An electronic ticker board displays stock prices inside the Indonesia Stock Exchange (IDX) in Jakarta, Indonesia. (Photographer: Dimas Ardian/Bloomberg)

All You Need To Know Going Into Trade On August 3

Asian stocks edged higher at the end of a volatile week, after optimism for technology shares lifted U.S. equities and overshadowed ongoing trade tensions. Japanese bond yields steadied ahead of a closely watched Bank of Japan bond purchase operation.

Shares in Japan, South Korea and Australia opened with modest gains, while equity futures signaled Hong Kong and China will recoup some of Thursday slide. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.4 percent higher at 11,322 as of 7:20 a.m.

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BQ Live

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

U.S. Market Check

  • Tech companies led gains in U.S. stocks yesterday on favourable earnings reports and as Apple Inc.’s market value reached $1 trillion.
  • The yield on 10-year Treasuries held at 2.99 percent.

Also read: Guess Who’s Getting Richer From Higher Rates? (Probably Not You)

European Market Check

  • European shares fell for a second day after China again vowed to retaliate to U.S. plans to erect higher trade barriers.
All You Need To Know Going Into Trade On August 3

Also read: Germany Is Getting Tougher on Chinese Money

Asian Cues

  • Japan’s Topix index rose 0.1 percent.
  • Australia’s S&P/ASX 200 gained 0.5 percent.
  • South Korea’s Kospi index rose 0.2 percent.
  • Futures on Hong Kong’s Hang Seng rose 0.4 percent.
  • The S&P 500 Index rose 0.5 percent.

Also read: Hawkish Fed, Weak Yuan Signal More Trouble Ahead for Emerging Markets

Commodity Cues

  • The Bloomberg Commodity Index added 0.3 percent, recouping some of Wednesday’s 1.3 percent slide.
  • West Texas Intermediate crude was at $68.88 a barrel.
  • Gold was flat at $1,208.74 an ounce.

Shanghai Exchange

  • Steel traded higher; up 1.1 percent.
  • Aluminium traded higher; up 0.1 percent.
  • Zinc traded higher; up 0.5 percent.
  • Copper traded higher; up 0.1 percent.
  • Rubber traded lower for fourth day; down 0.5 percent.

Stories That You Might’ve Missed

  • Kohli’s gritty 149 keeps India in the hunt on day 2 versus England.
  • Coal clogs up Indian ports as rail car shortage slows deliveries.
  • The DNA Bill: another invasive, imperfect database!
  • The optical illusion of 0 percent GST on sanitary napkins.
  • Expect over Rs 1 lakh crore in recoveries from top 12 bad loan accounts, Sanjeev Sanyal says.
  • Bitcoin needs to hit $213,000 to replace money supply, UBS says.
  • Pakistan to decide on $12 billion bailout in six weeks
  • Disney is seeking ‘Star Wars’ rights back from TBS, TNT.
  • Burberry is changing its logo for first time in two decades.
  • Russian billionaire sued in fight over Fish with former partner.

Here are the key events to watch out for this week:

  • Earnings season continues with Berkshire Hathaway and Toyota among companies reporting results.
  • The U.S. jobs report is on Friday, and is predicted to show a healthy labor market, with 193,000 new jobs.

Also read: To Get the Latest Drugs, Head to China

Economic Data

  • 10:30am: Nikkei India Services PMI for July, prior 52.6
  • 10:30am: Nikkei India Composite PMI for July, prior 53.3

Nifty Earnings To Watch

  • Titan

Other Earnings To Watch

  • Bank of Maharashtra
  • Berger Paints
  • BSE
  • CG Power and Industrial Solutions
  • ENIL
  • Gujarat Alkalies
  • Indo Count Industries
  • KEC International
  • Laurus Labs
  • Nilkamal
  • Nestle India
  • Shipping Corp.
  • SJVN
  • Steel Authority of India
  • VIP Industries
  • Zydus Wellness

Earnings Reaction To Watch

Indiabulls Housing Finance (Q1, YoY)

  • Net interest income up 22.1 percent at Rs 1,690 crore.
  • Net profit up 30.3 percent at Rs 1,054.7 crore.
  • Loan growth at 33.4 percent.
  • Gross NPA at 0.78 percent versus 0.80 percent.

Also read: Q1 Results: Indiabulls Housing Finance’s Profit Meets Estimates

Torrent Pharma (Q1, YoY)

  • Revenue up 37.4 percent at Rs 1,872 crore.
  • Net profit down 13.3 percent at Rs 163 crore.
  • Ebitda up 60.6 percent at Rs 477 crore.
  • Margin at 25.5 percent versus 21.8 percent.

Capital First (Q1, YoY)

  • Net interest income up 51 percent at Rs 528 crore.
  • Net profit up 55 percent at Rs 101.5 crore.
  • Gross NPA at 1.57 percent versus 1.72 percent.
  • Net NPA at 1 percent versus 1.04 percent.

