Men ride an escalator past an electronic screen and ticker board showing stock prices at the Singapore Exchange Ltd. (SGX) headquarters in Singapore. (Photographer: Ore Huiying/Bloomberg)

All You Need To Know Going Into Trade On April 17

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Stocks in Asia edged higher at the open on Tuesday as investors assessed early indications from America’s corporate earnings season and traders awaited a slew of data on China’s economy.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,535 as of 7:15 a.m.

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BQ Live

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

Global Cues

  • U.S. stocks rose as geopolitical tensions faded and investors turned to what’s expected to be a blowout corporate earnings season.
  • The yield on 10-year Treasuries were little changed at 2.83 percent.

Europe Check

  • European stocks began the week with a loss as a stronger euro weighed on the export-oriented market amid easing geopolitical tensions.
  • The euro gained 0.4 percent to $1.2375.
  • The British pound rose 0.7 percent to $1.4333, hitting the strongest in about 22 months.
  • Britain’s 10-year yield increased three basis points to 1.463 percent.
  • Germany’s 10-year yield rose one basis point to 0.525 percent.

Asian Cues

  • Japan’s Topix index fluctuated as of 9:18 a.m. in Tokyo.
  • Australia’s S&P/ASX 200 Index rose 0.5 percent.
  • The Kospi index rose 0.3 percent.
  • Futures on Hong Kong’s Hang Seng Index rose 0.6 percent.
  • S&P 500 futures rose 0.2 percent.

Here are some key events coming up this week:

  • Goldman Sachs Group Inc. and Morgan Stanley among companies reporting results
  • John Williams, soon to be president of the New York Fed, speaks on economic outlook in Madrid on Tuesday.
  • China GDP and Japanese inflation are the featured data points in Asia.
  • Trump welcomes Japan Prime Minister Shinzo Abe to Mar-a-Lago on Tuesday. North Korea and trade will probably be discussed.
  • Mining investors will get to take the pulse of the global industry this week, with Vale, Rio Tinto and BHP offering quarterly production reports.

Commodities Check

  • Gold rose 0.1 percent to $1,347.83 an ounce.
  • West Texas Intermediate crude rose 0.5 percent to $66.56 a barrel after dipping 1.7 percent on Monday in the first retreat in more than a week.
  • Brent traded higher at $71.8 per barrel; up 0.5 percent.
  • Sugar snaps two-day winning streak ends lower at 12.2 cents per pound; down 0.3 percent.

Shanghai Exchange

  • Steel traded lower for second day; down 1.2 percent.
  • Aluminium traded higher for third day; up 2.4 percent (highest level since Jan. 30).
  • Zinc traded higher for second day; up 0.3 percent.
  • Copper snapped three-day losing streak; up 0.8 percent.
  • Rubber traded lower for second day; down 1.7 percent.

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Must Read: Guru Dutt, Hind Par Naaz, And The Horrible Rapes Of Guddi/Gudiya

Indian ADRs

Earnings Reaction To Watch

Lloyds Metals (Q4, YoY)

  • Revenue at Rs 109 crore versus Rs 73 crore.
  • Net profit at Rs 9.9 crore versus Rs 4.7 crore.
  • Ebitda at Rs 7 crore versus Rs 12 crore.
  • Margin at 6.4 percent from 16.4 percent.

Jay Bharat Maruti (Q4, YoY)

  • Revenue down 1 percent at Rs 480 crore.
  • Net profit down 14 percent at Rs 18 crore.
  • Ebitda up 14 percent at Rs 48 crore.
  • Margin at 10 percent versus 8.7 percent.

Earnings To Watch

  • Crisil
  • Muthoot Capital Services
  • Orchid Pharma
  • Tata Sponge Iron
  • 5paisa Capital
  • Gujarat Hotels
  • International Travel House
  • Onelife Capital Advisors
  • Schaeffler India

Stocks To Watch

  • WS Industries proposed a one-time settlement with SBI and discussed settlement with Edelweiss Arc among others.
  • Sobha will invest Rs 500 crore for residential project in GIFT City, Gujarat.
  • Sterlite Technologies board to consider raising funds through issue of securities on April 25.
  • Omkar Specialty Chemicals says Bank of Baroda classified its loan account as NPA.
  • Bajaj Electricals bags orders worth Rs 3,578 crore for rural and urban electrification projects in Uttar Pradesh.
  • Reliance Communications says NCLAT to hear tower sale appeal on tower sale on April 18.
  • BlueStar signs up with Sands International and its partners for distribution of products in Saudi Arabia.
  • Goa Carbon resumes operations at Orissa plant which was shut for maintenance.
  • Adani Ports signs long term regasification pact with Indian Oil for Dhamra LNG Terminal.
  • Fortis Board to meet on April 19 to consider various offers received.
  • HDFC says AMC units FY18 total revenue up 18 percent (YoY) to Rs 1,867 crore, net profit up 31 percent to Rs 721 crore.
  • Alok Industries says resolution professional seeks liquidation.
  • Amtek Auto says submitted resolution plan with NCLT.
  • Religare Enterprises received order from HC stating that the long stop date under SPA cannot be extended further.
  • JM Financial unit acquires additional 8.78 lakh shares in Spandana.

Bulk Deals

  • GSS Infotech: Nomura Singapore bought 1 lakh shares or 0.6 percent equity at Rs 61 each.
  • Majesco: Promoter Sudhakar Ram sold 1.50 lakh shares or 0.5 percent equity at Rs 520 each.
  • Goodluck India: Union KBC Equity Fund sold 2.35 lakh shares or 1 percent equity at Rs 86.74 each.

