Traders in the S&P 500 stock index futures pit at the Chicago Mercantile Exchange signal trades shortly before the closing bell (Photographer: Frank Polich/Bloomberg News.)

All You Need To Know Going Into Trade On May 30

Asian equities declined in early trade as concerns about the repercussions of Italy’s political turmoil and the renewal of trade tensions between the U.S. and China gripped financial markets.

Stocks fell in Tokyo, Sydney and Seoul, and futures tipped losses in the rest of Asia after European shares chalked their worst drop in two months, accelerating a slide in American equities.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.6 percent lower at 10,541 as of 7:45 a.m.

Short on time? Well, then listen to this podcast for a quick summary of the article!

BQ Live

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

Global Cues

  • U.S. stocks tumbled the most in more than a month, joining a global equity selloff sparked by concern Italy’s political woes will destabilise Europe.
  • The yield on 10-year Treasuries declined 15 basis points to 2.78 percent, reaching the lowest since April 2.

Europe Check

  • European equities posted their biggest decline in more than two months as banking shares tumbled amid escalating political turmoil in Italy.

Asian Cues

  • The Topix index tumbled 1.7 percent and is poised for its biggest decline in two months.
  • S&P/ASX 200 Index dropped 0.8 percent.
  • Kospi index slid 1.3 percent.
  • Hang Seng Index futures were down 0.6 percent.
  • S&P 500 Index futures lost 0.2 percent.

Commodities Check

  • West Texas Intermediate crude was steady at $66.73 a barrel.
  • Gold rose 0.1 percent to $1,300.62 an ounce.
  • Aluminium ended 0.5 percent higher at $2,278.25 per metric tonne.

Fuel Price Update

State-run Indian Oil Corporation Ltd. rolled back most of the fuel price cut within hours after halting a sixteen-day hiking spree.

  • The country’s largest oil retailer cut prices of petrol and diesel by 1 paisa, according to information available on its website. This after IOC had reduced petrol prices by 60 paise a litre cut and diesel by 56 paise earlier in the day.

Stories That You Might Have Missed

  • Italian assets are once again being scrutinized for stresses that undermine the euro project.
  • Europe's fragility is exposed again
  • Europe’s richest soccer club is finally about to enter the realm of professional women’s football.
  • Government steps up efforts to analyze social media posts and boost nationalism.
  • Facebook tools are used to screen out older job seekers, lawsuit claims
  • Infosys building self-driving golf carts to be future-ready.
  • Facebook Inc. is set to offer its WhatsApp payment services to the whole of India as early as next week.

Here are some key events coming up this week:

  • Bank Indonesia is expected to raise its benchmark rate by 25 basis points to 4.75 percent at a special meeting on Wednesday, about a month ahead of its next regular gathering. It would be the second in two weeks.
  • Bank of Japan Governor Haruhiko Kuroda speaks at an annual BOJ conference in Tokyo.
  • EU trade chief Cecilia Malmstrom and U.S. Commerce Secretary Wilbur Ross are scheduled to meet Wednesday in an informal World Trade Organization ministerial in Paris.
  • The U.S. employment report for May is due Friday. It’s the last before the June Fed meeting.
  • Automakers report May U.S. sales the same day.
  • Also Friday: China’s stock market joins MSCI Inc.’s global indexes.
  • On Saturday U.S. Secretary of Commerce Wilbur Ross will travel to Beijing for more talks with Vice Premier Liu He on topics including ZTE Corp. and trade.

Stocks To Watch

  • Jubilant Foodworks denies news report regarding stake sale by the promoters in the firm.
  • Fortis Healthcare board decides to initiate fresh bidding process. New bids to be submitted by June 14.
  • IndiGo announces fuel surcharges to counter the recent upward surge in oil prices.
  • Rushil Décor to issue shares on preferential basis at a price of Rs 865 each.
  • RSWM to close manufacturing unit located at Tamil Nadu.
  • Uflex to consider issue of CCPS to promoters on June 1.
  • Glenmark Pharma sets up committee to assess feasibility of housing API and consumer care business in separate business entity.
  • Gujarat Narmada Valley Fertilizers and Chemicals clarify that they had a minor gas leak in their TDI Plant in Dahej.

Nifty Earnings To Watch

  • ONGC

Other Earnings To Watch

  • 8K Miles
  • Alkem Labs
  • Apollo Hospitals
  • Berger Paints
  • CG Power
  • Hudco
  • McLeod Russel
  • SAIL
  • Suzlon
  • Torrent Pharma

Earnings Reactions To Watch

BPCL Q4

  • Revenue up 8 percent at Rs 65,239 crore.
  • Net profit up 25 percent at Rs 2,674 crore.
  • Ebitda up 17 percent at Rs 3,721 crore.
  • Margin at 5.7 percent versus 5.3 percent.

