Asian equities pushed higher at the start on Wednesday as an encouraging U.S. earnings season underscored resilient growth.
Stock benchmarks climbed in Japan, Hong Kong and Australia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.5 percent to 10,610 as of 7:05 a.m.
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Here’s a quick look at all that could influence equities on Wednesday.
- U.S. stocks rallied for a second day amid better-than-expected earnings from industry heavyweights, adding to evidence that the strengthening economy is lifting corporate profits.
- The yield on 10-year Treasuries fell one basis point to 2.812 percent.
- European stocks rose in a broad rally, buoyed by a falling euro and optimism spurred by better-than-expected corporate profits from some U.S. industry heavyweights.
- The euro fell 0.1 percent to $1.2371.
- The British pound declined 0.4 percent to $1.4285, the first retreat in more than a week.
- Germany’s 10-year yield decreased two basis points to 0.51 percent.
- Britain’s 10-year yield dipped three basis points to 1.436 percent.
Chinese stocks pointed to a rebound after a surprise move by the People’s Bank of China to cut the reserve requirement ratio to improve funding arrangements for banks.
- Japan’s Topix index rose 0.7 percent.
- Australia’s S&P/ASX 200 Index added 0.2 percent.
- The Kospi index rose 0.9 percent.
- Futures on Hong Kong’s Hang Seng Index advanced 1.2 percent.
- S&P 500 futures rose 0.1 percent.
Here are some global key events coming up this week:
- Morgan Stanley is among companies reporting results this week.
- The Bank of Canada has a monetary policy decision.
- Prime Minister Narendra Modi to hold talks with British counterpart Theresa May
- West Texas Intermediate crude rose 0.5 percent to $66.86 a barrel.
- Gold fell 0.1 percent to $1,346.36 an ounce.
- Brent trades higher at $71.9 per barrel; up 0.4 percent
- Sugar ended lower at 11.8 cents per pound; down 2.9 percent.
- Steel snapped two-day losing streak; up 1.6 percent.
- Aluminium traded higher for fourth day; up 0.2 percent.
- Zinc traded higher for third day; up 1 percent.
- Copper traded lower; down 0.3 percent.
- Rubber snapped two-day losing streak; up 0.4 percent.
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Nifty Earnings To Watch
Other Earnings To Watch
- HDFC Standard Life Insurance Company
Earnings Reactions To Watch
Tata Sponge Iron (Q4, YoY)
- Revenue up 46 percent at Rs 243.5 crore.
- Net profit at Rs 47 crore versus Rs 21 crore.
- Ebitda at Rs 61.5 crore versus Rs 25.5 crore.
- Margin at 25.3 percent versus 15.3 percent.
Orchid Pharma (Q4, YoY)
- Revenue down 20 percent at Rs 144 crore.
- Net loss of Rs 77 crore versus net loss of Rs 65 crore.
- Ebitda down 31 percent at Rs 13.5 crore.
- Margin at 9.4 percent versus 10.8 percent.
5Paisa Capital (Q4, YoY)
- Revenue at Rs 8 crore versus Rs 5 crore.
- Net loss of Rs 7 crore versus net loss of Rs 3 crore.
Stocks To Watch
- Fortis Healthcare received non-binding interest from Fosun.
- Lupin received tentative U.S. FDA approval for generic AndroGel.
- Indian Hume Pipe Company Ltd received order of Rs. 108.19 crore.
- Shalby Signs memorandum of understanding with Sen Sok International University Hospital, Cambodia.
- Ducon received final NCLT order approving ongoing merger process.
- Jayaswal Neco Industries said Supreme Court directed parties involved in debt restructuring of company to maintain status quo.
- AstraZeneca to invest $90 million over the next five years in India.
- Vedanta’s resolution plan for Electrosteel Steels approved by NCLT. Vedanta will hold 90 percent stake while existing shareholders and creditors to get the remaining 10 percent.
- KS Oils said corporate insolvency resolution process expired on April 16. The committee of creditors has not approved resolutions plans.
- Andhra Bank said that the exposure to SSK Trading of Rs 30 crore is non performing asset. (Bloomberg)
- HAL enhanced jet production capacity. (Bloomberg)
- Jagran Prakashan to consider share buyback on April 27.
- Uttam Galva says lenders yet to accept offer to settle debt.
- Future Consumer hiked stake in Integrated Food Park Pvt. Ltd. to 99.93 percent.
- ‘Well wishers’ cleared Kochhar company dues prior to ICICI Bank appointment; Credential Finance settled dues before Chanda Kochhar became ICICI Bank CEO (Economic Times).
- Tata Steel raises $1.9 billion in loans as it looks to refinance high-cost debt of its Singapore unit; fresh loans priced at 200 basis points above LIBOR (Economic Times).
- Karda Constructions: Capstone Capital Partners sold 87,360 shares or 0.7 percent equity at Rs 185.94 each.
- Kwality: UA Enterprises Pvt Ltd sold 12 lakh shares or 0.5 percent equity at Rs 59.06 each.
- Talwalkar Fitness: Tata MF sold 4.09 lakh shares or 1.3 percent equity at Rs 88.41 each.
- Ajmera Realty: Promoter Rajnikant Ajmera sold 5 lakh shares or 1.4 percent equity at Rs 282.6 each.
- Idea Cellular: First State Investments ICVC- Stewart Investors Asia Pacific Leaders Fund sold 3.92 crore shares or 0.9 percent equity at Rs 71.5 each.
- Moldtek: AKG Finvest sold 1.5 lakh shares or 0.5 percent equity at Rs 50 each.
Who’s Meeting Whom
- GRP Ltd to meet analysts/investors on April 18.