Moil (Q1, YoY)

  • Revenue down 7.6 percent at Rs 313.5 crore.
  • Net profit up 16.1 percent at Rs 113.4 crore.
  • Ebitda up 12.8 percent at Rs 136.7 crore.
  • Margin at 43.6 percent versus 35.7 percent.

Deepak Nitrite (Q1, YoY)

  • Revenue up 24.9 percent at Rs 421 crore.
  • Net profit up 8.5 percent at Rs 21.8 crore.
  • Ebitda up 11.1 percent at Rs 56 crore.
  • Margin at 13.3 percent versus 14.9 percent.

ONGC (Q1, QoQ)

  • Revenue up 13.5 percent at Rs 27,212.8 crore.
  • Net profit up 3.9 percent at Rs 6,143.9 crore.
  • Ebitda up 29.4 percent at Rs 14,732 crore.
  • Margin at 54.1 percent versus 47.5 percent.
  • Net realisations $74.2 per barrel versus $66.71 per barrel.

Also read: Q1 Results: ONGC’s Profit Misses Estimates Despite High Oil Prices

JK Lakshmi Cement (Q1, YoY)

  • Revenue up 2.5 percent at Rs 923.4 crore.
  • Net profit down 51.2 percent at Rs 13.8 crore.
  • Ebitda down 22.1 percent at Rs 93.8 crore.
  • Margin at 10.2 percent versus 13.4 percent.

Shakti Pumps (Q1, YoY)

  • Revenue up 6.8 percent at Rs 96 crore.
  • Net profit up 32 percent at Rs 6.6 crore.
  • Ebitda up 3.1 percent at Rs 13.1 crore.
  • Margin at 13.6 percent versus 14.1 percent.

Narayana Hrudayalaya (Q1, YoY)

  • Revenue up 25.2 percent at Rs 652.3 crore.
  • Net loss at Rs 4.2 crore versus net profit at Rs 10.9 crore.
  • Ebitda down 6 percent at Rs 47.4 crore.
  • Margin at 7.3 percent versus 9.7 percent.

Stocks To Watch

  • SBI and Reliance Jio collaborate on digital transaction for SBI customers.
  • HDFC raised its retail prime lending rate by 20 basis points from August 1.
  • JK Paper acquired 76.37 percent stake in Sirpur Paper Mills for Rs 371 crore.
  • VS Tillers July sales: Tractors sold 769 units versus 760; power tillers 2,598 units versus 2,405.
  • JK Paper acquired 76.37 percent stake in Sirpur Paper Mills for Rs 371 crore.
  • Indiabulls Housing Finance: To pay Rs 10 a share as mid-year dividend, approves raising up to Rs 26,000 crore via bonds.
  • DCB Bank hiked MCLR by 10 basis points across various tenors.
  • Mphasis India to consider buyback of shares on August 7.
  • Tata Motors JLR sales in U.S. down 11 percent at 8,089 units.
  • NBCC India: Wins Rs 400 crore deal for India Pavilion at Dubai World Expo.
  • Reliance Naval: ONGC terminates a contract for vessels. (Bloomberg)

Offering

  • Larsen to exercise oversubscription option on L&T Tech OFS; sale now for 59 lakh shares.

Indian ADRs

All You Need To Know Going Into Trade On August 3

Bulk Deals

  • Talwalkar’s Lifestyles: Visa Capital Partners acquired 1.62 lakh shares or 0.50 percent equity at Rs 166.38 each.
  • Manpasand Beverages: Amundi Funds Equity India sold 6 lakh shares or 0.50 percent equity at Rs 129.56 each.
  • Rushil Décor: Victory Expedition EM Small Cap Fund sold 80,000 shares or 0.50 percent equity at Rs 629.77 each.

Shriram City Union Finance:

  • East Bridge Capital Master Fund acquired 13.3 lakh shares or 2 percent equity at Rs 1,922.25 each.
  • Morgan Stanley Asia or Singapore sold 13.2 lakh shares or 2 percent equity at Rs 1,922.25 each.

Vaibhav Gems

  • Malabar India Fund acquired 1.73 lakh shares or 0.50 percent equity at Rs 680 each.
  • Rahim Ullah sold 1.8 lakh shares or 0.60 percent equity at Rs 680.12 each.

Insider Trades

  • Orient Hotels promoter acquired 95,000 shares on July 31.
  • Sequence Scientific promoter acquired 39,000 shares on July 20.
  • Uniply Industries promoter acquired 1.44 lakh shares on July 26.

Rupee

  • Rupee closed at 68.71/$ on Thursday from 68.43/$ on Wednesday.

F&O Cues

  • Nifty August futures closed trading at 11,282.3 premium of 37 points versus 28 points.
  • August series: Nifty open interest down 2 percent; Bank Nifty open interest down 2 percent.
  • India VIX ended at 12.5, up 0.2 percent.
  • Max open interest for August series at 11,500 Call (open interest at 35.7 lakh, up 20 percent).
  • Max open interest for August series at 11,000 Put (open interest at 46.3 lakh, down 9 percent).

F&O Ban

  • In ban: Adani Power

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 1.64 versus 1.71.
  • Nifty Bank PCR at 0.89 versus 0.96.