Teamlease Services

  • Franklin India Smaller Companies Fund bought 3 lakh shares or 1.8 percent equity at Rs 2,150 each.
  • Promoter HR Offshore Ventures PTE sold 1.70 lakh shares or 1 percent equity at Rs 2,150 each.
  • Promoter NED Consultants LLP sold 85,483 shares or 0.5 percent equity at Rs 2,150 each.

Who’s Meeting Whom

  • Hikal Ltd to meet analysts and investors on April 17-18.
  • M&M to meet Motilal Oswal on April 18.
  • BigBloc Construction to meet investors and analysts at its Umargaon plant on April 17.
  • Den networks to meet investors on April 17.
  • Simplex Infra to meet investors from April 17-25.
  • Sandhar Tech to meet JM Financial, Buoyant capital and I-Wealth Mgmt from April 17-19.
  • PPAP Automotive to meet Edelweiss on April 18.
  • Wonderla to meet investors on April 17.

Insider Trades

  • Maharashtra Seamless Promoter Sudha Apparels acquired 1 lakh shares on April12.
  • Plastiblends promoter Jyoti Kabra acquired 4,903 shares from April 10–11.
  • Chaman Lal Setia promoters sold 26,300 shares from April 11–14.
  • Divi’s Lab promoter Madhusudana Rao Divi sold 4,374 shares on April 13.
  • Adani Power promoter Pan Asia Trade and Investment Pvt. Ltd. acquired 50 lakh shares on April 13.
  • Lasa Supregenerics promoter Pravin Herlekar sold 24,000 shares from April 10–11.

Rupee

  • Rupee closed at 65.49/$ on Monday from 65.22/$ on Friday.

Top Gainers And Losers

Index Trends

F&O Cues

  • Nifty April futures closed trading at 10,543 with a premium of 14.6 points versus 9.8 points.
  • April series: Nifty open interest up 1 percent, Bank Nifty open interest up 4 percent.
  • India VIX ended at 14.2, up 0.8 percent.
  • Max open interest for April series at 10,700 (open interest at 44 lakh, up 9 percent).
  • Max open interest for April series at 10,300 (open interest at 55 lakh, up 6 percent).

F&O Ban

  • In ban: Balrampur Chini, IRB Infra, JP Associates, TV18 Broadcast, Reliance Communications.
  • New in ban: Reliance Communications.

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 1.65 versus 1.63
  • Nifty Bank PCR at 1.53 versus 1.45

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Angel Broking on Parag Milk Foods

  • Initiated ‘Buy’ with a price target of Rs 333.
  • Likely to be one of the key beneficiaries of shift towards organized sector.
  • Product portfolio shifting towards high margin products.
  • Margin expansion to be highest in industry by March 2020.
  • Reducing leverage and improving return ratios.
  • Expect revenue and net profit to compound at 13 percent and 27 percent respectively over the fiscal 2018-2020.

IIFL on Prataap Snacks

  • Maintained ‘Buy’ with a price target of Rs 1,720.
  • Attractively placed to tap the huge opportunity in organised snacks.
  • Multiple revenue drivers in sight.
  • Expect revenue and net profit to compound at 19 percent and 107 percent over the fiscal 2017-2020.
  • Margin to improve led by raw material cost saving and favorable mix.
  • Prataap is attractively valued to nearest listed competitor.

Credit Suisse on NTPC

  • Maintained ‘Outperform’ with a price target of Rs 190.
  • Coal shortage situation has not eased.
  • Coal stocks remained well below last year level.
  • NTPC plants continue to face availability issue on coal.
  • Valuations attractive with multiple earnings growth catalysts.

Motilal Oswal on L&T Finance

  • Maintained ‘Buy’ with a price target of Rs 240; implying a potential upside of 41 percent from the last regular trade.
  • Post equity raise, NBFC well capitalised for growth.
  • Don’t need to raise equity capital at least for next 3-4 years.
  • Non-fund based businesses on a strong growth trajectory.

CLSA on Nestle

  • Downgraded to ‘Outperform’ from ‘Buy’; hiked price target to Rs 9,750 from Rs 8,950.
  • Working-capital improvement and strong free cash flow generation seen in 2017.
  • Return ratios improved, but remain below the past peak.
  • Aggression on launches has increased, but near-flat advertising spends disappoint.
  • Downgraded on 13 percent rally seen in past one month.

CLSA on M&M

  • Maintained ‘Buy’; raised price target to Rs 960 from Rs 910.
  • Rural demand outlook improved with normal monsoon forecast.
  • Big hike in government support prices for agri commodities on the anvil.
  • Launch of new MPV to boost utility vehicle segment volumes.
  • Good volume growth outlook.
  • Valuations attractive despite better earnings outlook.

Brokerages on India’s Monsoon Forecast

CLSA says

  • Normal monsoon forecast to aid rural recovery.
  • Agri output likely to stay steady.
  • Expect rural wage growth to pick up.
  • Key beneficiaries: ITC, Emami, M&M, Godrej Consumer and Ramco.

Morgan Stanley says

  • IMD projects normal monsoon.
  • Don't expect any adverse impact on underlying food inflation trends.
  • Government's procurement policy of crops will be key to watch.

Kotak says

  • Normal monsoon on the cards.
  • Premature to conclude on effects on growth and prices.
  • Forecast to bode well for the rural sector.
  • Expect extended pause from the RBI.
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