All You Need To Know Going Into Trade On April 11

Asian stocks fluctuated at the open amid a lack of fresh impetus after an apparent easing of trade tensions between the U.S. and China triggered a buoyant session Tuesday for global equities and a renewed vigor in favor of risk appetite.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded flat at 10,426 as of 7:05 a.m.

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BQ Live

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

Global Cues

Stocks surged after conciliatory comments from U.S. President Donald Trump and Chinese President Xi Jinping aimed at releasing some pressure from the trade tensions between the world’s biggest economies. Treasuries fell with the dollar.

Europe Check

European shares rose for a second day as Chinese President Xi Jinping eased concern about a possible trade war with renewed pledges of economic openness.

• The euro gained 0.3 percent to $1.2353, the highest in two weeks.
• The British pound increased 0.3 percent to $1.4177, the strongest in more than two weeks.
• Germany’s 10-year yield added one basis point to 0.516 percent.
• Britain’s 10-year yield was little changed at 1.407 percent.

Asian Cues

• Japan’s Topix index fluctuated as of 9:10 a.m. in Tokyo.
• Australia’s S&P/ASX 200 Index fell 0.3 percent.
• Kospi index was little changed.
• Futures on Hong Kong’s Hang Seng Index slipped 0.2 percent.
• Futures on the S&P 500 Index fell 0.3 percent. The S&P 500 rose 1.7 percent.

Here are some key events coming up this week:

• China CPI and PPI data due following PPI out of Japan.
• Zuckerberg continues to testify at two Congressional hearings Tuesday and Wednesday.
• U.S. CPI data and FOMC minutes due Wednesday.
• JPMorgan Chase & Co. and Citigroup Inc. report first-quarter earnings Friday.

Commodity Cues

• Gold was up 0.2 percent to $1,342.15 an ounce.
• West Texas Intermediate crude rose 0.2 percent to $65.64 a barrel after rallying 3.3 percent.

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Earnings To Watch

• Goa Carbon

Stocks To Watch

• Fortis Healthcare gets revised offer from Manipal Health Group after opposition from minority shareholders.
• Mahanagar Gas promoter BG Asia Pacific Holdings Pte is looking to sell up to 12.5 percent stake in the company. (More details here)
• Infosys Ltd. partnered with communications services provider Calix to develop and deliver new software modules and services.
• Lemon Tree Hotels signed contract to operate 120 room hotel in Vijaywada that is expected to be operational by March 2021.
• AU Small Finance bank increased deposit rate on savings account for balances between Rs 1 lakh–10 lakh by 50 basis points and Rs 10 lakh–10 crore by 25 basis points.
• IFCI revised benchmark rate to 9 percent from 8.8 percent effective from April 12.
• Dolly Khanna bought 1.04 percent stake in Associated Alcohols as per March 2018 shareholding pattern.
• Binani Industries received shareholders’ approval to sell assets.
• IDBI Bank said Shree Renuka Sugar stake at 9.5 percent after conversion of debt to equity.
• Canada Pension Fund invested additional Rs 938 crore in Phoenix Mills unit; raises stake to 49 percent.
• HFCL won order worth Rs 579 crore from BSNL.
• Star Cement says received Rs 80.26 crore towards subsidies from central government.
• Oricon enterprises partnered with Indiabulls Real Estate subsidiary for joint development of Worli property.

Bulk Deals

• APL Apollo Tubes: WF Asian Reconnaissance Fund bought 5 lakh shares or 2.1 percent equity at Rs 2,140 each.
• Supreme Industries: SmallCap World Fund sold 17.99 lakh shares or 1.4 percent equity at Rs 1,205 each.
• VRL Logistics: Morgan Stanley Mauritius Co sold 5.26 lakh shares or 0.6 percent equity at Rs 389.22 each.

Indian ADRs

Who’s Meeting Whom

• Kalpataru Power Transmission to meet Quantum Securities on April 11.
• M&M to meet BOB Capital Markets on April 11.
• Shaily Engineering to meet investors on April 11.
• Ashoka Buildcon to meet investors on April 11.
• Bodal Chemicals to meet B&K Securities on April 11.

Insider Trades

• Darshana Devang Vora promoter of Advance Syntex bought 2.25 lakh shares on April 5.

