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All You Need To Know Going Into Trade On April 1
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
01 Apr 2019, 07:18 AM IST 
Pedestrians walk near the Bombay Stock Exchange (BSE), left, in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)
Stocks in Asia and U.S. equity futures climbed, and Treasuries slipped as China manufacturing data eased concern about the pace of the global economic slowdown.
Japanese shares posted gains of nearly 1.5 percent and equities also rose in Sydney and Seoul. China’s first official economic gauge for March signaled a stabilization in the world’s second-largest economy. Futures on the S&P 500 Index signaled U.S. shares could build on last week’s gains.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.45 percent to 11,728 as of 7:15 a.m.
Short on time? Well, then listen to this podcast for a quick summary of the article!
BQ Live
Here’s a quick look at all that could influence equities today.
U.S. Market Check
- Stocks climbed to round out a strong quarter and Treasuries fell amid hopes for a trade deal between the world’s two largest economies.
Opinion
U.S. Gets Health Check as Recession Fears Persist
Asian Cues
- Japan’s Topix index rose 1.4 percent.
- South Korea’s Kospi index gained 1.1 percent.
- Australia’s S&P/ASX 200 Index rose 0.8 percent.
- Futures on the S&P 500 rose 0.7 percent.
Commodity Cues
- Brent crude traded 0.56 percent lower at $68.01 a barrel.
- West Texas Intermediate crude rose 0.4 percent to $60.38 a barrel.
- Gold slid 0.1 percent to $1,291.76 an ounce.
London Metal Exchange
- Aluminium ended 0.47 percent lower.
- Nickel halted a two-day fall, ended 0.75 percent lower.
- Copper ended higher for the third day, up 1.93 percent.
- Lead ended a two-day rally, down 0.05 percent.
- Zinc resumed rally after a one-day blip, ended 1.95 percent higher.
- Tin ended 0.09 percent lower.
Key Events To Watch This Week
- U.K. Parliament will take up indicative votes on Brexit proposals on Monday as members seek a compromise to break an impasse over Prime Minister Theresa May’s withdrawal agreement.
- The Reserve Bank of Australia decides on monetary policy Tuesday at a time of falling growth forecasts. Then Australia will release its federal budget that evening.
- Chinese Vice Premier Liu He leads a delegation of trade negotiators to Washington on Wednesday, days after U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer traveled to Beijing.
- The monthly U.S. jobs report on Friday is projected to show nonfarm payrolls up 175,000 in March, similar to the 186,000 average over the prior three months, after recent readings whipsawed analysts. Economists think the jobless rate held at 3.8 percent with hourly earnings growing at a strong clip.
Opinion
It's a Huge Week For Bond Markets Worried About Global Growth
Indian ADRs
Stocks To Watch
- Tata Motors said it is disappointed by S&P’s decision to downgrade Jaguar Land Rover now. The company stated that it reaffirms, that it expects improved financial results in the current quarter, compared to the first nine months of the financial year, with significant positive cashflow in the fourth quarter. Jaguar Land Rover is continuing to execute its product plans and Project Charge turnaround strategy to deliver £2.5 billion of cashflow improvements by March 2020.
- Dr. Reddy’s Laboratories said that its Vishakapatnam facility has been re-inspected by Regulatory Authority of Germany and considered to be fully compliant. On Nov. 12 the said authority continued the company’s EU-GMP certification with a specific exclusion of one new product for the aforementioned facility.
- Indoco Remedies: U.S. FDA changed the inspection classification status from 'Official Action Initiated' to 'Voluntary Action Initiated' for Goa plant. The company said this move signifies that the site has come out of the warning letter issue to the site in March 2017 and several pending ANDAs from this facility will now be approved.
- Indian Bank: Ministry of Finance issued notification for amalgamation of Pallavan Grama Bank (sponsored by Indian Bank) and Pandyan Grama Bank (sponsored by Indian Overseas Bank) in Tamil Nadu into a single Regional Rural Bank which shall be called as Tamil Nadu Grama Bank under the sponsorship of Indian Bank.
- Jubilant Lifesciences and International Finance Corporation mutually agree for a one time settlement of $135 million of zero coupon convertible loan. The company says the payment has been made from the recent rated unsecured bonds of US$200 million raised by the company.
- SRF said that pollution control board has issued directions to close the operations of its industrial plant in Gujarat due to alleged non-compliance with the provisions of Water (Prevention and Control of Pollution) Act, 1974. The company says it is in the process of filing a detailed appropriate reply clarifying its position with regard to the issues raised.
- Grasim Industries acquired 100 percent stake in Soktas India for Rs 135.12 crore. The target company is in the business of manufacturing and the distribution of premium cotton fabrics.