Max India Standalone (Q4, YoY)

  • Revenue up 137.5 percent at Rs 19 crore.
  • Net profit of Rs 2 crore versus net loss of Rs 4 crore.
  • Ebitda at Rs 4 crore versus ebitda loss of Rs 6 crore.
  • Margin at 21.1 percent.

Himadri Speciality Chemical (Q4, YoY)

  • Revenue up 47 percent at Rs 551 crore.
  • Net profit up 137 percent at Rs 71 crore.
  • Ebitda up 76 percent at Rs 127 crore.
  • Margin at 23 percent versus 19.2 percent.

Torrent Power (Q4, YoY)

  • Revenue up 15.5 percent at Rs 2810 crore.
  • Net profit up 60 percent at Rs 217 crore.
  • Ebitda down 1 percent at Rs 689.5 crore.
  • Margin at 24.5 percent versus 28.6 percent.

Balmer Lawrie & Co (Q4, YoY)

  • Revenue up 2.3 percent at Rs 478 crore.
  • Net profit up 10.4 percent at Rs 88 crore.
  • Ebitda up 6.9 percent at Rs 85.4 crore.
  • Margin at 17.9 percent versus 17.1 percent.

Power Grid (Q4, YoY) Standalone

  • Revenue up 16.5 percent at Rs 7811.3 crore.
  • Net profit up 4.6 percent at Rs 2004.7 crore.
  • Ebitda up 16.2 percent at Rs 6524 crore.
  • Margin at 83.5 percent versus 83.8 percent.

Dish TV (Q4, YoY)

  • Revenue up 116 percent at Rs 1,532 crore.
  • Net profit of Rs 121 crore versus net loss of Rs 24.5 crore.
  • Deferred Tax Credit of Rs 147 crore in current quarter.
  • Ebitda up 102 percent at Rs 400 crore.
  • Margin at 26.1 percent versus 27.9 percent.

Glenmark Pharma (Q4, YoY)

  • Revenue down 7 percent at Rs 2,280 crore.
  • Net profit down 17 percent at Rs 152 crore.
  • Ebitda down 26.5 percent at Rs 326.5 crore.
  • Margin at 14.3 percent versus 18.1 percent.

Asahi Songwon Colors (Q4, YoY)

  • Revenue up 47 percent at Rs 91 crore.
  • Net profit down 82 percent at Rs 2 crore.
  • Other income of Rs 6 crore in base quarter.
  • Ebitda down 21 percent at Rs 9.5 crore versus Rs 12 crore.
  • Margin at 10.4 percent versus 19.4 percent.

Narayana Hrudayalaya Ltd (Q4, YoY)

  • Revenue up 34 percent at Rs 647 crore.
  • Net profit down 54.5 percent at Rs 10 crore.
  • Ebitda down 13 percent at Rs 52.5 crore.
  • Margin at 8.1 percent versus 12.5 percent.

Eveready Industries (Q4, YoY)

  • Revenue up 14.8 percent at Rs 349.7 crore.
  • Net loss at Rs 16.1 crore versus net profit at Rs 10.5 crore.
  • Ebitda loss at Rs 3.9 crore versus ebitda at Rs 17.7 crore.
  • Margin loss at 1.1 percent versus margin profit at 5.8 percent.

Greenply Industries (Q4, YoY)

  • Ebitda down 22.3 percent at Rs 57 crore.
  • Net profit down 22.2 percent at Rs 32.6 crore.
  • Ebitda down 22.3 percent at Rs 57 crore.
  • Margin at 13 percent versus 16.4 percent.

Bharat Electronics (Q4, YoY)

  • Revenue down 9.5 percent at Rs 3,608.5 crore.
  • Net profit down 29.4 percent at Rs 558.7 crore.
  • Ebitda down 18.7 percent at Rs 796.3 crore.
  • Margin at 22.1 percent versus 24.6 percent.

Thomas Cook (India) (Q4, YoY)

  • Revenue up 20.2 percent at Rs 2662 crore.
  • Net profit at Rs 5860.7 crore versus net loss at Rs 13.1 crore.
  • Ebitda up 1 percent at Rs 95 crore.
  • Margin at 3.6 percent versus 4.3 percent.
  • Exceptional gain worth Rs 5,825 crore on gain on Quess Corp.

Bulk Deals

  • Tata Motors DVR: ICICI Prudential MF bought 27.50 lakh shares or 0.5 percent equity at Rs 170.97 each.
  • Vardhman Textiles: HDFC MF bought 5.73 lakh shares or 1 percent equity at Rs 1245 each.

Trading Tweaks

  • Manpasand Beverages Ltd circuit filter revised to 10 percent.
  • TCS last trading day before going ex bonus.
  • Hatsun Agro Product last trading day before going ex rights.

Indian ADRs

Who’s Meeting Whom

  • MAS Financial to meet several investors including IIFL, Ambit Capital, Haitong Securities etc from May 30 – 31.
  • Dr. Lal Path Labs to meet Alchemy Investment Mgmt and Equirus Securities on June 5 & 6.
  • M&M to meet East Capital, Hong Kong on May 30.

