Traders work on the trading floor. (Photographer: Michael Nagle/Bloomberg)

All You Need To Know Going Into Trade On June 5

Asian stocks struggled for traction Tuesday after pacing a global rally as investors set aside protectionist fears in favour of optimism over the U.S. economy.

Stocks edged higher in Japan, were little changed in South Korea and fell in Australia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.3 percent lower at 10,584 as of 7 a.m.

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U.S. Market Check

  • U.S. stocks reached the highest since mid-March, tracking peers in Europe and Asia as optimism over the world’s largest economy helped investors put protectionist fears to one side.
  • The yield on 10-year Treasuries fell less than one basis point to 2.94 percent.

Europe Market Check

  • European shares extended a rebound from last week’s selloff amid optimism over U.S. economic growth.

Asian Cues

  • The MSCI Asia Pacific Index fell less than 0.05 percent.
  • Topix index rose 0.1 percent.
  • Kospi index fell 0.1 percent.
  • Australia’s S&P/ASX 200 Index fell 0.6 percent.
  • Futures on the S&P 500 Index rose less than 0.05 percent.

Commodity Cues

  • West Texas Intermediate crude rose 0.4 percent to $65.03 a barrel.
  • Brent crude traded 0.2 percent higher at $75.45 a barrel.
  • Gold rose less than 0.05 percent to $1,292.47 an ounce.
  • LME copper rose 0.2 percent to $6,987.00 per metric ton.

Fuel Price Check

Petrol and diesel prices were cut by 12 paise and 10 paise respectively today. Petrol now costs Rs 85.65 in Mumbai and diesel costs Rs 73.33, according to the data available on Indian Oil Corporation Ltd.’s website.

Stories You Might’ve Missed

  • Indian Army will place an order for just a third of its total requirement driven by budgetary constraints.
  • India’s media and entertainment market is estimated to increase to $30 billion by 2020.
  • Insolvent companies: SEBI makes way for easier delisting.
  • Donald Trump’s presidential privilege may be tested if Mueller gets subpoena.
  • The trash snacks and fast-food guilty pleasures of top chefs.
  • The Masterpiece Cakeshop decision is also important for what it did not say, but only implied.
  • Microsoft reached agreement to buy code repository company GitHub.
  • Apple Inc. is giving the software that runs iPhones and iPads a needed overhaul.

Also Read: Takeaways From Apple’s Worldwide Developers Conference Keynote

Here are some key events coming up this week:

  • Reserve Bank of Australia monetary policy decision is out Tuesday.
  • Tesla holds its annual shareholder meeting also Tuesday.
  • U.S. ISM non-manufacturing index out Tuesday. Growth at U.S. service industries probably improved in May for the first time in four months, indicating the economy is strengthening after a first-quarter slowdown, economists forecast.
  • Reserve Bank of India rate decision on Wednesday.
  • U.S. trade balance and Australia GDP also out on Wednesday.
  • On Thursday, Japanese Prime Minister Shinzo Abe meets with
  • U.S. President Trump at the White House to discuss the planned
  • U.S. summit with North Korea’s Kim Jong Un.
  • Also on Thursday, euro-zone GDP.
  • Turkey rate decision is due on Thursday.
  • G-7 Leaders’ Summit starts in Quebec Friday through to June 9.

Also Read: The Rate Debate: Will The MPC Be As Divided As Economists?

Stocks To Watch

  • Biocon and Mylan's Biosimilar Pegfilgrastim received U.S. FDA approval.
  • Idea Cellular get approval from DoT to increase FDI limit from 67.5 percent to 100 percent.
  • Maruti Suzuki’s total production up 22 percent to 1.84 lakh units in May.
  • Reliance Communications won’t pay interest on NCD to JLF until restructuring process ends.
  • Vedanta will add 1.5 MTPA of iron ore production with potential up to 2.5MTPA to its capacity after ESL acquisition.
  • Sudarshan Chemicals divests its plastic masterbatch business- Prescient Color Ltd. and plans to invest Rs 1000 crore over next 5 years.
  • Sunteck Realty increases its investment limits by RPFI/FII from 24 percent to 49 percent.
  • GE Shipping gets contract to sell its Bulk Carrier of 52,200 deadweight tonnage.
  • Lupin receives U.S. FDA approval for Nystatin and Triamcinolone Acetonide Cream USP, used in the treatment of cutaneous candidiasis. Has market size of $62.2 million annually.

