All You Need To Know Going Into Trade On March 1

Stocks in Asia notched up gains early Friday, with Japanese shares helped by overnight weakness in the yen.

Japanese equities posted the bulk of gains ahead of the open in Hong Kong and China, where focus will be on MSCI Inc.’s announcement that it will boost the weight of domestic so-called A shares in its global benchmarks.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.11 percent to 10,881.50 as of 6:55 a.m.

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BQ Live

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

U.S Market Check

• U.S. stocks fell for a third consecutive day for the first time this year as lingering concerns over trade and geopolitical risks offset a report showing the economy cooled by less than expected last quarter.
• The yield on 10-year Treasuries held at about 2.72 percent.

Asian Cues

• Japan’s Topix index rose 0.5 percent.
• Futures on the S&P 500 Index were flat after the underlying gauge fell 0.3 percent Thursday.
• Australia’s S&P/ASX 200 Index rose 0.5 percent.

Commodity Cues

• Brent crude ended 0.54 percent lower at $66.03 per barrel.
• West Texas Intermediate rose 0.1 percent to $57.27 a barrel.
• Gold was steady at $1,313.49 an ounce.

London Metal Exchange

• Nickel resumed declines after a one-day breather, ended 0.04 percent lower.
• Copper ended higher for the fifth day, up 0.04 percent.
• Aluminium halted a two-day rally, ended 0.57 percent lower.
• Lead ended higher for the seventh day, up 0.7 percent.
• Zinc ended higher for the third day, up 1.2 percent.
• Tin halted a two-day decline, ended 0.56 percent higher.

Key Events To Watch This Week

• March 1: Nikkei India Manufacturing PMI for January. (Prior 53.9)
• March 1: Automakers to announce monthly sales data for January.

Indian ADRs

Stocks To Watch

• Bharti Airtel: Board approved raising Rs 32,000—Rs 25,000 crore via a rights issue and rest through perpetual bonds—with the rights issue price set at Rs 220 per share which at a discount of 31 percent to the closing price. The rights entitlement ratio set at 19 shares for every 67 shares held by shareholders.
• Jet Airways Founder Naresh Goyal agreed to step down as chairman. Additionally, six more aircraft have been grounded due to non-payment. That makes it 19 grounded planes. The company says it making so making all efforts to minimise disruption of its network.
• Orissa Minerals Development Company said it will pay Rs 400 crore as a penalty to Odisha Government due to violation of environmental clearance and other norms. The market capitalisation of the company stands at Rs 493 crore as on Feb. 28.
• Kotak Mahindra Bank reduced MCLR by 5 basis points across various tenors. One month MCLR at 8.35 percent and one year MCLR at 9 percent.
• HDFC to consider interim dividend on March 6.
• Dewan Housing Finance: CRISIL downgraded the credit rating for short term borrowings worth Rs 2,525 crore to ‘A1’ from ‘A1+’ with a rating watch of negative implications. The reason given by the rating agency is that DHFL has shown limited progress in raising funds in last one month, cascading impact on business operations and slower buildup of balance sheet liquidity.
• HDFC Bank acquired 9.1 percent stake in CSC E-Governance Services for Rs 14.62 crore.
• Infosys said that independent director Kiran Mazumdar Shaw via her portfolio management services sold 1,600 shares of the company without obtaining pre-clearance of trade. The technology company says the portfolio manager unilaterally took the decision to conduct the trade. Board determines this act as violation of the company’s insider trading policy and has fined Kiran Mazumdar Shaw a penalty of Rs 9,50,000 which shall be payable to a charitable organisation of her choice.
• Motherson Sumi arm signed agreement with the U.K.-based Bombardier Transportation to acquire the latter’s assets in connection with production and installation of electrical components and systems for applications in the rail industry. The transaction is valued at 10.9 million pounds.
• Vedanta’s Zinc mine in South Africa officially opened. The project was given a go-ahead in 2014 and Gamsberg Reserve, South Africa Mine has reserve of 214 MT and estimated life of 30+ years. The company stated in its press release that it is pursuing a feasibility study into the development and construction of a smelter-refinery complex in the same area.
• Larsen & Toubro stated that media making allegations on settlement by Cognizant Technology Solutions with the U.S. Securities and Exchange Commission acknowledging violations in regulations in connection with certain construction projects in India. The construction company clarified that it was not aware of any evidence that supported the company's involvement in making the alleged improper payments.
• Vodafone Idea: Cabinet approved FDI proposal of up to Rs 25,000 crore. Approval was required for the proposed rights issue.
• Sugar Companies: Government approved Rs 10,540 crore soft loan to help sugar mills clear cane arrears.
• Cabinet approves FAME 2 policy at the cost of Rs 10,000 crore.
• HDFC and Vedanta board to meet on March 6 to consider dividend payment.
• Hathway Cable: RIL group entities, promoters, acquired 20.61 percent stake from public in open offer.

