Asian stocks opened lower after the cancellation of the U.S.-North Korea summit, which sparked a move to safe-haven assets.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade at 10,506.5 as of 6:50 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
U.S. stocks partially rebounded from early declines on Thursday sparked by the cancellation of the U.S.-North Korea summit, as investors assessed the broader impact on trade relations and economic growth.
European equities declined as Trump’s decision to call off the June summit with North Korea’s leader spurred concerns about geopolitical tensions hurting global growth.
- The MSCI Asia Pacific Index fell 0.3 percent.
- Japan’s Topix index fell 0.3 percent.
- South Korea’s Kospi index fell 0.6 percent.
- Australia’s S&P/ASX 200 Index fell 0.2 percent.
- S&P 500 futures rose 0.2 percent.
- West Texas Intermediate crude was little changed at $70.68.
- Brent crude traded flat at $78.80 a barrel.
- Gold fell less than 0.05 percent to $1,304.28 an ounce.
- Aluminium ended 0.7 percent higher at $2,292.75 per MT.
Fuel Price Update
State-run oil marketers hiked petrol and diesel prices for the twelfth day in a row.
The price of petrol was hiked by 36 paise today to Rs 85.65 a litre in Mumbai and diesel was raised by 24 paise to Rs 73.20 a litre, according to data released by Indian Oil Corporation Ltd.
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Here are some key events coming up this week:
- At the St. Petersburg Forum today, Russian President Vladimir Putin and French President Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News Editor-in-Chief John Micklethwait.
- European Union finance ministers discuss the latest on Brexit talks, in Brussels, today.
Stocks To Watch
- Avenue Supermarts says founder RK Damani has completed the sale of 62.4 lakh shares (1 percent stake) between May 21- 24.
- Neuland Labs to allot 16.75 lakh equity shares at Rs 750 each through QIP.
- Gayatri Projects receives letter of award for highway project in Telangana worth Rs 425 crore.
- Camlin Fine Sciences to raise Rs 250 crore via issue of securities.
- Kaveri Seeds to buy back 29.63 lakh shares at Rs 675 each.
Nifty Earnings To Watch
- Sun Pharma
- Tech Mahindra
Other Earnings To Watch
- Amber Enterprises India
- Bank of Baroda
- Cadila Healthcare
- Central Bank of India
- Engineers India
- General Insurance Corporation of India
- India Cements
- Indian Hotels
- Jagran Prakashan
- Karur Vysya Bank
- Lakshmi Vilas Bank
- Lemon Tree Hotels
- Max Financial Services
- NLC India
- Page Industries
- PC Jeweller
- Va Tech Wabag
Earnings Reactions To Watch
United Spirits (Q4, YoY)
- Revenue up 7 percent at Rs 2,173 crore.
- Net profit at Rs 211 crore versus net loss of Rs 104 crore.
- One-time loss of Rs 291 crore in the base quarter.
- Ebitda up 5 percent at Rs 274 crore.
- Margin at 12.6 percent versus 12.9 percent.
MOIL (Q4, YoY)
- Revenue up 57 percent at Rs 398 crore.
- Net profit up 10 percent at Rs 128 crore.
- Ebitda up 42 percent at Rs 173 crore.
- Margin at 43.5 percent versus 48.2 percent.
Camlin Fine Sciences (Q4, YoY)
- Revenue up 54 percent at Rs 232 crore.
- Net loss of Rs 4 crore versus net loss of Rs 7 crore.
- Ebitda at Rs 11 crore versus Ebitda loss of Rs 7 crore.
- Margin at 4.7 percent versus -4.6 percent.
South India Paper Mills (Q4, YoY)
- Revenue up 30 percent at Rs 56 crore.
- Net profit up 50 percent at Rs 3 crore.
- Ebitda up 27 percent at Rs 7 crore.
- Margin at 12.5 percent versus 12.8 percent.
Sudarshan Chemicals (Q4, YoY)
- Revenue up 31 percent at Rs 384 crore.
- Net profit up 32 percent at Rs 22.5 crore.
- Ebitda at Rs 56 crore versus Rs 33 crore.
- Margin at 14.6 percent versus 11.3 percent.
Kaveri Seed Company (Q4, YoY)
- Revenue up 5 percent at Rs 42 crore.
- Net loss of Rs 18 crore versus net loss of Rs 87 crore.
- Ebitda loss at Rs 13 crore versus a loss of Rs 27 crore.
Pidilite Industries (Q4, YoY)
- Revenue up 15 percent at Rs 1,485 crore.
- Net profit at Rs 244 crore versus Rs 157 crore.
- Ebitda up 6 percent at Rs 274 crore versus Rs 258 crore.
- Margin at 18.5 percent versus 19.9 percent.
Sequent Scientific (Q4, YoY)
- Revenue up 18 percent at Rs 233 crore.
- Net profit at Rs 399.5 crore versus Rs 7 crore.
- One-time gain on sale of assets worth Rs 393 crore in current quarter.
- Ebitda up 36 percent at Rs 30.5 crore.
- Margin at 13.1 percent versus 11.4 percent.
Glaxosmithkline Pharmaceuticals (Q4, YoY)
- Revenue down 1 percent at Rs 749 crore.