Other Corporate Announcements

  • Weizmann Forex to buyback 4.4 lakh shares (3.77 percent) at price Rs 702 each aggregating to Rs 30.64 crore.
  • MCX completes deal to acquire 24 percent in CDSL Commodity Repository.
  • Jagran Prakashan to buyback 1.5 crore shares (4.82 percent) at Rs 195 each aggregating to Rs 292.5 crore.
  • NIIT enters into 5year agreement with Pitney Bowes for Learning and Development.
  • WestBridge Crossover Fund LLC invests Rs 64.5 crore in Kajaria Ceramics.
  • SBI fined Rs 7 crore by ED for irregularities in Foreign Remittances during March 2009 to August 10.

Indian ADRs

Bulk Deals

  • Shankara Building Products: Alliant Techsystems Trust sold 1.17 lakh shares or 0.5 percent equity at Rs 1535.15.
  • Sarda Energy and Minerals: Asia Mineral Ltd. sold 2.65 lakh shares or 0.3 percent equity at Rs 398.

Who’s Meeting Whom

  • Greenlam Industries to meet HDFC AMC, ICICI Pru Life, IIFL and Others from June 5-6.
  • TATA Chemicals to meet Baron Capital Management Inc on June 5.
  • Indian Hotels Co to meet Wells Capital MA, Value Partners Ltd and Others on June 6.
  • Allcargo Logistics to meet HDFC AMC, Pabrai Funds and L&T MF on June 6.

Insider Trades

  • West Coast Papers Mills promoter Veer Enterprise Ltd acquired 6,000 shares on 1st June.
  • Fiberweb (India) promoter and director Pravin V Seth acquired 10,000 shares on June 4.
  • Bhumika Desai of Future Consumer buys 51,000 shares on May 29.

(As reported on June 4)

Trading Tweaks

  • TCS bonus shares allowed to trade on exchanges.
  • Lanco Infratech and Monnet Ispat and Energy shifted to T group.
  • Leel Electricals, Caplin Point Laboratories circuit filter revised to 10 percent.
  • Avantel and Kwality circuit filter revised to 5 percent.
  • Indiabulls Real Estate buyback worth Rs 624 crores opens today.
  • Pitti Laminations Ltd. name changed to Pitti Laminations Ltd.
  • Gruh Finance last trading day before ex date for bonus .

Money Market Check

  • Rupee closed at 67.12 /$ on Monday versus 67.06/$ on Friday.

Top Gainers And Losers

F&O Cues

  • Nifty June Futures closed trading at 10,598.7, discount of 29.8 points versus 12.3 points.
  • June series-Nifty open interest up 4 percent and Bank Nifty open interest down 4 percent.
  • India VIX ended 13.8, up 2.3 percent.
  • Max open interest for June series at 11,000 Call, open interest at 39.7 lakh, open interest up 7 percent.
  • Max open interest for June series at 10200 Put, open interest at 35.3 lakh, open interest up 11 percent.

F&O Ban

  • In Ban: None

Active Stock Futures

Put-Call Ratio

  • Nifty PCR at 1.39 versus 1.47.
  • Nifty Bank PCR at 0.60 versus 1.39.

Fund Flows

Brokerage Radar

Investec on Shriram Transport Finance

  • Downgraded to ‘Sell’ from ‘Buy’; raised price target to Rs 1,500 from Rs 1,340
  • Used commercial vehicles pool to see muted growth.
  • New BS-IV vehicles are structurally efficient.
  • Vehicle scrappage policy could drive growth.
  • Believe that fundamentals are weak, especially on growth, over longer term.

Morgan Stanley on InterGlobe Aviation

  • Maintained ‘Equal-weight’ with a price target of Rs 1,205.
  • Airfare tracker indicates yields to remain weak in the current quarter.
  • Airline not raising fares enough to offset rising fuel prices.
  • September quarter to be weak because of seasonally weak demand.
  • Industry hoping yield recovery to start in the second half of this financial year with start of festive season.

Credit Suisse on Indian IT

  • IT sector outperforming due to low institutional ownership, high valuations in other sectors, hope of growth pick-up and Rupee depreciation.
  • Fundamentals have not necessarily kept up for the larger companies.
  • Mid-sized companies have witnessed significant upward revisions in 2018-19 estimates.
  • Tech Mahindra, HCL Tech, Persistent and Cyient are key stock picks.
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