Asian stocks declined amid investor concern the exchange of threats between China and the U.S. is the precursor of a full-blown trade war.
Stocks fell in Japan as the yen advanced, while S&P 500 Index futures pointed to losses. South Korean equities also slipped , while they fluctuated in Australia. China and Hong Kong, markets more sensitive to deepening trade tensions, were closed for holidays.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.5 percent lower at 10,775.50 as of 7:50 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- Stocks fell on the final day of a week that included the U.S.-North Korea summit, major central bank meetings and escalating trade tensions between Washington and Beijing.
- The S&P 500 Index declined in heavy trading on a quadruple-witching Friday, a quarterly event when futures and options contracts on indexes and individual stocks expire.
Europe Market Check
- European stocks dropped as news that the U.S. will impose tariffs on $50 billion of Chinese imports trickled through to the markets, extending losses after President Donald Trump threatened China with further measures.
- The Topix index fell 0.8 percent.
- Australia’s S&P/ASX 200 Index was little changed.
- Kospi index fell 0.2 percent.
- S&P 500 Index futures lost 0.4 percent.
- The MSCI Asia Pacific Index declined 0.5 percent.
- West Texas Intermediate crude decreased 1.2 percent to $64.30 a barrel, adding to a 2.7 percent slide on Friday.
- Gold rose 0.2 percent to $1,281.71 an ounce.
- Brent crude traded 0.5 percent lower at $73.04 a barrel.
- LME copper lost 0.1 percent to $7,013 per metric ton, after sinking 2.2 percent on Friday.
- Aluminium ended 2.6 percent lower at $2,206 per MT.
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Here are some key events coming up this week:
- On Monday, the U.K. House of Lords takes up the Brexit withdrawal bill after dramatic votes in the Commons, with details likely to emerge on the amendment that quelled a revolt by pro-EU Conservatives.
- European Central Bank President Mario Draghi speaks at ECB’s Forum on Central Banking on Tuesday.
- U.S. housing starts probably rose in May, data out Tuesday is expected to show.
- Draghi, Reserve Bank of Australia Governor Philip Lowe, Bank of Japan Governor Haruhiko Kuroda, and Fed Chairman Jerome Powell join a panel on central bank policy in Sintra, Portugal, on Wednesday.
- Thailand, Philippines and Brazil central bank decisions due Wednesday.
- Bank of England rate decision on Thursday.
- Also on Thursday: U.S. jobless claims, New Zealand GDP, South Korea export data.
- The Organization of Petroleum Exporting Countries meets in Vienna on Friday.
Stocks To Watch
- Vedanta will replace Dr. Reddy’s as part of the Sensex from today.
- U.S. court restrains Dr Reddy’s from selling generic variant of Suboxone.
- PNC Infratech says lowest bid for Purvanchal Expressway cancelled.
- NBCC expects 40 percent revenue growth in FY19; Eyes Africa contracts.
- Panacea Biotech along with partner Apotex settle patent dispute with Celgene Corp.
- Avana Logistek, an associate company of Shreyas Shipping, files DRHP with SEBI for IPO.
- HCL Infosystems concludes sale of entire stake in HCL Services to Karvy Data Management Services.
- Kanoria Chemicals and Industries to set up Formaldehyde plant with 1 lakh tonne per annum in Andhra Pradesh.
- ICICI Bank Board may name Sandeep Bakshi as ICICI Bank Interim CEO: (Economic Times)
- Telecom Department may clear Vodafone-Idea merger on Monday (PTI).
- Tata Steel: Thyssenkrupp shareholders are said to be sceptical of Tata deal
Also Read: TCS Announces Rs 16,000-Crore Buyback, Again
Top Gainers And Losers
- Panama Petrochem promoter acquired 20,211 shares from June 12-14.
- Century Plyboards promoter Vishnu Khemani acquired 10,505 shares from June 14-15.
- KM Sugar Mills promoter Uma Devi Jhunjhunwala sold 30,924 shares on June 15.
- Vardhman Special Steels promoter Sachit Jain acquired 10,000 shares from June 13-14.
(As reported on June 15)
Who’s Meeting Whom
- Rallis India to meet Tattva Capital and Enam Asset Management from June 18-22.
- Wabco India to meet investors on June 19.
- Voltas to meet ICICI Securities, Kotak Securities and other investors from June 19-20.
- TVS Motor to meet JP Morgan India on June 19 and White Oak Capital on June 27.
- Pokarna: Ashish Kacholia sold 3.60 lakh shares or 1.2 percent equity at Rs 177.9 each.
- Balrampur Chini: California Public Employees Retirement System bought 12.20 lakh shares or 0.5 percent equity at Rs 73.84 each.
- Torrent Pharma: Lavender Investments sold 9.01 lakh shares or 0.5 percent equity at Rs 1475 each.
- Indiabulls Real Estate: Indiabulls Real Estate bought 26 lakh shares or 0.5 percent equity at Rs 172.79 each.
- Vakrangee: Baron Emerging Markets Fund sold 1.02 crore shares or 1 percent equity at Rs 41.5 each.
- CIL Nova Petrochemicals: Asia Investment Corporation Mauritius bought 1.40 lakh shares or 0.5 percent equity at Rs 29 each.
- Nifty June Futures ended at 10,814.6, with a discount of 3 points versus premium of 5.9 points.
- June series- Nifty open interest (OI) up 3 percent and Bank Nifty OI down 3 percent.
- India VIX ended at 12.07, down 0.2 percent.
- Max OI for June series call at 11,000 strike price call option, OI at 43.5 lakh shares, up 5 percent.
- Max OI for June series put at 10,700 strike price put option, OI at 48 lakh shares, down 3 percent
- In ban: Dewan Housing, Jet Airways, Just Dial
- Out of ban: Balrampur Chini
- New in 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.
- Nifty PCR at 1.57 versus 1.54
- Nifty Bank PCR at 0.76 versus 0.87
Motilal Oswal on TCS
- Maintained 'Neutral' with a price target of Rs 1,750
- Buyback slightly negative on EPS; positive on return ratios.
- To return 40 percent of cash to shareholders.
- 75 percent payout maintained historically.
- Acceptance likely to be high on retail.
CLSA on Midcap Strategy
- Prefer stocks with growth visibility.
- Consumer discretionary and building materials space have seen strongest earnings .
- Like hotels as a cyclical recovery play.
- Key Buy: Apollo, Arvind, Godrej properties, Havells, Jubilant, Lemon Tree, Prestige and Ramco Cement.
- Key Sell: Pidilite and Voltas.
Morgan Stanley on Dr. Reddy's Lab
- Maintained ‘Overweight’ with a price target of Rs 3,465.
- Received temporary restraining order from U.S. District Court on gSuboxone.
- Winning PI motion over the next few weeks will be important.
- Expect earnings recovery led by complex launches in the U.S., momentum in EM business, and scaling up IP portfolio.
Credit Suisse on L&T
- Maintained ‘Outperform’ with a price target of Rs 1,700.
- Exceptionally strong domestic inflows continue.
- Private sector ordering still continues to be low in single digits.
- Expect very strong inflows, execution pick up, steady profitability across segments.
- Valuations still look reasonable.
- Investment cycle is building up can add upside visibility.