Employees walk through the atrium of the National Stock Exchange of India Ltd. (NSE) building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On April 13

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Asian stocks built on this week’s advance after signs that trade tensions are easing boosted risk appetite. Equities from Sydney to Hong Kong advanced though U.S. stock futures slipped.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.4 percent to 10,496 as of 7:15 a.m.

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BQ Live

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

Global Cues

  • U.S. stocks gained and Treasuries retreated as President Donald Trump said he’s considering rejoining the Trans-Pacific Partnership trade deal he pulled out of shortly after taking office.

Europe Check

European stocks climbed for the third time this week as investors’ concerns over a conflict in the Middle East cooled and the euro’s drop supported exporters.

  • The euro sank 0.3 percent to $1.2325, the largest decrease in more than two weeks.
  • The British pound rose 0.4 percent to $1.4226 on its fifth consecutive advance.
  • Germany’s 10-year yield climbed two basis points to 0.515 percent.
  • Britain’s 10-year yield gained seven basis points to 1.456 percent, the highest in three weeks.

Asian Cues

  • Japan’s Topix index climbed 0.6 percent as of 9:03 a.m. in Tokyo.
  • Australia’s S&P/ASX 200 Index gained 0.2 percent.
  • Futures on Hong Kong’s Hang Seng Index advanced 1 percent.
  • The S&P 500 climbed 0.8 percent.

Here are some key events coming up this week:

  • India to release trade data for the month of March.

Commodity Cues

  • West Texas Intermediate crude rose 0.4 percent to $67.07 a barrel.
  • Brent trades lower for second day at $71.86 per barrel; down 0.2 percent.
  • Gold was at $1,335.48 an ounce after sinking 1.4 percent.
  • Sugar snapped two-day losing streak; ended higher at 12.13 cents per pound; up 0.1 percent.

Shanghai Exchange

  • Steel traded lower for second day; down 0.3 percent.
  • Aluminium traded near six-week high; up 1.4 percent.
  • Zinc traded lower for second day; down 2.6 percent (lowest level since Sept 2017).
  • Copper declined for second straight day; down 1 percent.
  • Rubber traded lower for third day; down 0.5 percent.

Stories You Might’ve Missed

  • Retail inflation cools but core inflation hardens. Industrial output also stays above 7 percent for the fourth straight month.
  • Stock picker who built $2 billion empire unfazed by election
  • India's government has locked horns with the RBI over new stressed asset rules.
  • Almost half of India's dirty dozen of insolvent companies are one step away from resolution.
  • Implementation of GST not ‘unfixable’ problem, Raghuram Rajan says
  • Mukesh Ambani's cheap data is fueling India's piracy addiction.
  • WTO has warned that global trade growth will be hurt from geopolitical tensions.
  • Ace investor Dolly Khanna has raised a toast to this liquor stock.
  • Apple's HomePod promises better sound quality. That hasn’t drawn buyers.
  • Why are people so fascinated by black coloured foods?

Indian ADRs

Nifty Earnings To Watch

Infosys Preview Q4FY19 (Bloomberg Estimates)

  • Revenue in dollar terms may grow 1.9 percent at $2,808 million
  • Total income may rise 1.9 percent at Rs 18,129 crore
  • EBIT seen 2.5 percent higher at Rs 4,425 crore
  • EBIT margin seen at 24.4 percent versus 24.3 percent
  • Profit may fall 27.8 percent to Rs 3,702 crore

Other Earnings To Watch

  • Rane Brake
  • Bhansali Engineering Polymers

Stocks To Watch

  • Fortis received unsolicited binding offer from Hero Enterprises and Burman Family to invest Rs 1,250 crore through preferential allotment. (more details here)
  • Thyssenkrupp says due diligence for Tata Steel joint venture almost completed; expect decision on it by June-end.
  • Vedanta chairman commits to ramp up Zambia operations (Bloomberg)
  • Boeing signed partnership with M&M HAL for fighter jets.
  • Dabur says dissolution of subsidiary to be completed by March 2019.
  • Texmaco Rail opened subsidiary in South Africa to grow exports and EPC business in the African region.
  • HCL Technologies, Sumeru Equity partner to acquire Actian Corp in an all cash deal worth $330 million.

Bulk Deals

  • Agro Tech Foods: EQ India Fund bought 1.50 lakh shares or 0.6 percent equity at Rs 650 each.
  • MMP Industries: Old Bridge Capital Management bought 2.14 lakh shares at Rs 192.44 each.
  • Balrampur Chini Mills: State Street Emerging Markets Active Securities Lending QIB Common Trust Fund sold 15.13 lakh shares or 0.6 percent equity at Rs 74.2 each.

Kwality

  • Letko Brosseau Emerging Marchkets Equity Fund bought 36.50 lakh shares or 1.5 percent equity at Rs 59 each.
  • Sidhaant & Sons HUF sold 15 lakh shares or 0.6 percent equity at Rs 59.04 each.

Dish TV

  • Promoter World Crest Advisors LLP bought 9.15 crore shares or 8.6 percent equity at Rs 73.1 each.
  • Catalyst Trusteeship Ltd sold 9.15 crore shares or 8.6 percent equity at Rs 73.1 each.

Corporate Action

  • Amrutanjan Health Care Limited ex-date for 1:1 stock split.
  • Karda Constructions last trading day under T group.