- JSW Energy said it will not pursue the electric vehicles business due to higher than anticipated uncertainties associated with said business.
- Astec Life Sciences’s board re-appointed Ashok V Hiremath as the Managing Director of the Company for a further period of one year commencing till March, 2020.
- Amber Enterprises extended time line to complete acquisition of balance 51 percent stake by June 30. The existing plan was of buying 70 percent stake in Ever Electronics.
- Havells India started commercial production of air conditioners at its Rajasthan plant.
- TeamLease Services: CRISIL revised rating outlook g outlook on the long-term bank facility of the Company to'Positive' from 'Stable', while reaffirming the rating at CRISIL A-.
- Deepak Fertilizer and Petrochemicals: ICRA revised long term rating from AA- (Negative) to A+(Stable).
- MCX: SEBI approved appointment of PS Reddy as MD and CEO of the exchange for a period of five years from the date of his joining (to be communicated later by the exchange).
- Jindal Steel & Power’s board appoints NA Ansari as Joint Managing Director for a period of three years with effect from March 29.
- J&K Bank said it has transferred by way of sale 4.1 crore shares of PNB MetLife India Insurance Company to Oman India Joint Investment Fund for a total consideration of Rs. 185 crore.
- Rushil Décor received closure notice from Pollution Control Board to stop the manufacturing process of one of the Laminate Sheet manufacturing units in Gujarat.
- Inox said it has commenced commercial operations of one multiplex in Odisha. Besides, it started commercial operations in a multiplex located in Chennai. The said multiplex has eight screens and 1,820 seats. INOX is now present in 67 cities with 139 Multiplexes, 574 screens and a total seating capacity of over 1.35 lakh seats across India.
- Shriram Transport Finance to consider raising funds by issue of debt securities on April 3.
- Tata Communications-HPIL Deal: Boards of both companies approve to extend the effective date of the scheme to March 31, 2020.
- India Cements: N. Srinivasan resigns from the board of the company as a director with effect from April 1, due to retiring by rotations in deference to SEBI Regulations on age limit.
- GMR Infra cancelled 4 series of optionally convertible debentures after SEBI guidance. Each bond had a face value of RS 57.42 crore.
- Dewan Housing Finance cancelled two employee stock option plans; to explore new employee stock option plans.
- Tata Motors sold its entire stake in Aerospace business to TASL for Rs 625 crore. Also, the company acquired non aerospace business from TAL for Rs 10 lakh.
- GAIL and BHEL signed Memorandum of Understanding for development of solar-based power project.
- Jet Airways’s pilots may go on leave on non-payment of wages, reports Economic Times.
- U.S. FDA approved Sun Pharma and Zydus's ANDA for ambrisentan.
- Sunteck Realty to meet Investors in Europe from Apr 1 – 5
- Garden Reach Shipbuilders & Engineers delivered a landing craft utility L -56 to Indian Navy. This is the sixth of an order of eight such vessels from the Indian Navy.
- Welspun Corp plans to sell its plate and coil mill division (PCMD) and 43 MW power division for Rs 940 crore to Laptev Finance Pvt. Ltd. PCMD is expected to fetch a consideration of Rs 873.5 crore, while 43 MW power division is expected to be sold for Rs 66.9 crore. PCMD had contributed 16.9 percent to the consolidated revenue and 15.4 percent to consolidated Ebitda of the company for 2017-18. The sale expected to completed by May 31, 2019.
- Cipla received eight GMP observations and 10 PAI observations. These observations are both product specific and GMP observations related to the manufacturing and quality processes. There are no data integrity (DI) observations. The U.S. FDA conducted a product specific pre-approval (PAI) and good manufacturing practices (GMP) inspection at its Kurkumbh plant from March 11 to March 20. The inspection covered three units at the plant.
- Titan acquired 30.5 lakh equity shares in CaratLane for Rs 100 crore. Stake in CaratLane stands increased to 69.5 percent from 66.4 percent.
- NLC India: TANGEDCO (Tamil Nadu Electricity Board Division) has not agreed to extend power supply agreement with NLCIL’s Thermal Power Station (TPS-1) beyond March 31. So far TANGEDCO was the only beneficiary for the power generated from TPS-l and in the event of TANGEDCO not agreeing for the extension sought as above, company to take appropriate decision on whether the units shall be operated partially/fully/not operated, w.e.f. April 1, 2019.
- ICICI Securities: Vijay Chandok to take charge as MD and CEO of ICICI Securities from May 7, 2019. Shilpa Kumar, current MD and CEO, to take up senior level position at ICICI Bank.