- Finolex Industries to meet Valuequest Research.
- Ganesha Ecosphere to meet analysts/investors on April 18-19.
- Majesco to meet Quant Broking on April 18.
- Rico Auto to meet analysts/investors on April 18.
- Bhansali Engineering Polymers to meet Prabhudas Lilladher on April 18.
- UFO Moviez to meet analysts/investors on April 18.
- VIP Industries promoters acquired 1.19 lakh shares on April 11.
- Garnet International promoter Kartik Gaggar acquired 29,000 shares on April 13.
- Aarti Industries promoter Chandrakant Gogri sold 5,321 shares from April 12–13.
- Liberty shoes promoter Arpan Gupta sold 1,500 shares on April 13.
- Rajesh Exports promoter Rajesh Mehta acquired 1,616 shares on April 16.
- Ramkrishna Forgings promoter Riddhi Portfolio Private Limited acquired 10,000 shares on April 13.
- Adani Power promoter Pan Asia Trade and Investment Pvt. Ltd. Acquired 90 lakh shares on April 16.
- Vishal Fabrics promoter Vedprakash D. Chiripal acquired 39,000 shares on April 16.
- CL Educate promoter Gautam Puri acquired 553 shares.
- Avadh Sugar & Energy promoter Chandrashekhar Nopany acquired 5,000 shares on April 16.
- Phillips Carbon Black last trading day before 5:1 stock split.
- Foods & Inns last trading day before 10:1 stock split.
- Talwalkars Better Value Fitness Ltd placed under Additional Surveillance Measures with effect from today by BSE.
- Rupee closed at 65.65/$ on Tuesday from 65.49/$ on Monday.
Top Gainers And Losers
- Nifty April futures closed trading at 10,551 with a premium of 2.5 points versus 14.6 points.
- April series: Nifty open interest up 2 percent, Bank Nifty open interest up 5 percent.
- India VIX ended at 14.04, down 1.5 percent.
- Max open interest for April series at 10,700 (open interest at 46.3 lakh, up 5 percent).
- Max open interest for April series at 10,400 (open interest at 52.6 lakh, down 2 percent).
- In ban: IRB Infra, JP Associates, TV18 Broadcast, Reliance Communications.
- Out of 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.
- Nifty PCR at 1.63 versus 1.65.
- Nifty Bank PCR at 1.47 versus 1.53.
Stocks Seeing High Open Interest Change
Edelweiss on Future Supply Chain
- Initiated ‘Buy’ with a price target of Rs 862.
- Expect demand boom for third party logistics services.
- Rapidly expanding anchor client to ensure growth.
- Asset-light model to ensure strong free cash flow.
- Improving working capital cycle to spur return ratios.
- Expect revenue, operating income and earnings per share to compound at 36 percent, 33 percent and 36 percent over the fiscal 2018-2020.
- Future Supply well placed to capture opportunity.
Motilal Oswal on Room Air Conditioners
- 2018 to be another year of strong industry growth.
- AC penetration to inch up from current low levels.
- Expect 15 percent compounded growth rate in room AC industry over the fiscal 2018-2020.
- Inverters’ share in industry volumes to rise to 50 percent by March 2020.
- Prefer Blue Star over Voltas.
Haitong on ICICI Lombard
- Maintained ‘Buy’ with a price target of Rs 1,000.
- Star Health acquisition could significantly increase ICICI Lombard’s retail health book.
- Retail health has been a profitable segment for insurers.
- Potential acquisition of Star Health could be positive.
Macquarie on Phoenix Mills
- Maintained ‘Outperform’ with a price target of Rs 732.
- Phoenix Mills-CPPIB inked an agreement to purchase 16 acres of land in Hebbal - media reports.
- Catchment area for the mall is good.
- Visibility of growth increasing.
- Phoenix Mills is one of our top picks in the Indian real estate space.
CLSA on Vedanta
- Maintained ‘Buy’ with a price target of Rs 410; implying a potential upside of 42 percent from the last regular trade.
- Acquired Electrosteel Steels at attractive valuations.
- Acquisition price implies an EV/tonne of $562.
- If capacity expanded to 2.5 MTPA, then EV/tonne down to $409.
- Acquisition marginally EPS/Value accretive at full utilisation and EBITDA/tonne of $120.
CLSA on FMCG
- Dabur: Upgraded to ‘Buy’ from ‘Outperform’; raised price target to Rs 415 from Rs 400.
- Rural growth outlook improving.
- Pressures from Patanjali Ayurved seem to be behind.
- IMD forecast and expected increase in MSP is positive.
- Emami, Dabur, HUL and Colgate have highest rural exposure.
- Top consumer picks: Emami, Dabur, ITC, Varun Beverages and Jubilant Foods.
HSBC on India Non-Ferrous
- Ongoing disruptions have led to a surge in alumina and aluminium prices.
- Integrated producers to benefit more.
- Q4 earnings to be lacklustre on the back of rising input cost.
- Hindalco: Maintained ‘Buy’; raised price target to Rs 305 from Rs 284.
- Hindustan Zinc: Maintained ‘Buy’; raised price target to Rs 370 from Rs 365.
- Vedanta: Maintained ‘Buy’; cut price target to Rs 405 from Rs 435.
- Supply cuts due to ongoing disruptions pose further upside.
CLSA on India Power
- Government’s 24x7 plan has better chances of being implemented
- Expect 30 percent rise in demand.
- Lays foundation for next bull market for power stocks.
- Expect utilities to report profit growth of 5-15 percent in the current quarter
- Buy: NTPC, Power Grid, CESC, Tata Power.
- Sell: Adani Transmission, Adani Power and JSW Energy.