Who’s Meeting Whom

  • Endurance Technologies to meet Fidelity Institutional Asset Management on April 13.
  • Dixon Technologies to meet ULJK Financial Services on April 13.
  • Advanced Enzyme to meet Singular Capital on April 16.
  • Gabriel India to meet investors / analysts on April 13.

Insider Trades

  • Shalimar Paints promoter Nalwa Investments sold 9.23 lakh shares on April 11.
  • Liberty Shoes promoter Arpan Gupta sold 6,045 shares from April 9–11.
  • Divis Lab promoter Madhusudana Rao Divi sold 5,626 shares on April 10.
  • SH Kelkar promoter Kedar Vaze sold 73,217 shares from April 9–10.

Rupee

  • Rupee closed at 65.26/$ on Thursday from 65.31/$ on Wednesday.

Top Gainers And Losers

Index Trends

F&O Cues

  • Nifty April futures closed trading at 10,465 with a premium of 6.4 points from 8 points.
  • April series: Nifty open interest up 5 percent, Bank Nifty open interest up 5 percent.
  • India VIX ended at 14.5, down 1 percent.
  • Max open interest for April series shifts to 10,600 call strike from 10,500 (open interest at 39 lakh, up 1.5 percent).
  • Max open interest for April series shifts to 10,300 Put from 10,000 (open interest at 55.4 lakh, up 27 percent).

F&O Ban

  • In ban: Jet Airways IRB Infra, Balrampur Chini, JP Associates.
  • New in ban: IRB Infra.

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 1.53 from 1.50.
  • Nifty Bank PCR at 1.61 from 1.41.

Fund Flows

Brokerage Radar

Credit Suisse on Adani Ports

  • Maintained ‘Outperform’ with price target of Rs 480.
  • Rising coal imports an opportunity; Can cover for Mundra power plant loss.
  • Strong container trend on sector growth and capacity adds.
  • Start of PSA may not affect because of different hinterland.
  • Valuations reasonable with strong cash flows and higher dividend payments.

Deutsche Bank on Oil and Gas

  • Petroleum product consumption growth accelerated in 2018.
  • Expect growth to sustain with improving industrial activity.
  • Autofuel margins being sustained even in a high oil price environment.
  • OMCs offer attractive risk – reward.

IDFC Securities on UPL

  • Maintained ‘Outperform’ with a price target of Rs 982.
  • UPL well placed to leverage the global generic opportunity.
  • Expect volume growth momentum to sustain.
  • Focus on profitable growth to continue.
  • Expect revenue, operating income and net profit to compound at 10 percent, 11 percent and 16 percent over the fiscal 2017-2020.
  • UPL look attractive given its global scale and strong earnings visibility.

Goldman Sachs on Tata Motors

  • Maintained ‘Neutral’; cut price target to Rs 366 from Rs 393.
  • Turnaround in India business is positive.
  • Meaningful stock rally hinges on positive surprises at JLR.

Ventura on Eris Lifesciences

  • Initiated ‘Buy’ with a price target of Rs 1,060.
  • Eris Lifesciences has a strong competitive position.
  • New launches and acquisitions to boost revenue and earnings in the current and the next financial year.
  • Eris has the highest Ebitda margins among peers.
  • Margins to improve with more focus on chronic segment.
  • Shifting manufacturing to Guwahati to give cost advantage.
  • Expect revenue, operating income and net profit to compound at 22 percent, 34 percent and 31 percent respectively over the financial year 2018-2020.
  • Expect return ratios to be over 40 percent.

IIFL on Varun Beverages

  • Maintained ‘Buy’; raised price target to Rs 750 from Rs 710.
  • New products and geographies to boost growth in coming years.
  • Expect revenue and earnings per share to compound at 16 percent and 31 percent respectively over 2017-19.
  • 2018 to witness better growth as demand seems to have recovered.
  • Expect RoIC to improve by 320 basis points in next two years.

UBS on Indian Hotels

  • Maintained ‘Buy’ with a price target of Rs 170
  • Expect operating income to compound at 17 percent through the financial years till March 2020.
  • Strong narrative from top management.
  • Management expect to improve margins to 25 percent and RoE by upwards of 10 percent in 3-4 years.
  • Like Indian Hotels due to its favourable locations and lower competition segments.
  • Future points towards a leaner, more efficient and technology-driven strategy.
  • Market not pricing in a prolonged upcycle scenario.

Kotak on Banks

  • Private banks’ gain continues; nationalised banks continue to lose market share.
  • Current accounts: private banks lead the industry for the first time in history.
  • Focus shifts to North and East India; central India continues to impress.
  • Nationalised banks drive productivity improvement in rural areas.
  • Nationalised banks performance in urban areas remain muted.

Deutsche Bank on Indian Telecom

  • Consolidation over: Prepare for inevitable revenue recovery.
  • Expect industry revenue to decline 9 percent in the current financial year.
  • Expect compounded growth rate of 6.8 percent in mobile revenue through the financial years till 2023.
  • Expect revenue market share: Idea-Vodafone (37 percent), Bharti (36 percent) and Jio (25 percent).
  • Stock prices have closely tracked trends in tariffs.
  • Bharti Airtel: Maintained ‘Buy’; cut price target to Rs 475 from Rs 595.
  • Beneficiary of India consolidation; Expect Africa turnaround.
  • Idea Cellular: Maintained ‘Buy’; cut price target to Rs 130 from Rs 105.
  • Market underestimating merged company’s market position.
  • Expect revenue and operating income to compound at 10 percent and 15 percent respectively over the financial years till March 2020.
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