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

All You Need To Know Going Into Trade On June 26

Asian equities extended a decline in global stocks, and the yen appreciated, as investors continued to worry about an escalating exchange of trade and investment restrictions, triggered by the Trump administration.

Shares opened lower in Japan and fell in Australia and South Korea, while futures signaled losses for Hong Kong equities after the S&P 500 Index had its biggest slide since April and European bourses declined.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.3 percent lower at 10,726 as of 7:20 a.m.

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

Also Read: China Begins to Question Whether It’s Ready for a Trade War

U.S. Market Check

  • Escalating trade tensions sent U.S. stocks to the steepest drop since early April, as President Donald Trump’s threats of more protectionism against major partners were met with Chinese and European vows of retaliation.
  • The yield on 10-year Treasuries held at 2.88 percent.

Also Read: China Begins to Question Whether It’s Ready for a Trade War

Europe Check

  • European stocks retreated, led lower by commodity-linked sectors, as investors weighed the trade spat between the U.S. and China, and as Italian shares dropped after the League party continued to solidify support.
  • The euro bought $1.1702.
  • The pound traded at $1.3278.
  • Germany’s 10-year yield declined one basis point to 0.33 percent, the lowest in almost four weeks.
  • Britain’s 10-year yield decreased one basis point to 1.308 percent.

Asian Cues

  • Japan’s Topix index fell 0.5 percent.
  • Australia’s S&P/ASX 200 Index lost 0.6 percent.
  • Kospi index lost 0.7 percent.
  • Futures on Hong Kong’s Hang Seng index slid 0.7 percent.
  • S&P 500 futures were little changed.
  • The MSCI Asia Pacific Index was down 0.2 percent.

Commodity Cues

  • West Texas Intermediate crude rose 0.3 percent to $68.30 a barrel.
  • Gold rose 0.1 percent to $1,266.80 an ounce.
  • LME copper fell 0.6 percent $6,718 a metric ton.
  • Nickel halted three-day advance and closed 3.5 percent lower.
  • Zinc declined for the eighth day in a row.

Indian ADRs

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Here are some key events coming up this week:

  • German Chancellor Angela Merkel holds private talks with leaders of the other parties in her coalition government on refugee policy and euro-area reforms in Berlin Tuesday.
  • New Zealand and Indonesia monetary policy decisions on Thursday.
  • U.S. personal spending probably increased in May for a third month, economists forecast ahead of Friday’s data.
  • China manufacturing and non-manufacturing PMI are due on Saturday.

Stocks To Watch

  • Ratnamani Metals & Tubes received pipes order worth Rs 125.51 crore.
  • Info Edge and Soft Bank arm to jointly invest $45 million each for 8.93 percent stake in Etechaces.
  • Jet Airways entered another agreement with the Boeing Company for 75 Boeing MAX Aircraft.
  • NOCIL commissioned phase 1 of expansion of rubber chemical plant in Navi Mumbai.
  • United Spirits acquired 26 percent stake in digital payments company Hip Bar for Rs 27 crore.
  • Oil India discovered second hydrocarbon reserve in KG Basin, Andhra Pradesh.
  • 5paisa Capital increased foreign portfolio investor limit to 100 percent, NRI investment limit up to 24 percent.
  • Fortis board meeting adjourned as the ongoing discussions on the annual accounts requires further deliberation. Meeting to be re-convened today.
  • Karur Vyasa Bank to issue bonus shares in the ratio 1:10. It has also fund raising of Rs 1,200 crore.

Bulk Deals

Tube Investments of India

  • Promoter Ambadi Investments Ltd. sold 16.15 lakh shares or 0.88 percent equity at Rs 222 each.
  • Enam Securities Pvt Ltd. acquired 11.7 lakh shares or 0.64 percent equity at Rs 222 each.

Who’s Meeting Whom

  • Lemon Tree Hotels to meet investors from June 26-27.
  • Galaxy Surfacants to meet investors from June 26-29.
  • Future Lifestyle Fashions to meet investors from June 26-27.