F&O Cues

  • Nifty May Futures closed trading at 10,615.5 discount of 17.4 points versus 9.7 points.
  • Nifty June Futures trading at 10,628 discount of 5 points versus premium of 2.4 points.
  • Nifty Rollover at 30 percent, Bank Nifty Rollover at 29 percent
  • All series-Nifty open interest up 7 percent and Bank Nifty open interest down 9 percent.
  • India VIX ended 13.07, up 0.1 percent.
  • Max open interest for May series at 10,800 Call, open interest at 56 lakh, open interest up 11.5 percent.
  • Max open interest for May series at 10,500 Put, open interest at 49.9 lakh, open interest down 19 percent.

F&O Ban

  • In Ban: Balrampur Chini, DHFL, IDBI, Jet Airways, JP Associates, Just Dial
  • New in ban: JP Associates, Just Dial
  • Out of ban: Jain Irrigation, Reliance Communications

Alert: Only intraday positions can be taken in stocks which are in F&O ban, in case of a rollover of these intraday positions there is a penalty.

Put-Call Ratio

  • Nifty PCR at 1.39 versus 1.51.
  • Nifty Bank PCR at 0.91 versus 1.41.

Insider Trades

  • Shree Renuka Sugars promoters sold 48 lakh shares from May 24 – 25.
  • Laurus Labs promoters acquired 2.05 lakh shares on May 23.

(As reported on May 29)

Rupee

  • Rupee closed at 67.87/$ on Tuesday versus 67.43/$ on Monday.

Brokerage Radar

IDBI Capital on Multiplexes

  • Inox Leisure: Initiated ‘Buy’ with a price target of Rs 367; implying a potential upside of 37 percent from the last regular trade.
  • PVR: Initiated ‘Buy’ with a price target of Rs 1,700; implying a potential upside of 27 percent from the last regular trade.
  • India’s demographics and low penetration of screens provide huge growth opportunity.
  • With surge in discretionary spend, expect multiplex sector to benefit.
  • Multiplex sector to leverage the momentum in non-ticketing revenue.
  • With improved outlook for movies for FY19, expect the momentum to sustain.

Macquarie on Prestige Estates

  • Maintained ‘Outperform’ with a price target of Rs 396.
  • March quarter net profit in line with estimates.
  • Presales pick-up aided by new launches.
  • Targets to launch at least one project in affordable housing.
  • Remains one of the preferred picks in real estate space.

Deutsche Bank on BHEL

  • Maintained ‘Neutral’ with a price target of Rs 90.
  • Ebitda Margins adjusted for forex gains fall down to 1.6 percent.
  • Wages could further increase in 2018-19 post final negotiation.
  • Rising commodity prices could put pressure on raw material cost.
  • Order wins strong in 2017-18; Favourably placed in orders.

Investec on BHEL

  • Maintained ‘Sell’; cut price target to Rs 70 from Rs 75.
  • Ebitda Margins benefitted from lower than expected wage hike and forex gains.
  • Yet to see pick-up in execution pace; MoU targets do not inspire confidence.
  • Debtors continued to balloon and risk of write-off should not be overlooked.
  • Business environment is likely to remain challenging.

MOSL on BPCL

  • Maintained ‘Buy’ with a price target of Rs 568.
  • EBITDA above estimates led by core operating performance.
  • Net profit benefitted by higher other income and lower tax rate.
  • Stabilisation of Kochi expansion to expand Kochi refinery GRM.
  • Sharp correction offers an attractive opportunity to add.

CLSA on BPCL

  • Maintained ‘Sell’; raised price target to Rs 390 from Rs 375.
  • Strong marketing performance and higher inventory gains boost March quarter.
  • Weakness in marketing and refining margins to put pressure on Q1 results.
  • Concern about marketing margin to continue through election-heavy year.

CLSA on Power Grid

  • Downgraded to ‘Outperform’ from ‘Buy’; cut price target to Rs 237 from Rs 250.
  • Lower treasury & higher finance cost led the drag.
  • Capitalisation peaked in 2017-18, slowdown ahead.
  • Generation capex pick-up – key items to monitor.
  • Expect 30 percent compounded growth rate of regulated equity over FY18-21.

Credit Suisse on M&M

  • Maintained ‘Outperform’; raised price target to Rs 1,030 from Rs 970.
  • Q4 auto profitability continues to improve.
  • Operational performance surpassed estimates, led by operating leverage, product-mix and cost-control.
  • Strong 2018-19 outlook across segments.
  • Stock trades at attractive valuation.

Morgan Stanley on Coal India

  • Maintained ‘Underweight’ with a price target of Rs 245.
  • March Quarter key takeaway: Realisation surprise offset by higher overburden expenses.
  • Ebitda adjusted for wage hike below estimates.
  • Realisations improve on price hike and better e-auction prices.
BloombergQuint
Stay Updated With Stock Market News on BloombergQuint