All You Need To Know Going Into Trade On August 30
Asian stocks posted modest gains, tracking a rise in U.S. equities after a better than expected reading on the U.S. economy and a rally in tech shares buoyed sentiment.
Equity indexes in Japan and Australia edged higher while the South Korean benchmark slipped. Futures pointed to gains in Hong Kong and China. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.38 percent to 11,747 as of 6:21 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 plowed to new records amid a broad rally in technology shares, as investors speculated the Trump administration will make progress this week on trade spats. Oil surged toward $70 a barrel.
- The yield on 10-year Treasuries held at 2.88 percent.
Europe Market Check
- European shares gained while U.K. stocks declined on optimism Britain will be able to leave the EU with a deal that maintains close economic ties.
- Japan’s Topix index gained 0.5 percent as of 9:12 a.m. in Tokyo.
- Australia’s S&P/ASX 200 Index rose 0.3 percent.
- South Korea’s Kospi index was little changed.
- Futures on the FTSE China A50 Index added 0.5 percent.
- Futures on Hong Kong’s Hang Seng Index gained 0.6 percent.
- S&P 500 futures were little changed. The S&P 500 climbed 0.6 percent.
- West Texas Intermediate crude was little changed at $69.65 a barrel, the highest in seven weeks, after jumping 1.4 percent.
- Gold was steady at $1,206.31 an ounce.
- Steel traded near two-week low; down 2.3 percent
- Aluminium traded higher for second day; up 0.1 percent
- Zinc traded higher; up 0.6 percent
- Copper traded lower; down 0.3 percent
- Rubber snapped two-day losing streak; up 1.1 percent
Here are the key events to watch out for this week:
- China’s official factory PMI are due Friday.
- The Bank of Korea sets policy on Friday. Weak jobs growth has cooled speculation of an interest-rate increase.
Stories You Might’ve Missed
- 99.3 percent of demonetised money returns to RBI, report shows.
- Supreme Court orders house arrest of activists till Sept. 6
- FedEx’d diamonds fueled the Nirav Modi bank fraud, report says
- Vladimir Putin’s mission impossible
- The Fed should prepare for the unexpected.
- Consolidation soon: India asks RBI to identify banks that can be merged.
- Cars talk, firetrucks fly, and robots do surgery in this lab outside Seoul
Stocks To Watch
- Reliance Infrastructure board approved 100 percent sale of integrated Mumbai power business to Adani Transmission.
- Aditya Birla Capital and Varde Partners create a joint venture to invest in stressed assets in India. Varde Partners will acquire 50 percent stake in Aditya Birla ARC for at least Rs 98 crore.
- Laurus Labs received the U.S. Food and Drug Administration’s approval for Metformin Hydrochloride tablets, which are used for treatment of diabetes. The product and the active pharmaceutical ingredient will be commercialised from the company’s unit two located in Visakhapatnam.
- Greaves Cotton board has approved acquiring 67 percent stake in Ampere Vehicles Pvt. for Rs 77 crore, with an option of acquiring another 13 percent stake in the electric vehicle company for Rs 75.5 crore. The main objective of this acquisition was to accelerate development of clean energy technology solutions and to address wider range of customer segments.
- ICICI Prudential Life Insurance reduced its stake in Tata Chemicals from 5.02 percent to 2.97 percent. The company offloaded 52.1 lakh shares of the chemical company for Rs 216 crore. The cost at which the shares were sold was at Rs 414.21 each.
- National Fertilizers signed memorandum of agreement with Ramagundam Fertilizers and Chemicals Limited to market the latter’s product including 12.71 LMT of urea under its brand ‘Kisan’.
- Jain Irrigation said that it has received a contract worth Rs 127 crore from the Rwandan government for developing irrigation and watershed facilities. This was an engineering, procurement and construction contract and the company said that it will complete the project on next 18 months, PTI reported.
- Jet Airways introduced 28 new flights in September to enhance domestic connectivity.
- Camlin Fine Sciences: Morgan Stanley (France) S.A. sold 8 lakh shares, or 0.66 percent equity at Rs 62.69 each.
- Bharat 22 Index futures and options to be introduced with effect from Sept. 3.
- Adani Transmission Ltd and Pfizer Ltd placed under ASM framework.
- HCL Technologies and Navneet Education ex-date to determine buyback eligbility.
- Aurionpro Solutions Ltd circuit filter revised to 20 percent.
Who’s Meeting Whom
- Shemaroo Entertainment to meet Pabrai Investment Funds and Emkay Global Financial Services on Aug. 30.
- Magma Fincorp to meet Edelweiss Wealth, Vallum Capital and other investors from Aug. 30-31.