Insider Trades

  • Raymond promoter JK Investors (Bombay) Ltd. acquired 16,000 shares from June 20-21.
  • Centrum Capital promoter group acquired 1.2 lakh shares on June 21.
  • Cosmo Films promoter acquired 6,700 shares from June 21-22.

(As reported on June 25)

Trading Tweaks

  • Avanti Feeds ex date for stock split to Re 1 from Rs 2 per share and 1:2 bonus issue.
  • Container Corporation Of India Ltd. ex date for stock split to Rs 5 from Rs 10 per share. F&O lot size revised to 1250.
  • The New India Assurance Company Ltd. last trading day before going ex bonus.
  • Filatex India last trading day before stock split.

New Offerings

  • Varroc Engineering IPO opens at an issue price of Rs 965-967 per equity share.

Also Read: Varroc Engineering IPO: Here’s All You Need To Know

Rupee

  • Rupee closed at 68.13/$ on Monday from 67.83/$ on Friday.

F&O Cues

  • Nifty futures end trade at 10758, discount of 4 points versus premium of 12 points earlier.
  • Nifty futures add 11.8 lakh shares in open interest.
  • Nifty Bank futures shed 1.6 lakh shares in open interest.
  • Max open interest for June series at 11,000 Call, open interest at 54.9 lakh.
  • Max open interest for June series at 10,700 Put, open interest at 46.9 lakh.

F&O Ban

  • In ban: DHFL, JP Associates, Infibeam, CG Power, IDBI, Wockhardt.
  • New in ban: Wockhardt.

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 1.48 from 1.65
  • Nifty Bank 0.89 from 1.09

Fund Flows

Brokerage Radar

Jefferies on Shoppers Stop

  • Maintained ‘Buy’ with a price target of Rs 660.
  • Management looking at improvement in private label mix & increasing share of beauty products.
  • Strategy includes instore customer experience, customer service and omni channel.
  • Management maintains guidance of 100 basis points improvement in margins in current and the next financial year.
  • Company will be cutting down the sale season to six weeks from eight weeks in 2018-19.

Deutsche Bank on Axis Bank

  • Maintained ‘Buy’ with a price target of Rs 580.
  • Axis is entering a stronger and more durable growth environment.
  • Corporate, SMEs and retail will remain strong while NPLs have peaked.
  • Management confident that worst of asset quality is behind.
  • Slippages to decline sharply; normalised credit cost trends from April 2020 onwards.
  • Valuations are at lower than the past five-year average.

Motilal Oswal on Phoenix Mills

  • Maintained ‘Buy’ with a price target of Rs 757.
  • Mall additions brighten rental prospects.
  • Higher space allocation toward F&B by resizing/adding mall space.
  • Positives: strong operational performance, scalability and robust cash generation.

CLSA on Ultratech

  • Maintained ‘Buy’ with a price target of Rs 5,000.
  • Significant year due to acquisition and integration of JPA units.
  • Balance sheet turned net debt again but at comfortable levels.
  • Industry to focus on profitability after volume chase in the previous financial year.
  • Management expects 8 percent industry demand growth.

CLSA on Phoenix Mills

  • Maintained ‘Buy’; raised price target to Rs 771 from Rs 757.
  • Project acquisition spree provides path to doubling lease income.
  • More malls, office developments to double leasable area.
  • Expect 12 percent compounded growth rate in lease income over FY18-24
  • Growth well-funded with private equity JV likely to do the bulk of the spending.

Morgan Stanley on Info Edge

  • Maintained ‘Overweight’ with a price target of Rs 1,900.
  • Investment in Etechaces (Policybazaar) signifies company's appetite to go for larger deals.
  • Post this fund raising implied valuation of Etechaces would be over $1 billion.
  • Value assigned to Info Edge's stake goes up to Rs 63 per share from Rs 26.
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