Rupee

• Rupee closed at 64.99/$ on Tuesday from 65.03/$ on Monday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty April futures closed trading at 10,421.5 with a premium of 19.3 points from 14.6 points.
• April series: Nifty open interest up 1 percent, Bank Nifty open interest up 14 percent.
• India VIX ended at 14.5, down 2.3 percent.
• Max open interest for April series at 10,500 call strike (open interest at 41.6 lakh, up 5 percent).
• Max open interest for April series at 10,000 Put (open interest at 45.6 lakh, down 1 percent).

F&O Ban

• In ban: Jet Airways, Balrampur Chini
• New in ban: Balrampur Chini

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 1.47 from 1.43
• Nifty Bank PCR at 1.68 from 1.67

Fund Flows

Brokerage Radar

Macquarie on Indian Aluminium

• Expect Aluminium and Alumina prices to rise on Norsk Hydro shutdown and U.S. sanction on Rusal.
• Continue to assess developments, but a positive impact in short term is apparent.
• Hindalco, NALCO and Vedanta to benefit.
• NALCO is most sensitive to prices; Hindalco is top pick on these events.

Jefferies on NTPC

• Maintained ‘Buy’ with a price target of Rs 205.
• Ended previous fiscal on a strong capacity note.
• Coal availability issues of third quarter are resolving; Expect normalcy by September.
• Regulated ROE during the fiscal 2020-2024 could positively surprise.
• Expect 11 percent compounded growth rate in earnings over the fiscal 2017-2020.
• Capacity driven earnings growth to re-rate stock over next 12 months.

Investec on Finolex Industries

• Maintained ‘Buy’; cut price target to Rs 737 from Rs 763.
• Earnings depends on resin spreads.
• Management pursuing volume growth at cost of margins.
• No price hike unlike peers as focus still on market share gains.
• Finolex trading at a discount to peers.

Macquarie on Eicher Motors

• Maintained ‘Outperform’ with a price target of Rs 37,000.
• Enfield dealer checks confirm strong demand.
• Royal Enfield demand to remain higher than production in the current financial year.
• Waiting period of 15-90 days on key models.
• Expect 25% net profit CAGR over next two years.

UBS on Dr. Reddy’s

• Maintained ‘Neutral’; cut price target to Rs 2,420 from Rs 2,550.
• Expect revenue growth to be subdued in the near term.
• Opportunity size in gSuboxone might be constrained due to introduction of more generics.
• Dr. Reddy’s needs more than one big product approval for stock to move up.
• Increased competition and delays in approvals to weigh on the current fiscal’s earnings.
• Stock already pricing in a recovery in the current financial year.

HSBC on SAIL

• Upgraded to ‘Hold’ from ‘Sell’; hiked price target to Rs 88 from Rs 84.
• Demand recovery and benign pricing environment to result in another strong quarter.
• Completion of modernisation and expansion projects to improve profitability.
• Expect average volume growth of 11 percent and operating income growth of 46 percent over the fiscal 2019-2020.
• Expect SAIL to return to profitability in the current fiscal for the first time in four years.
• Lower margins and inefficient capital allocation remain concerns.

Edelweiss on Future Consumer

• Initiated ‘Buy’ with a price target of Rs 77.
• Future Consumer is a long-term play on India’s evolving consumption segment.
• Future Consumer has efficiently leveraged Future Retail’s retail muscle.
• Tapping emerging categories with innovative offerings.
• Differentiated and prudent pricing strategy ensuring desired traction.
• Expect revenue CAGR of 42.5 percent and operating margin to expand by 379 basis points over the fiscal 2017-2020.
• Expect the company to turn profitable from the current financial year.

HSBC on Future Retail

• Maintained ‘Buy’ with a price target of Rs 730.
• Implemented ‘everyday low price’ strategy emulating its rival Avenue Supermarts.
• Future aims to match or better its prices relative to DMart.
• Future has significantly upped its game in value retailing.
• Expect this move to improve store throughput and augment SSSG growth.

Morgan Stanley on Bharti Airtel

• Maintained ‘Overweight’ with a price target of Rs 535.
• Media reports suggest Airtel to sell Kenya operations.
• Airtel in the past has stated that Kenya operations need to be fixed.
• If news is correct then regulatory approvals would be key.

Credit Suisse on Amber Enterprises

• Amber is room-AC manufacturer for leading brands.
• Company expanding footprint in non-AC and more components.
• 9MFY18 bodes well; Better returns on growth/leverage.
• Chinese imports have lost ground; India exporting now.