All You Need To Know Going Into Trade On July 10

Stocks in Asia extended recent gains from a nine-month low, and followed U.S. shares higher, amid optimism the upcoming earnings season will be sufficiently robust to overshadow a rise in trade tensions.

Equities in Japan, South Korea and Australia rose after the S&P 500 Index climbed for a third day toward the upper end of its trading range.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.4 percent higher at 10,908 as of 7:10 a.m.

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BQ Live

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

U.S. Market Check

• U.S. equities rose to the highest in almost a month as investors set aside concern about escalating trade tensions and rising political tension abroad to focus on the coming earnings season.
• The yield on 10-year Treasuries held at 2.86 percent.

Europe Check

• European shares rose for a fifth day in the longest run of gains since March as the pound’s weakness gave U.K. stocks a boost.

• The euro added less than 0.1 percent to $1.1757.
• The pound held at $1.3254.

Asian Cues

• Japan’s Topix index rose 0.7 percent.
• Australia’s S&P/ASX 200 Index gained 0.2 percent.
• Futures on Hong Kong’s Hang Seng added 0.4 percent.
• Futures on the S&P 500 rose 0.1 percent. The underlying gauge gained 0.9 percent Monday for its third day of gains.

Commodity Cues

• West Texas Intermediate crude rose 0.1 percent to $73.91 a barrel.
• Gold futures rose 0.1 percent to $1,258.73 an ounce.

Shanghai Exchange

• Steel traded higher for second day; up 1.8 percent.
• Aluminium traded higher for third day; up 0.2 percent.
• Zinc snaps traded lower; down 1.2 percent.
• Copper traded higher for second day; up 0.4 percent.
• Rubber traded higher for third day; up 0.4 percent.

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Here are some key events coming up this week:

• 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.
• 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 and Citigroup among the largest companies due to give results, as well as India’s Infosys Ltd.

Indian ADRs

Earnings To Watch

• TCS
• Indusind Bank
• Prakash Industries

Earnings Reactions To Watch

Dish TV India (Q1, YoY)

• Revenue at Rs 1,656 crore
• Net profit at Rs 28 crore
• Ebitda at Rs 557.5 crore
• Margins at 33.7 percent
• Videocon D2H merged with Dish TV on March 22, thus Q results are not comparable.

Uttam Galva Steels (Q1, YoY)

• Revenue down 90 percent at Rs 92 crore.
• Net loss of Rs 366 crore versus net loss of Rs 192.5 crore.
• Ebitda down 29 percent at Rs 6 crore.
• Margins at 6.5 percent versus 0.9 percent.

Stocks To Watch

• HCL Tech to consider share buyback on July 12.
• GSFC says it expects to get Rs 693 crore subsidy from the Fertiliser Department.
• SRF plans to set up a BOPET manufacturing line and resin plant in Thailand for $60 million.
• Gayatri Projects declared lowest bidder for two packages of Purvanchal Expressway project worth Rs 2,759 crore.
• PNC Infratech declared lowest bidder for two packages of Purvanchal Expressway project worth Rs 2,520 crore.
• Sadbhav Infra said its first quarter toll revenue up 13.9 percent to Rs 275 crore.
• Bajaj Hindusthan to seek shareholders’ nod for sale of Lalitpur Power Generation to Bajaj Energy, a related party for Rs 1.097.53 crore.
• IVRCL appoints liquidator as NCLT orders start of liquidation process for subsidiary Hindustan Dorr Oliver.
• Rajshree Sugars says lenders declare the loan account of the company as NPA.
• Astral Polytechnik to acquire 51 percent stake in Rex Polyextrusion for Rs 75.22 crore.
• Shree Renuka said its Brazil unit’s lenders approved new recovery plan.
• PPAP Automotive started production at its Gujarat plant.

Data To Watch

• 10:30am: India car sales data for month of June

Bulk Deals

Century Enka

• Aequitas Investment Consultancy bought 3.16 lakh shares or 1.4 percent equity at Rs 230.05 each.
• Camden Industries sold 6 lakh shares or 2.7 percent equity at Rs 230.02 each.
• Promoter Cygnet Industries sold 3.06 lakh shares or 1.4 percent equity at Rs 231.86 each.

Manappuram Finance

• Quinag Acquisition (FPI) Ltd bought 2.6 crore shares or 3.1 percent equity at Rs 105 each.
• WF Asian Reconnaissance Fund Limited sold 2.69 crore shares or 3.2 percent equity at Rs 105 each.

JBF Industries: IFCI Ltd sold 4.60 lakh shares or 0.6 percent equity at Rs 39.86 each.

Corporate Actions

• Talwalkars Better Value Fitness Ltd move out of ASM framework.
• Jagran Prakashan buyback period from July 10 to 23.
• City union Bank Limited ex-date for 1:1 bonus.
• Solara Active Pharma Sciences Ltd last trading day before shifting to B group.
• Minda Industries Limited last trading day before ex-date for 2:1 bonus.

