All You Need To Know Going Into Trade On June 13

Asian stocks traded mixed Wednesday following a lackluster session in the U.S. as investors turned their attention to the major central bank meetings this week after shrugging off Tuesday’s North Korea summit.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,827 as of 7:05 a.m.

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BQ Live

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

U.S. Market Check

• U.S. stock indexes finished higher in listless trading Tuesday as investors put the U.S.-North Korea meeting in the rear-view and looked forward to this week’s big central bank decisions.
• The yield on 10-year Treasuries held around 2.96 percent.

Europe Market Check

• European shares declined after few specifics emerged from a meeting between President Donald Trump and North Korean leader Kim Jong Un.
• The U.S.-North Korean summit and last weekend’s rancorous G-7 meeting have yielded the spotlight to central banks, with a seemingly certain Federal Reserve rate increase on Wednesday, plus the prospect of a hawkish European Central Bank tilt on Thursday.

Asian Cues

• Japan’s Topix index rose 0.4 percent.
• Australia’s S&P/ASX 200 Index lost 0.3 percent.
• Hang Seng Index futures declined 0.4 percent.
• S&P 500 futures rose 0.2 percent.

Commodity Cues

• West Texas Intermediate crude fell 0.6 percent to $65.95 a barrel after gaining for two days.
• Brent crude traded 0.4 percent lower at $75.59 per barrel.
• Gold was little changed at $1,295.36 an ounce.
• Aluminium ended a little changed at $2,308 per metric tonne.

Fuel Price Update

• Petrol and diesel prices were unchanged today. Petrol costs Rs 84.26 in Mumbai and diesel costs Rs 72.24, according to the data available on Indian Oil Corporation Ltd.’s website.

Stories You Might’ve Missed

• Government to revise road map for Air India sale after first attempt ended with zero bids.
• Trump’s historic summit with Kim Jong Un was unquestionably a success -- for Kim.
• Hosting the World Cup barely has any economic significance
• At Russia’s first World Cup, China Inc.’s all over the pitch.
• Asian central bankers are getting relief from an old foe: food prices.
• Chinese serial entrepreneur Lei Jun has been compared with Steve Jobs. Now it’s the turn of his company.

Here are some key events coming up this week:

• The Federal Reserve is expected to raise interest rates Wednesday as the U.S. economy remains solid.
• The European Central Bank rates decision comes Thursday with a briefing from President Mario Draghi.
• The Bank of Japan June monetary policy decision and news conference is Friday.
• FIFA expects more than 3 billion viewers for the World Cup that begins this week in Russia.

Stocks To Watch

• Sun Pharma receives Establishment Inspection Report from U.S. FDA for Halol facility. (Here’s what it means)
• Tata Consultancy Services’s board to consider buyback proposal at June 15 meeting.
• Page Industries says license pact with Jockey extended until December 2040.
• Premier resumes operations at Pune plant following workers’ unrest.
• Alok Industries says NCLT asks resolution professional to present resolution plan to lenders.
• Bharat Forge acquires 35.26 percent stake in U.K.’s Tevva Motors for £10 million.
• Nitin Spinners says committee to meet on June 15 to approve issue price for preferential allotment.
• Adani Wilmar identified as highest bidders for Ruchi Soya.
• Federal Bank agrees to acquire 19.98 percent in Equirus Capital.
• Yes Bank reappointed Rana Kapoor CEO for further period of three years effective Sept. 1.
• PNB board meeting on June 15 to consider proposal for issuance of upto 10 crore equity shares to its employee under ESOPs.

Indian ADRs

Top Gainers And Losers

Corporate Actions

• Pincon Lifestyle and Kapil Raj Finance shifted out of ASM.
• Usha Martin circuit filter revised to 10 percent.
• Caplin Point Laboratories circuit filter revised to 5 percent.
• L.G. Balakrishnan & Bros. Ltd. last trading day before ex-bonus.

Who’s Meeting Whom Today

• PI Industries to meet ICICI Prudential Mutual Fund on June 13.
• Advanced Enzymes to meet Baron Funds, Dalton Investments and other investors from June 13 – 15.
• Eris Lifesciences to meet Baring Private Equity Partners on June 13.

Insider Trades

• Centrum Capital promoter BG Advisory Services LLP acquired 10,000 shares on June 8.
• Panama Petrochem promoter acquired 24,624 shares from June 7 – 11.
• Nandan denim promoter Vedprakash Chiripal acquired 50,000 shares on June 7.
• Intellect design arena promoter Polaris Banyan Holding acquired 1 lakh shares from June 8 – 11.

Economic Data

• May CPI at 4.87 percent versus 4.58 percent (MoM); Est 4.90 percent.
• April IIP at 4.9 percent versus 4.4 percent (MoM); Est 5.70 percent.