- Mahindra Lifespace Developers to meet Cardiff Asset Management on Aug. 30.
- Fine Organics to meet investors on Aug. 30.
- Welspun Enterprises promoters acquired 25 lakh shares from Aug. 27-28.
- Meghmani Organics promoter acquired 43,300 shares on Aug. 27.
- Aegis Logistics promoter acquired 30,100 shares on Aug. 27.
- Nirlon promoter group sold 12,500 shares from Aug. 4-24.
- Srikahalashti Pipes promoter acquired 15,000 shares from Aug. 27-28.
- Trident promoter Trident Group acquired 18.5 lakh shares on Aug. 28.
(As reported on Aug. 29)
Money Market Check
- The Indian rupee on track fell 0.7 percent to close at an all-time low of 70.59 against the dollar yesterday.
- The home unit is poised for a seventh straight month of decline in August, its longest losing streak in nearly 18 years. It is down 9.5 percent year-to-date, making it the Asia's worst performing currency.
- Meanwhile, sovereign bonds extend losses after yield rises to 7.92 percent. It has risen 5 basis points so far this week.
- The dollar index trades lower for fifth consecutive session, above the 94.50-mark.
Also read: How A Weaker Rupee Will Impact India Inc.
- Nifty August futures ended at 11,707, with a premium of 15 points versus 14 points.
- Nifty September futures ended at 11,749.8, with a premium of 58 points versus 50 points.
- Rollover: Nifty at 53 percent and Bank Nifty at 45 percent.
- Across series: Nifty open interest unchanged; Bank Nifty open interest up 9 percent.
- India VIX unchanged at 12.4.
- Max open interest for August series call at 11,800 strike price call option, (open interest at 31.8 lakh shares, up 20 percent)
- Max open interest for August series put at 11,000 strike price put option, (open interest at 35 lakh shares, down 9 percent)
- In ban: Dewan Housing, IDBI Bank, Punjab National Bank.
- New in ban: None
- Out of ban: Jain Irrigation.
- Nifty PCR at 1.78 versus 1.94
- Nifty Bank PCR at 1.17 versus 1.35
Goldman Sachs on Vedanta
- Initiated ‘Buy’ with target price of Rs 280, indicating potential upside or 23 percent.
- Attractive commodity exposure to zinc and oil.
- Strong volume growth across businesses to drive earnings.
- Expect strong dividend yield of 5 percent despite growth capex.
- Zinc price recovery and volume growth to drive stock re-rating.
UBS on Axis Bank
- Maintained ‘Buy’; raised target price to Rs 765 from Rs 675; indicating potential upside 16.5 percent.
- Well placed to gain market share in deposits.
- Asset quality clean-up nearing the end.
- Expect re-rating as visibility on asset quality improves in second half and growth accelerates.
Nomura on Indian Autos
- Delayed festive season to impact growth.
- Expect MHCVs to report single-digit growth while PVs/two-wheeler growth to remain flat in August.
- Floods in Kerala could have an impact on sales.
- Maruti Suzuki and Eicher volumes could see worse than expected impact.
BofAML on ITC
- Maintained ‘Buy’ with target price of Rs 360; indicating potential upside of 15 percent.
- Early checks suggest 3-4 percent (YoY) volume growth likely in cigarettes in second quarter.
- Expect healthy show in FMCG despite rising competitive intensity.
- Valuations undemanding; structural benefits to drive long-term growth.
Citi on Petronet LNG
- Maintained ‘Buy’; raised target price to Rs 290 from Rs 285; indicating potential upside of 24 percent.
- Management assured minimal impact from upcoming terminals.
- Exploring investment opportunities in LNG terminals; open to higher dividend.
- Buy given potential upside to earnings and attractive valuations.
JPMorgan on PNB Housing Finance
- Maintained ‘Underweight’ with target price of Rs 1,050
- Book risks are contained, and they do need monitoring given the state of real estate market.
- Near-term catalysts remain on the announced stake sale.
- Transaction price will be key; expect stock volatility to be high.
Citi on Pidilite Industries
- Maintained ‘Neutral’ with target price of Rs 1,216
- Pidilite to prioritise growth over margins; expect margin in the 20-24 percent band.
- GST-related gains have been muted so far.
- Next six months will be crucial for gauging inherent demand.
Citi on India Financials
- NPA recoveries picked up; IND-AS mixed bag for NBFCs.
- Slippages down and recoveries up.
- NIMs see pressure; loan growth led by retail.
- Expect gradual recovery in asset quality for corporate banks.
- Private banks and NBFCs to continue to see loan growth as they take share from PSU banks.