- Net profit down 6 percent at Rs 106 crore.
- Ebitda up 13 percent at Rs 155 crore.
- Margin at 20.7 percent versus 18.0 percent.
Heritage Foods (Q4, YoY)
- Revenue up 14 percent at Rs 562 crore.
- Net profit down 91 percent at Rs 21 crore.
- Ebitda loss at Rs 4 crore versus Rs 10 crore.
LT Foods (Q4, YoY)
- Revenue up 15.5 percent at Rs 1,071 crore.
- Net profit flat at Rs 32 crore.
- Ebitda up 4 percent at Rs 96.5 crore.
- Margin at 9 percent versus 10 percent.
Cummins India (Q4, YoY)
- Revenue up 4 percent at Rs 1,233 crore.
- Net profit up 2 percent at Rs 161 crore.
- Ebitda flat at Rs 172 crore.
- Margin at 13.9 percent versus 14.4 percent.
Triveni Engineering (Q4, YoY)
- Revenue down 18 percent at Rs 735 crore.
- Net loss of Rs 102 crore versus net profit of Rs 60.5 crore.
- Ebitda loss at Rs 114 crore versus Rs 169.5 crore.
- RK Damani sold 47.30 lakh shares or 0.8 percent equity at Rs 1,360.2 each.
- Axis Capital sole banker to deal.
- HDFC MF bought 1.98 lakh shares or 2.4 percent equity at Rs 1,292 each.
- DSP Blackrock Emerging Stars Fund sold 2 lakh shares or 2.4 percent equity at Rs 1,292 each.
Who’s Meeting Whom
- Cipla to meet several fund houses including Blackrock Asset Management, ICICI Prudential Life and others between May 25–30.
- eClerx to meet several fund houses including Motilal Oswal, PI Square Investments and others between May 25–28.
- Inox Leisure to meet Ashmore and Ward Ferry Management on May 25 and May 29.
- Nifty May futures closed trading at 10,505, a discount of 8.6 points.
- May series: Nifty open interest down 2 percent; Bank Nifty open interest down 1 percent.
- India VIX ended at 13.1, down 7 percent.
- Maximum open interest for May series at 10,800 (open interest at 49.4 lakh, down 11 percent).
- Maximum open interest for May series at 10,500 (open interest at 55.2 lakh, up 20 percent).
- In ban: BEML, DHFL, Jet Airways, Jain Irrigation, Reliance Communications
- New in ban: Jet Airways, Jain Irrigation
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
Active Stock Futures
Put Call Ratio
- Nifty PCR at 1.28 versus 1.18
- Nifty Bank PCR at 0.96 versus 0.70
- Chambal Fertilizers promoter Yashovardhan Investment & Trading bought 1.20 lakh shares on May 22.
- Bajaj Holdings & Investment promoter Jamnalal Sons bought 3.49 lakh shares on May 21–22.
- Balaji Telefilms promoter Ekta Kapoor bought 6.66 lakh shares on May 23.
- Man Infra Construction promoter Vatsal Shah bought 84,348 shares on May 23.
(As reported on May 24)
- Rupee closed at 68.35/dollar on Thursday versus 68.43/dollar on Wednesday.
CLSA On GAIL
- Upgraded to ‘Buy’ from ‘Sell’, hiked price target to Rs 405 from Rs 337.
- Bunched-up expenses and lower gas trading profit led to 20 percent PAT miss.
- Recent crude price spike not only eliminates U.S. LNG risk but also boosts its core earnings per share.
- China demand and crude spike has turned U.S. LNG from a headwind to a tailwind.
- Several imminent triggers and stock ignoring crude spike gains.
Morgan Stanley On GAIL
- Maintained ‘Overweight’ with a price target of Rs 510.
- High imported gas costs were key to the Q4 miss; operationally good quarter.
- GAIL's contracted gas sourcing should shield it from seasonal volatility.
- Oil to gas differentials widen and concerns about contracted LNG diminish.
Morgan Stanley on United Spirits
- Maintained ‘Equal Weight’ with a price target of Rs 3,250.
- Strong volume growth will drive 2018-19 consensus estimates.
- Strong volume growth in the 'prestige and above' segment.
- Risk-reward for the next 12 months appears less favorable at current valuations.
CLSA On NCC
- Maintained ‘Buy’ with a price target Rs 160.
- Backlog growth robust and reports all–time high Ebitda margin.
- Record inflow driven by AP Capital infrastructure and Delhi government building contracts.
- Buy on improving state capex growth visibility and asset-light model.
Kotak On City Union Bank
- Maintained ‘Add’; hiked price target to Rs 190 from Rs 180.
- Healthy operating profit growth with stable performance on most metrics.
- Return on equity improvement still looks unlikely; FY2015-18 has been at 15 percent.
- Consistent performance maintained, valuing bank at 2.4 times book and 16 times March 2020E EPS.
Deutsche Bank On Jain Irrigation
- Maintained ‘Sell’ with a price target of Rs 82.
- Higher polymer costs likely to pressure micro irrigation project margins.
- Net debt/EBITDA remained elevated at 3.8 times (versus guidance of 3 times).
- Margins at risk from higher oil price.