All You Need To Know Going Into Trade On July 9
Asian stocks gained, building on a positive Friday session for global equities, as investors watched for developments in trade tensions between China and the U.S. before earnings season gets underway later this week.
Shares in Japan, South Korea and Australia nudged higher, while Hong Kong futures pointed to gains. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 10,769 as of 7:00 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 rose in light trading Friday as biotech shares drove gains following a report that Biogen Inc’s Alzheimer’s drug showed postive results in a large clinical trial.
- All major U.S. equity benchmarks were higher.
- Meanwhile, the dollar held near a three-week low today.
- European stocks drifted higher, with defensive plays such as utilities among the leaders, underscoring the cautious mood.
- Deutsche Bank AG rose on speculation of takeover bids.
- The Bloomberg Dollar Spot Index fell 0.1 percent to the lowest since early June.
- The euro traded at $1.1751.
- The British pound was up 0.1 percent at $1.3298 after rising as much as 0.4 percent earlier.
- The Japanese yen was flat at 110.43 per dollar.
- Japan’s Topix index advanced 0.3 percent as of 9:03 a.m. in Tokyo.
- Australia’s S&P/ASX 200 Index and South Korea’s Kospi both rose 0.1 percent.
- Hang Seng futures advanced 1 percent.
- Futures on the S&P 500 gained 0.1 percent after the underlying gauge closed 0.8 percent higher on Friday.
- The Bloomberg Commodity Index rose 0.8 percent Friday.
- West Texas Intermediate crude rose 0.1 percent early Monday to $73.87 a barrel.
- Gold advanced 0.1 percent to $1,256.43 an ounce.
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These are some events to look out for this week:
- The NCLT to pronounce order on Tata-Mistry case at 10:30am.
- European Central Bank President Mario Draghi addresses the European Parliament on Monday and may shed light on the timing of a rate increase next year.
- Chinese trade data due at the end of the week will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said. China releases June PPI and CPI on Tuesday, both of which should show a pickup.
- The most noteworthy U.S. data is the June inflation report on Thursday, which consensus expects will show both headline and core price growth picking up. There’s another deluge of Treasury debt sales too, with a total $156 billion of notes and bills offered.
- Earnings season gets going with JPMorgan Chase & Co. and Citigroup among the largest companies due to give results, as well as India’s Infosys Ltd.
Earnings To Watch
- Dish TV
- Uttam Galva Steels
Stocks To Watch
- PNB invites bids to sell 3 NPA accounts to recover over Rs 136 crore (PTI)
- IHH may have won Fortis Healthcare with Rs 4,700-5,400 crore bid (Mint)
- Thyssenkrupp board accepts CEO resignation, backs Tata Steel JV (PTI)
- Shriram group may merge two of its listed non-banking finance companies (Business Standard)
- Maruti Suzuki June total production up 12 percent at 132,616 units versus 118,667 units
- Tata Steel Q1 update: Crude steel sales up 8 percent at 2.97 MT, production up 7.8 percent at 3.17 MT
- Sterlite Technologies to acquire Italian optical cable manufacturer company for 47 million euros
- Goa Carbon Salcete’s Goa plant operations suspended for maintenance
- Total iron ore output up to June at 6.87 MT versus 8.52 MT (YoY)
- Total iron sales (provisional) up to June at 6.84 MT versus 9.21 MT (YoY)
- Varroc Engineering: Nomura acquired 11.1 lakh shares at Rs 1027.69 each
Who’s Meeting Whom
- Eris Lifesciences to meet Motilal Oswal Securities on July 9
- Shriram Transport Finance to meet Birla Sun Life Mutual Fund on July 9
- Tata Motors to meet HDFC Life Insurance on July 10
- Singer India promoter sold 41,000 shares on July 5
- Man Infraconstruction promoter group acquired 61,000 shares on July 5
- Sadbhav Infrastructure Projects promoter Sadbhav Engineering acquired 20,000 shares from July 3-4
- City Union Bank last trading day before ex-date for 1:1 bonus.
- Gitanjali Gems last trading day before shifting to 'Z' group.
- Rupee closed at 68.88/$ on Friday from 68.94/$ on Thursday
- Nifty July futures ended at 10,778.4, premium of 5.8 points versus 2 points
- July series: Nifty open interest up 1.5 percent and Bank Nifty open interest down 2 percent
- India VIX ended at 12.44, down 1 percent
- Max open interest for July series call at 10,800 strike price call option (open interest at 37.6 lakh shares, up 10 percent)
- Max open interest for July series put at 10,600 strike price put option (open interest at 51.2 lakh shares, down 1 percent)
In ban: IDBI Bank
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 1.51 versus 1.50
- Nifty Bank PCR unchanged 0.99
Stocks Seeing High Open Interest Change
On Sterlite Tech's New Buy
- Maintain Buy with target price of Rs 500.
- New acquisition is a positive.
- Earnings to grow at 22 percent CAGR over FY18-21.
- Expect acquisition to add 5 percent/7 percent to FY19/20 earnings.
- Maintain Buy with target price of Rs 425.
- Believe that this acquisition is attractive.
- Acquisition will lead to 9 percent EPS accretion.
Goldman Sachs On Voltas
- Maintain Buy with target price of Rs 640.
- Stock declined on concerns of weak AC sales in Q1FY19.
- Long term thesis remains intact.
- Appealing opportunity to add to positions.
- Voltas - Market leader to be biggest beneficiary of demand uptick.
Deutsche Bank On Oil And Gas
- LNG demand robust despite rising prices.
- New city gas auctions offer growth opportunities.
- Sharp rise in demand, due to an increase in industrial activity.
- Majority of new demand driven by switching of fuel to gas.
CIMB On Dilip Buildcon
- Upgraded to Add from Hold; cut target price to Rs 800 from Rs 988.
- Concerns over high proportion of HAM projects factored in.
- Core EPC business remain robust.
- Strong order book provides visibility to earnings.
- Increasing in-house projects warrants lower valuation multiple.
Nomura On India Roads Sector
- Robust execution and orderbook implies strong revenue visibility at least until FY20/21.
- Rising macro risk perception is leading to sharp correction.
- Concerns: rising interest rates and crude oil prices, rupee depreciation, risk of an unstable government and declining appetite of public sector banks for infrastructure funding.
- PNC Infratech: Maintain Buy; cut target price to Rs 210 from Rs 272.
- KNR Construction: Maintain Buy; cut target price to Rs 302 from Rs 390.
- Dilip Buildcon: Maintain Buy; cut target price to Rs 815 from Rs 1,322.