Fund Flows

All You Need To Know Going Into Trade On August 3

Brokerage Radar

Macquarie on Tata Motors

  • Maintained ‘Outperform’ with a price target of Rs 485.
  • JLR U.S. sales declined 11 percent in July 2018.
  • Average incentives increased 18 percent YoY and 24 percent MoM.
  • Expect JLR's dollar average selling price improved by 3 percent YoY in July 2018 led by better model mix.
  • Maintain Outperform given attractive valuations.

Morgan Stanley on Coal India

  • Maintained ‘Equalweight’ with a price target of Rs 306.
  • Jul-18: volume momentum strong, but lags target.
  • Volume growth should moderate as base normalizes.
  • Management has guided for 9 percent growth in 2018-19.

CLSA on Torrent Pharma

  • Maintained ‘Buy’; raised price target to Rs 1,860 from Rs 1,610.
  • June quarter’s net profit was ahead of expectation.
  • U.S. revenues on an uptrend and worst of pricing pressure is over.
  • EU going strong; Brazil weak; India outlook gets stronger.
  • Unichem integration progressing well.

Brokerages On ONGC

JP Morgan

  • Maintained ‘Overweight’ with a price target of Rs 265.
  • Second-highest net realisation drives Ebitda beat.
  • Net profit impacted by lower other income and higher tax.
  • Debt for acquisitions has declined and should fall further.
  • Expect sequential pickup in crude production and full benefit of rupee depreciation to flow.

CLSA

  • Maintained ‘Buy’ with a price target of Rs 240.
  • Higher-than-expected sales volumes and realisations drove a beat on revenues.
  • Ebitda above estimates; net profit below due to higher tax rates.
  • ONGC is now the cheapest among global large-cap E&P.
  • Buy for attractive risk-reward.
  • Expect clarity on subsidy in three months which could be huge rerating trigger.

Motilal Oswal

  • Maintained ‘Buy’ with a price target of Rs 219.
  • In-line Ebitda; no subsidy burden yet.
  • Gas production and sales up; expect gas production to increase 10 percent annually.
  • Expect lower opex and higher realisations in absence of subsidy burden.
  • ONGC is on a strong footing, in our view.

Nomura

  • Maintained ‘Neutral’ with a price target of Rs 185
  • In line Q1; adjusted Ebitda ahead of estimates
  • June quarter was hit by lower other income and higher tax
  • Expect higher oil prices to drive 43 percent EPS growth in 2018-19.

Brokerages On Indiabulls Housing

CLSA

  • Maintained ‘Buy’; raised price target to Rs 1,700 from Rs 1,650.
  • Key positive was healthy growth in AUMs and QoQ expansion in spreads.
  • Healthy growth to drive compounding-led returns.
  • IndAS transition lifts net worth by 18 percent and accretive to earnings.

Macquarie

  • Maintained ‘Outperform’ with a price target of Rs 1,599.
  • June quarter’s net profit was in line with expectations.
  • AUM grew 33 percent with retail loans growing more than two times industry average.
  • Revaluation of stake in Oak North Bank under IndAS adds significantly to net worth and CET-1.

JP Morgan

  • Maintained ‘Overweight’ with a price target of Rs 1,600.
  • Earnings beat on lower credit cost under IND-AS.
  • Book value goes up 15 percent; loan growth remains solid.
  • Growth in 2018-19 should remain strong and sees no major stress build-up.

Brokerages On Ramco Cement

Deutsche Bank

  • Maintained ‘Hold’; cut price target to Rs 715 from Rs 755.
  • June quarter’s Ebitda missed estimates due to weaker cement margins.
  • Weaker margin to offset strong volume growth.
  • Cut EPS estimates to factor in lower margins as cost inflation continues.
  • Prefer Shree Cement and Dalmia Bharat in cement sector.

CLSA

  • Maintained ‘Buy’ with a price target of Rs 960.
  • June quarter results were below our estimates.
  • Weak pricing and cost inflation impact earnings.
  • Strong volumes, but weak realisations.
  • Unit Ebitda falls to 14-quarter low.

Brokerages On Marico

UBS

  • Maintained ‘Buy’ with a price target of Rs 425.
  • Solid volumes given the sharp price increases necessitated.
  • Strong revenue growth; raw material inflation impact remains.
  • Parachute remains the brand of choice.

BofAML

  • Maintained ‘Buy’ with a price target of Rs 420.
  • Better-than-expected quarter; Rural growth strong.
  • Revival in global business with GST-led market-share gains in coconut oil to boost earnings.
  • Comforting valuation vs peers; earnings revival ahead.

Also read: Q1 Results: Marico’s Profit Meets Estimates On Strong Rural Growth

Brokerages On Cognizant

UBS

  • Revenue miss raises concerns on impact of margin strategy.
  • 2018 revenue guidance maintained at 8.4-10 percent.

Citi

  • Margin and EPS above estimates, but Revenue modestly below estimates.
  • Demand trends turning positive is a consistent theme in the sector.

Also read: Q2 Results: Cognizant’s Profit Falls To $456 Million