp-up of digital business could aid margins .
  • Expect revenue, operating income and net profut to compound at 14 percent, 14 percent and 32 percent respectively over the fiscal 2017-2020.
  • Debt to reduce over the fiscal 2018-2020; return ratios to improve.

Credit Suisse on Cummins India

  • Upgraded to ‘Outperform’ from ‘Neutral’; raised price target to Rs 975 from Rs 875.
  • Deep underperformance and positive early indicators drive upgrade.
  • Lacklustre results on spike in expenses to even out.
  • Domestic business recovers from GST can strengthen further.

HSBC on Tata Motors

  • Maintained ‘Buy’ with a price target of Rs 480; implying a potential upside of 44 percent from the last regular trade.
  • U.S. volumes and pricing expected to be stable in 2018.
  • Europe outlook is slightly better than U.S.
  • Expect continued strong growth in China.
  • Better traction in Rest of the world markets.
  • Growing R&D need is negative if volume growth doesn’t pick-up.
  • Risk-reward favourable despite demand challenges JLR.

Axis Capital on RBL Bank

  • Maintained ‘Buy’ with a price target of Rs 650; implying a potential upside of 36 percent from the last regular trade.
  • Well poised for strong growth.
  • Growth rates to remain healthy.
  • Net interest margins to remain intact.
  • Expect RBL to scale up materially without any significant issues.
  • RBL will command a premium to peers.

IIFL on CESC

  • Maintained ‘Buy’ with a price target of Rs 1,270; implying a potential upside of 33 percent from the last regular trade.
  • NCLT hearing improves demerger visibility.
  • Expect demerger completion by June.
  • Weakness in stock price good entry point

Morgan Stanley on Oil & Gas

  • Quantum of hike was in line with expectations.
  • Believe gas distributors will pass hike to maintain margins.
  • Likely the last gas price hike until September 2019.
  • GAIL (India) remains preferred gas play.

Macquarie on ICICI Bank

  • Maintained ‘Outperform’ with a price target of Rs 425.
  • Bank’s press release raised more questions.
  • Trust deficit could emerge if prompt clarifications not released.

CLSA on Dish TV

  • Maintained ‘Buy’ with a price target of Rs 108.
  • Dish TV and VD2h merger complete.
  • Significant merger synergy ahead.
  • Expect 5-7 percent compounded growth rate in operating income and Rs 300 crore synergies.
  • Stock can deliver 26-40 percent upside.
  • Risk-reward favourable.

Morgan Stanley on Biocon

  • Maintained ‘Overweight’ with a price target of Rs 785.
  • Glargine approval for E.U. markets is major milestone in monetisation efforts.
  • Assumed 15-20 percent market share and 45-50 percent price erosion.
  • Expect Biocon to generate topline of $70-100mn in two years.
  • Expect more approvals in 2018 and meaningful monetization in 2019 and beyond.

CLSA on ICICI Lombard

  • Maintained ‘Buy’ with a price target of Rs 970.
  • To report underwriting profit from the current financial year.
  • Correction in bond yields abate concern.
  • Premium growth to remain healthy.
  • To benefit from regulatory actions .
  • Expect gross premium and profit to compound at 17 percent and 24 percent respectively over the fiscal 2017-2020.
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