Who’s Meeting Whom

• All Cargo Logistics to meet Jeetey Investments Pvt and Ambit Capital on July 10.
• MIRC Electronics to meet Reliance PMS and other investors on July 10.
• Magma Fincorp to meet Ramesh Damani Finance, Credit Suisse and other investors on July 10.

Insider Trades

• Omaxe Ltd promoter Nakul Goel sold 2.50 lakh shares from July 4–5.
• Man Infra promoter Vatsal Shah acquired 69,000 shares on July 6.

Rupee

• Rupee closed at 68.72/$ on Monday from 68.88/$ on Friday.

F&O Cues

• Nifty July Futures ended at 10,859.8 premium of 6.9 points versus 5.8 points.
• July series: Nifty open interest up 5 percent and Bank Nifty open interest up 10 percent.
• India VIX ended at 12.3, down 0.4 percent.
• Max open interest for July series at 11,000 Call (open interest at 37.3 lakh, up 6 percent).
• Max open interest for July series at 10,600 Put (open interest at 52.3 lakh, up 2 percent).

F&O Ban

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

Put-Call Ratio

• Nifty PCR at 1.52 versus 1.51
• Nifty Bank PCR at 1.19 versus 0.99

Fund Flows

Brokerage Radar

Credit Suisse on Reliance Industries

• Initiated ‘Outperform’ with a price target of Rs 1,180.
• Reliance Jio Infocomm may be worth $10.4 billion.
• Jio’s revenue can double in three years and contribute 10-40 percent of operating income by March 2025.
• New refining and petrochemical projects will drive over 20 percent earnings per share growth in 2018-19.
• Current softness in gross refining margins may subside in medium term.
• Petcoke gasification can add $2.4 per barrel to refining margin.

Macquarie on Indian Refiners

• IMO 2020 sulfur regulations a game-changer for oil industry.
• Expect middle distillate cracks doubling to $30 per barrel in 2020.
• Substantial demand from shipping industry to double the cracks.
• RIL: Upgrade to ‘Outperform’ from ‘Underperform’; hiked price target to Rs 1,240 from Rs 830.
• HPCL: Maintain ‘Outperform’; hiked price target to Rs 570 from Rs 500.
• BPCL: Maintain ‘Outperform’; hiked price target to Rs 555 from Rs 490.
• IOCL: Maintain ‘Outperform’ with a price target of Rs 270.

JP Morgan on DLF

• Maintained ‘Overweight’ with a price target of Rs 280.
• Near term investment thesis is predicated on pick up in residential sales.
• Monetisation for Phase 5 developments unsold inventory to be faster.
• Move towards completed accounting to aid net profits materially over the current and the next financial.

Morgan Stanley on HDFC Bank

• Maintained ‘Overweight’ with a price target of Rs 2,570.
• Initial updates is net positive.
• Updates highlight accelerating loan growth.
• Expect CASA ratio to improve in coming quarters.

BoA-ML on Dish TV

• Maintained ‘Buy’ with a price target of Rs 90.
• Strong results with revenue and operating income beating estimates after 3-4 quarters.
• Company well placed to deliver strong margins led by synergy benefits.
• Find valuations cheap in-context of growth.

Goldman Sachs on Dish TV

• Maintained ‘Neutral’ with a price target of Rs 76.
• Surprised by the magnitude of ARPU uptick; await more details.
• Despite strong ARPU, remain uncertain on sustainability of such ARPU.
• Availability of cheap data and launch of JioGigaFiber to put pressure on industry.

Goldman Sachs on Colgate

• Maintained ‘Buy’ with a price target of Rs 1,452.
• Lower prices indicate management's increased focus on re-gaining market share.
• Believe new products in natural segment will arrest its market share declines.
• Expect volume growth and market share performance to improve over the current financial year.

Kotak Securities on Oberoi Realty

• Upgraded to ‘Buy’ from ‘Reduce’; hiked price target to Rs 560 from Rs 535.
• Expect more promising 2018-19 on account of Thane launch and cash generation from Three Sixty West.
• Improving pace of execution and sales at Mulund will further bolster investor sentiment.
• Expect under-leveraged balance sheet to allow Oberoi secure new development prospects.

Deutsche Bank on Petronet LNG

• Maintained ‘Buy’ with a price target of Rs 310.
• Remain confident that there exists limited threat of competition for Dahej terminal.
• Regas margins at Dahej lowest due to lower capex costs.
• Expect demand growth from industrial sector, as industrial recovery picks up pace.
• Higher incremental LNG demand in FY19 to ensure high utilisation rate for Dahej terminal.

HSBC on Equitas and Ujjivan

• Risk/reward remains intact despite some encouraging signs.
• Continued focus on bank transition and loan book diversification to weigh on earnings.
• Ujjivan: Upgraded to ‘Hold’ from ‘Reduce’; hiked price target to Rs 370 from Rs 329.
• 2018-19 a crucial transition year from both asset diversification and liabilities base building perspective.
• Equitas: Maintained ‘Buy’; cut price target to Rs 152 from Rs 159.
• Equitas is positioned to accelerate its balance sheet growth from here on.