Asian equity markets opened mixed, as a semblance of calm returned after a ratcheting up of trade tensions between the U.S. and China sparked a global sell-off on Tuesday.
Japan’s benchmarks fluctuated, while indexes advanced in Australia and South Korea. Futures on Hong Kong’s stock index were higher as the S&P 500 Index pared losses earlier, and futures on the U.S. benchmark climbed in Asia.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,702.50 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 fell, though major indexes traded well off session lows as a flare up in trade tensions eased to a simmer. Treasuries rose with the dollar.
- The yield on 10-year Treasuries was steady at 2.89 percent.
Europe Market Check
Europe stocks closed lower for the third day after the U.S. administration stepped up its trade rhetoric, pledging additional tariffs on Chinese goods.
- The euro decreased 0.3 percent to $1.1583, the weakest in three weeks.
- The British pound declined 0.5 percent to $1.3177, the weakest since November.
- Germany’s 10-year yield declined two basis points to 0.37 percent, its sixth straight decline.
- Britain’s 10-year yield decreased four basis points to 1.28 percent.
- Japan’s Topix index fell 0.3 percent.
- Australia’s S&P/ASX 200 Index rose 0.6 percent.
- Kospi index added 0.7 percent.
- Futures on the Hang Seng index added 0.4 percent.
- The S&P 500 futures gained 0.1 percent.
- The yen traded little changed at 110.02 per dollar.
- Gold was steady at $1,273.88 an ounce, near the weakest in six months.
- West Texas Intermediate crude rose 0.5 percent to $65.37 a barrel.
- Brent crude traded 0.1 percent higher at $75.17 a barrel.
- Aluminium ended 1.5 percent lower at $2,187.25 per metric ton.
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Here are some key events coming up this week:
- 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
- State Bank of India won’t be able to merge more banks with self (Bloomberg).
- UPL-led consortium is in exclusive talks to acquire Bill Ackman-backed Platform Specialty Products Corp. (Bloomberg)
- Cipla gets final approval for generic drug Sustiva.
- The wealth management arm of IIFL Holdings Ltd raises Rs 745.71 crore from investors including Ward Ferry, Amansa holdings, and HDFC Standard Life.
- DCM Shriram to buyback 55.55 lakh equity shares at Rs 450 each.
- Southern Petrochem signs pact with Indian Oil Corporation Ltd. for gas transportation.
- MPS Ltd. invests Rs 44 crore in the rights issue of subsidiary MPS Interactive Systems.
- Wheels India to consider bonus issue on June 22.
- Kansai Nerolac to acquire 55 percent stake in RAK Paints Ltd., Bangladesh for Rs 45.81 crore.
- SAIL supplies 60,000 tonne steel for railway project in Manipur.
- RITES Rs 460 crore IPO opens today. The state-run railway company to launch an initial public offering by selling 2.52 crore shares at Rs 180-185 apiece in the three-day offer. (More details here).
- Malabar India Fund bought 2.34 lakh shares or 0.7 percent equity at Rs 699.98 each.
- Panyaek Jainkijmanee sold 2 lakh shares or 0.6 percent equity at Rs 700 each.
Who’s Meeting Whom
- Inox Leisure to meet IIFL on June 21.
- TVS Motor to meet Goldman Sachs Asset Management on June 22.
- KDDL to meet BOBCAPS on June 20.
- Royal Orchid Hotels to meet Canara HSBC Life on June 20.
- Mercator to meet several fund houses including Motilal Oswal, Tata AMC, HDFC MF on June 20.
- Centrum Capital promoter BG Advisory Services LLP acquired 65,000 shares on June 15.
- Dhunseri Petrochem promoter Dhunseri Investments acquired 38,473 shares from June 15–18.
- Panama Petrochem promoter acquired 28,273 shares from June 15–18.
- Rupee closed near a one-month low at 68.38/$ on Tuesday from 67.99/$ on Monday.
- Nifty June Futures closed trading at 10,719.8, with a premium of 9.4 points versus a discount of 10 points.
- June series: Nifty open interest down 1 percent while Bank Nifty open interest unchanged.
- India VIX ended at 12.9, up 4.3 percent.
- Max open interest for June series at 11,000 Call (open interest at 53.3 lakh, up 14 percent).
- Max open interest for June series at 10,700 Put (open interest at 48 lakh, down 3 percent).
- In ban: Dewan Housing, Infibeam, Jet Airways
- Out of ban: Just Dial
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 1.47 versus 1.51
- Nifty Bank PCR at 0.80 versus 0.81
Stocks Seeing High Open Interest Change
IIFL on Motherson Sumi
- Maintained ‘Buy’ with a price target of Rs 425.
- Expect significant ramp-up over next 12 months from new plants.
- High level of automation implies significant operating leverage.
- Significant growth and margin improvement at SMP will be key driver.
Deutsche Bank On Voltas
- Upgraded to ‘Hold’ from ‘Buy’, hiked price target to Rs 490 from Rs 470.
- Stock declined 20 percent in past two months on weak commentary for AC sales.
- Lira depreciation by 20 percent in a year could benefit the launch of Voltbek.
- Projects business has started a reversal and strong orders.
- Voltas UCP implied valuations now look reasonable at 26 times FY20 PE.
Citi on Interglobe Aviation
- Maintained ‘Sell’; cut price target to Rs 1,070 from Rs 1,240.
- Elevated fuel costs only partially offset by higher yields.
- Current quarter’s margins could be under pressure.
- Pace of air traffic growth was lower; Too early to conclude that demand is slowing down.
Investec on Cement Sector
- See East region to emerge as the next South.
- Election linked demand trends aren’t encouraging.
- Even with affordable housing demand is insufficient to match supply.
- Margins to be at risk because of inflation.
- Prefer large-caps over mid-caps and North/Central, North-East players over South/East.
Nomura on GAIL (India)
- Maintained ‘Buy’; hiked price target to Rs 460 from Rs 450.
- Higher oil price improves outlook.
- Unbundling talks make case for unified tariff stronger.
- Petchem: could begin to surprise now.
- Key beneficiary of likely inclusion of natural gas in GST.
CLSA On Rural Economy
- Agri push from states in prominence apart from Central Government push.
- State governments too are doing their bit beyond farm loan waivers.
- Telangana has announced free power for farmers and a Rs4,000 per acre cash subsidy.
- Karnataka has announced a Rs5,000 per hectare cash subsidy in certain areas.
- Haryana implements Madhya Pradesh’s minimum support price scheme.
- Uttar Pradesh has upped the procurement volume of potatoes.
- Monsoon season has been just about normal thus far.
- Rural consumption picks: M&M, ITC, Emami, Crompton and Dabur.