Asian stocks traded mixed Thursday after holiday closures for U.S. equity and bond markets meant there were few leads overnight for traders.
Japanese shares slipped while those in Australia and South Korea pushed higher. U.S. futures pointed to gains. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,749.50 as of 6:50 a.m.
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Here’s a quick look at all that could influence equities today.
The euro erased losses on the chance of an earlier rate increase by the European Central Bank after a report that some policy makers were uneasy about expectations for a hike as late as December 2019.
- The Stoxx Europe 600 Index gained 0.1 percent.
- The euro was flat at $1.1658.
- The pound was little changed at $1.3226.
- Japan’s Topix Index fell 0.2 percent.
- Korea’s Kospi rose 0.4 percent.
- S&P/ASX 200 Index rose 0.4 percent.
- The yen fell 0.1 percent to 110.59 per dollar.
- West Texas Intermediate crude fell 0.1 percent to $74.05 a barrel.
- Brent crude snapped two-day decline, traded 0.4 percent lower at $77.90.
- Gold rose 0.1 percent to $1,256.24 an ounce.
- LME copper gained 0.4 percent to $6,414.50 per metric tonne.
- Steel traded lower; down 0.8 percent.
- Aluminium traded lower; down 0.4 percent.
- Zinc traded lower for second day; down 2.9 percent (lowest level in a decade).
- Copper traded lower for fifth day; down 0.9 percent (lowest level in over 3-months).
- Rubber traded lower for fifth day; down 1.5 percent.
Stories You Might’ve Missed
- The government announced the MSPs for the kharif season today.
- Once the hallmark of this bull run, complacency has made way for angst.
- Merkel warns of potential fallout from a trade war with the U.S.
- This is being billed as the world’s first all-digital museum is part art gallery.
- Indians’ love for gold is well known, but they have a new-found fascination for electronics.
- The tie-up with Roger Federer is just what Japanese retailer Uniqlo needs.
- Rationale that trade affects national security - Trump’s argument for the trade spat with China.
- South Korea may force sale of $14 billion in Samsung shares.
- Micron chip sales banned in China on patent case, UMC says.
- Jaguar Land Rover warns U.K. of $106 billion ‘Bad Brexit’ toll.
Here are some key events coming up this week:
- Federal Reserve releases minutes of its June 12-13 meeting, when FOMC policy makers raised the benchmark rate a quarter point for the second time this year and lifted the median forecast to four total increases in 2018.
- U.S. payrolls are due Friday.
- Also on Friday, the U.S. is scheduled to impose tariffs on $34 billion of Chinese goods. Beijing has said it will slap tariffs on an equal value on U.S. exports including agricultural and auto exports.
Stocks To Watch
- RIL to hold its annual general meeting today.
- Titan said jewellery business will post muted growth in June-ended quarter.
- Biocon’s sterile drug product facility received EU GMP certification.
- Yes Bank received SEBI approval to launch mutual fund business.
- Force Motors June total sales up 8.2 percent to 2,669 units.
- Nath Bio Genes (India) promoters released pledge on shares held by ARCIL after clearing all outstanding loans.
- Intellect Design Arena in pact with Banco Santander for implementation of its digital transaction banking platform.
- FIEM Industries partnered with Toyodeso, Japan and Toyota Tsusho, Japan for manufacturing of bank angle sensor for motorcycles in the Indian market.
- Future Lifestyle to acquire up to 29.9 percent in Koovs for Rs 140 crore.
- Religare files plea under IBC against Bharat Road Network claiming a default of Rs 51.3 crore.
- Va Tech Wabag to consider fund raising proposal on July 9.
- Seamec, in consortium with Kreuz Subsea, enters into $22 million deal with ONGC for charter hire of vessel.
- Som Distilleries & Breweries proposed arm acquires brewery in Odisha for Rs 46 crore.
- Cinnamon Capital sells 1.38 crore shares or 2.7 percent equity at Rs 471 each.
- Jasmine Capital Investments PTE buys 1.38 crore shares or 2.7 percent equity at Rs 471 each.
Who’s Meeting Whom
- Dilip Buildcon to meet investors on July 5.
- Puravankara to meet LIC Mutual Fund and other investors on July 5.
- Insecticides (India) to meet investors from July 5-6.
- Indian Bank to meet investors from July 5-6.
- Ramco Systems to meet HDFC Mutual Funds and other investors on July 5.
- DCM Shriram promoters acquired 2.61 lakh shares from July 2–3.
- Menon Bearings promoters acquired 27,000 shares from June 21–29.
- Infibeam Corporation promoters acquired 6.56 lakh shares from July 2–3.
(As reported on July 4)
- NDTV and Opto Circuits shifted to T group from B group.
- Nifty July futures closed trading at 10,771.3, premium of 1.4 points versus 24 points.
- July series: Nifty open interest up 4 percent and Bank Nifty open interest up 5.4 percent.
- India VIX ended at 12.6, down 2.6 percent.
- Max open interest for July series at 11,000 Call (open interest at 36.7 lakh, up 1 percent).
- Max open interest for July series at 10,600 Put (open interest unchanged at 51.7 lakh).
- Nifty PCR at 1.53 versus 1.50
- Nifty Bank PCR at 1.18 versus 0.78
- Rupee closed at 68.74/$ on Wednesday from 68.58/$ on Tuesday.
Macquarie on United Spirits
- Maintained ‘Underperform’ with a price target of Rs 443.
- Route to market changes in U.P. led to surge in volume run-rate in last three months.
- U.P. volumes to normalise going forward as share gains will be gradual.
- Expect advertisement spend to remain high and price hikes to be limited.
- United Spirits trade at a significant premium to peers.
Deutsche Bank on Shriram Transport Finance
- Maintained ‘Buy’ with a price target of Rs 1,700.
- Off balance sheet exposure to have limited impact on book value.
- Proper management communication is now critical to assuage concerns over corporate governance.
- Expect core operations to remain robust with strong growth momentum.
Daiwa Capital Markets on India Capital Goods
- New investments continue to decline.
- Private sector was key driver of new project announcements.
- New announcements largely driven by transport, power and manufacturing.
- See mixed signs of capex recovery.
- L&T is preferred pick.
Brokerages On Titan Quarterly Update
- June quarter preview has a weak commentary after several quarters.
- Jewellery was weak, but watches had a great quarter.
- Focus on new launches and expansion in retail footprint continues.
- Expect revenue and net profit to grow 12 percent and 10 percent respectively in April-June period.
- Maintained ‘Buy’ with a price target of Rs 1,061.
- Jewellery segment's performance below targets due to weakness in gold demand.
- Watches segment reported solid growth due to strength in modern retail and e-commerce.
- Expect revenue and Ebitda to grow at 9 percent and 10 percent respectively in June quarter.
Brokerages On MSP
- Elara: Government announces highest increase in MSP since the financial year-ended 2013; MSP hike to act as price signal and may boost output; CPI weighted rise at 1.6 percent, but actual impact could be lower at 50-60 basis points.
- Kotak: Quantum of hike in line; Modality of MSP implementation is more important for rural demand; Statistical impact on inflation to be 90-95 basis points, but real impact to around 40-60 basis points; Fiscal impact to be minimal.
- UBS: Price support to farmers bodes well towards improving rural demand; Expect 35-70 basis points impact on CPI inflation depending on procurement policy; Fiscal impact to be 0.1 percent of GDP in 2018-19.
- Citi: Pre-election trend of large MSP increase continues; MSP increases could result in 90 basis points higher CPI; Large MSP increase coupled with elevated core and high oil prices to push RBI MPC to consider 25 basis points hike in August.