Money Market Check

• Rupee closed at 67.49/$ on Tuesday versus 67.43/$ on Monday.

Bulk Deals

• Uttam Galva Steels: Asia Investment Corporation (Mauritius) Ltd sold 10 lakh shares or 0.7 percent equity at Rs 11.45 each.

KSK Energy Ventures

• Mentor Capital bought 30 lakh shares or 0.7 percent equity at Rs 2.48 each.
• Oriental Bank of Commerce sold 23.23 lakh shares or 0.5 percent equity at Rs 2.38 each.
• Societe Generale sold 52.35 lakh shares or 1.2 percent equity at Rs 2.46 each.

F&O Cues

• Nifty June Futures closed trading at 10,839 discount of 3.7 points versus 1 points.
• June series-Nifty open interest up 2 percent & Bank Nifty open interest up 3.3 percent.
• India VIX ended 12.7, down 3.4 percent.
• Max open interest for June series at 11,000 Call, open interest at 38.3 lakh, open interest down 3 percent.
• Max open interest for June series at 10600 Put, open interest at 50.6 lakh, open interest up 2 percent.

F&O Ban

• In ban: Dewan Housing, Balrampur Chini, Jet Airways, Just Dial
• New in ban: Just Dial
• Out of ban: None

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 1.59 versus 1.53
• Nifty Bank PCR at 1.00 versus 0.89

Fund Flows

Brokerage Radar

Macquarie on KEC International

• Initiated ‘Outperform’ and a price target of Rs 454.
• Play on railway electrification opportunity in India.
• Power T&D to witness stable growth.
• RoE of +20 percent to sustain; Leverage to come down further.
• Expect revenue and net profit to compound at 13 percent and 21 percent over the fiscal 2018-2021.
• Multiple catalysts in place, deserves premium.

IDFC Securities on Sun Pharma

• Maintained ‘Outperform’ with a price target of Rs 574.
• Receipt of Halol EIR is major positive development for Sun’s U.S. business.
• EIR underlines that the phase of FDA compliance related challenges is largely behind.
• Growth trajectory of speciality portfolio will remain key monitorable.
• Sun is clearly best placed amongst large domestic peers.

Morgan Stanley on Sun Pharma

• Maintained ‘Underweight’ with a price target of Rs 448.
• Halol clearance on expected lines.
• New ANDA approvals held back for last three years should commence.
• Sun should be able to gradually increase sales for the current portfolio.

Citi on Maruti

• Maintained ‘Buy’ with a price target of Rs 10, 700.
• Agree with management assessment of double-digit volume growth for 2018-19.
• Share gains in PV cars have more than offset the slippage in UVs.
• Well balanced growth, in both rural and urban with strong dealer network.

Citi on Reliance Industries

• Maintained ‘Buy’; raised price target to Rs 1,180 from Rs 1, 150.
• Period of consolidation YTD provides an attractive entry point.
• Higher crude has improved economics of petcoke gasification to benefit.
• Next telco event to watch out is FTTH & enterprise launch.
• Top large-cap pick in Indian oil & gas space.

Goldman Sachs on IT Sector

• Reduce EPS estimates for HCL Tech given challenges in IMS.
• Maintain Buy on Tech Mahindra, Mphasis and Infosys; Sell on Wipro.
• 5G remains a key structural growth opportunity yet to be priced in for Tech Mahindra.
• Infosys is trading at a sharp discount to TCS, despite having similar growth profile.
• Positive stance on Mphasis reflects strong deal momentum in direct channel.
• Weak execution, client losses and challenges in healthcare not in valuation.

Nomura on NTPC

• Maintained ‘Buy’ with a price target of Rs 200.
• Plant load factor of thermal capacity was 73.7 percent in May-2018, down 170 basis point on a monthly basis and 120 basis points on a yearly basis.
• PLF dragged lower largely due to accident-triggered outage and planned outages.
• 15.7GW capacity across eight plants had less than a week’s coal inventory in May.

HSBC on ICICI Lombard

• Maintained ‘Reduce’ with a price target of Rs 620.
• Multi-year policies could result in reserving risks.
• Impact of hike in compensation limits likely to be muted.
• Biggest upside risk is passage of Motor Vehicles bill.

IDFC Securities on Hikal

• Hybrid business model provides competitive advantage.
• Pharma: healthy volumes drive growth.
• Agrochemicals - new product launches to drive growth.
• Management expects margins to improve and FCF to turn positive.

Morgan Stanley on TCS

• Maintained ‘Overweight’; raised price target to Rs 2,010 from Rs 1,825.
• Positives: strong global growth, US economy doing well, digital adoption and rupee depreciating.
• Expect margins can move toward 26-28 percent.
• Raised EPS estimates by 4-5 percent to factor gains from rupee depreciation.
• Valuation should reflect superior profile.