Bulk Deals
SBI Life Insurance:
- Canada Pension Plan Investment Board acquired 2 crore shares or 2 percent equity at Rs 577.5 each.
- Promoter BNP Paribas Cardif sold 5.07 crore shares or 5.1 percent equity at Rs 577.93 each.
Pledged Share Details
- Apollo Tyres promoter Motilay Finance created a pledge of 40 lakh shares on March 26.
Who’s Meeting Whom
- Aster DM Healthcare to meet Hermes Investment, Stewart Investors and other investors from April 1-3.
- Dixon Technologies to meet Emkay Global on April 1
Insider Trading
- Mukand promoter group Bachhraj Factories acquired 74,000 shares on March 26.
- Jindal Stainless promoter group Abhuday Jindal acquired 1.15 shares from March 27-28.
- Bajaj Auto promoter Bajaj Holdings and Investment acquired 6.2 lakh shares on March 28.
Money Market Update
- The home currency ended at 69.15 against the greenback on Friday versus 69.34 on Thursday.
Opinion
Salivating Bulls Hope the RBI Can Keep India’s Rally Going
F&O Cues
- Nifty April Futures closed trading at 11680, premium of 56 points.
- Max OI for April series at 12,000 Call, OI at 22.7 lakh shares.
- Max OI for April series at 11,500 Put, OI at 21.3 lakh shares.
Stocks In F&O Ban
- In Ban: Adani Power, IDBI, Reliance Power
- New in Ban: IDBI, Reliance Power
Active Stock Futures
Fund Flows
Brokerage Radar
JPMorgan on Jubilant FoodWorks
- Maintained ‘Overweight’; hiked price target to Rs 1,600 from Rs 1,430.
- Encouraged by continued efforts to expand menu.
- Chinese food format appears attractive to us.
- Believe Jubilant to fare better in QSR space owing to high exposure to delivery.
Goldman Sachs on Crompton Greaves
- Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 260 from Rs 214.
- Crompton offers favourable risk reward in a sector where multiples are elevated.
- Expect sustained growth in rural India where CG has high exposure.
- Margins in lighting business to normalize at higher levels.
- Expect new product innovations to drive growth.
Citi on SRF
- Maintained ‘Buy’ with a price target of Rs 2,508.
- Closure of Dahej is big, but a temporary setback.
- Quantum of impact on earnings is difficult to ascertain.
- Dahej contributes 70 percent of chemical business revenue.
HDFC Sec on Mastek
- Initiated ‘Buy’ with a price target of Rs 660.
- Strengthened its relationship with the U.K. government and improved operational efficiencies.
- Don’t expect further margin expansion due to on-going issues in US business, higher on-site hiring and supply side issues.
- Expect revenue and EPS CAGR of 15 percent and 16 percent respectively over FY19-21; available at attractive valuations.
- Stake in Majesco U.S. and net cash position provides additional comfort.
HSBC on Just Dial
- Maintained ‘Buy’ with a price target of Rs 640.
- Targeted mid-teen revenue growth will be achieved in the current financial year.
- Revenue from ex-search business to take time, working on re-launching JD Omni.
- Expect steady cash generation and 4-5 percent dividend yield.
HSBC on Indian Metals
- Vedanta: Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 200 from Rs 290
- Hindustan Zinc: Maintained ‘Hold’; cut price target to Rs 250 from Rs 260.
- Lower commodity prices and appreciating rupee results in a cut in Ebitda estimates by 8-21 percent.
- Deviation from capital allocation strategy is likely to act as an overhang for Vedanta.
- Higher debt at Vedanta to result in sustained high dividend payout from Hindustan Zinc.
Equirus Securities on Zensar Tech
- Initiated ‘Add’ with a price target of Rs 246.
- Healthy order booking and acquisitions to aid growth momentum.
- Platform agnostic Digital bouquet to augment growth.
- Well positioned to drive wallet share in large customers.
- Expect $ revenue to grow at 14.3 percent CAGR over FY18-FY21.
Equirus Securities on Radio Sector
- ENIL: Initiate ‘Reduce’ with a price target of Rs 545.
- Music Broadcast: Downgraded to ‘Reduce’ from ‘Long’; cut price target to Rs 61 from Rs 72.
- Emerging digital trends start weighing on valuations just like in the U.S.
- U.S. radio companies have seen de-rating despite stable/growing earnings.
- Radio continues to be the most efficient medium for advertisers.
CLSA on Axis Bank
- Maintained ‘Buy’; hiked price target to Rs 840 from Rs 800.
- Earnings rebound ahead and steady growth can drive a rerating.
- Slippage a tad higher but recoveries stronger.
- Hike EPS estimates by 6 percent for the current and the next financial year; Expect RoE of 16 percent by the next financial year.