Bulk Deals

• Tata Motors DVR: SBI MF acquired 37.32 lakh shares or 0.73 percent equity at Rs 87.74 each.
• Reliance Infra: STCI Finance sold 18.24 lakh shares or 0.71 percent equity at Rs 123.8 each.

Trading Tweaks

• Ajanta Pharma, Coal India share buyback window opens.
• Anup Engineering (Demerged Entity of Arvind) to get listed.
• Maithan Alloys, Jindal Stainless to move into short term ASM Framework.
• SREI Infra Finance, Reliance Communication, Andhra Cements price band revised to 20 percent.

Who’s Meeting Whom

• Jyothy Lab to meet JP Morgan and Credit Suisse from March 6-8.
• Shriram City Union Finance to meet Quantum Advisors on March 1.
• TCS to meet Somerset Capital Management on March 12.

Insider Trading

• Mukand promoter group Baroda Industries acquired 55,000 shares from Feb. 25-26.
• KNR Constructions promoter Mereddy Rajesh sold 3.18 lakh shares on Feb. 26.

F&O Cues

• Nifty March futures closed trading at 10857, premium of 65 points.
• Max open interest for March 28 series at 11,000 Call, (open interest at 15.8 lakh shares)
• Max open interest for March 28 series at 10,600 Put, (open interest at 24.9 lakh shares)

Put-Call Ratio

• Nifty PCR at 1.71 versus 1.37.
• Bank Nifty PCR at 1.39 versus 1.08.

Brokerage Radar

On Bharti Airtel

CLSA

• Maintained ‘Buy’ with a price target of Rs 410
• Fund raising will lower loss per share by 44 percent in 2019-20 and boost EPS estimates for 2020-21 by 42 percent.
• Fund raise to offer sufficient headroom to invest in networks/future spectrum auctions.
• Airtel can deleverage balance sheet further by Rs 25,000 crore from stake sale in Africa and Infratel.

UBS

• Maintained ‘Buy’ with a price target of Rs 415.
• Capital raise provides adequate financial muscle amid intense competitive environment.
• Expect the rights issue to be completed by the first quarter of the next financial year.
• Stock is attractively valued.

More Calls

JPM on SAIL

• Upgraded to ‘Overweight’ from ‘Neutral’; maintained price target of Rs 78.
• Upgrade to Overweight on favorable risk-reward ratio.
• Benefits from higher steel prices driven by higher iron ore prices.
• Market not pricing in higher iron ore and volumes for SAIL.

UBS on Chennai Petroleum

• Maintained ‘Buy’; cut price target to Rs 400 from Rs 470.
• Cut EPS estimates to factor in lower spreads on key refining products.
• Scaling up residual project could boost GRM.
• IMO 2020 implementation will benefit.

Macquarie on ONGC

• Maintained ‘Outperform’ with a price target of Rs 210.
• Specific risks related to ONGC is already priced in.
• See a fat margin of safety and limited downside.
• Catalyst: elections, strong dividend, consensus EPS upgrades, gas price reforms.