All You Need To Know Going Into Trade On April 12

Asian stocks traded mixed after U.S. shares showed little direction ahead of corporate earnings and following data confirming the economy remains on solid footing.

Japanese shares retreated with those in South Korea, while Australian equities rose. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.34 percent to 11,636.50 as of 6:55 a.m.

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

U.S Market Check

• Most U.S. equity benchmarks declined amid thin volumes Thursday as investors cast an eye toward the start of earnings season.
• The yield on 10-year Treasuries dipped to 2.49 percent.

Asian Cues

• Japan’s Topix index fell 0.2 percent.
• Hang Seng futures earlier added 0.1 percent.
• South Korea’s Kospi slid 0.3 percent.
• Australia’s S&P/ASX 200 Index gained 0.4 percent.
• Futures of S&P 500 Index was little changed.

Commodity Cues

• Brent crude traded 0.24 percent higher at $71 per barrel.
• West Texas crude added 0.3 percent to $63.76 a barrel.
• Gold held at $1,292.52 an ounce.

London Metal Exchange

• Aluminium ended lower for the second day, down 0.2 percent.
• Copper ended lower for the second day, down 0.87 percent.
• Lead ended lower for the third day, down 1.33 percent.
• Tin ended lower for the second day, down 1.32 percent.
• Zinc ended 0.28 percent lower.
• Nickel halted a three-day rally, ended 1.85 percent lower.

Key Events/Data To Watch This Week

• 5:30 p.m.: India March Consumer Price Inflation YoY; Bloomberg estimates at 2.8 percent (prior 2.57 percent).
• 5:30 p.m.: India Feb. industrial production YoY; Bloomberg estimates at 2.0 percent (prior 1.7 percent).

Indian ADRs

Stocks To Watch

• Dewan Housing Finance: Brickwork downgraded ratings of the company across various instruments amounting to Rs 56,550 crore as ‘BWR double A Minus’ (Credit with Negative Implication)-‘Downgraded’. The rating agency said the main reason for this downgrade is on account of limited progress in building up of liquidity, selling/exiting riskier construction finance loans.
• IDBI Bank to consider approval of the proposed Employee Stock Purchase Scheme on April 16. The Bank also stated in its press release that it has reduced MCLR by five basis points to 10 basis points across various tenors with effect from April 12. One-month MCLR at 8.15 percent and one-year MCLR at 9 percent.
• Lumax Autotech signed a JV agreement with Germany’s Jopp Holding for manufacturing and sale of automotive components. Both entities will have 50 percent stake in this joint venture.
• Lumax Industries started a commercial production of PCB from its Haryana Plant with effect from April 11.
• Sterlite Technologies to consider raising funds via NCDs and equity on April 23.
• ICICI Pru Life Insurance reduced stake in Coromandel International by 2.03 percent to 3.06 percent.
• Prabhat Dairy said it completed the sale of its shareholding in its arm ‘Sunfresh Agro Industries’ to Tirumala Products.
• AGC Networks entered into agreement to acquire 100 percent stake in COPC Holdings for $5.5 million. The company says the said acquisition will be completed by April 30.
• HT Media acquired 14.18 percent stake in Next Mediaworks. On Dec. 20 the board had approved purchase of 51 percent stake in the target company.
• Narayan Hrudayalaya incorporated U.S. arm to set up business process and technology consultancy business in the U.S.
• Pasupati Acrylon said that it has commenced commercial production of second line of Cast Polypropylene Film with effect from March 26, with now the total capacity stands at 10,000 MT per annum. (Alert: Company has a market cap of Rs 164 crore)
• Jet Airways said that additional ten aircraft had been grounded due to non-payment of amounts outstanding to lessors. It also suspended its operations to East and Northeast markets from Thursday. (PTI)
  It also suspended long-haul international flights from India until Friday morning, spokeswoman Shefali Mehta says by phone. (Bloomberg News)

Nifty Earnings To Watch

• Infosys
• Tata Consultancy Services

Other Earnings To Watch

• GTPL Hathway
• Tata Metalik
• Tinplate Company of India

Pledge Share Details

• DB Corp promoter group DB Consolidated revoked pledge of 11 lakh shares on April 9.
• Max Financial Services promoter group Max Ventures Holdings revoked pledge of 3.67 lakh shares on April 9.
• Bajaj Consumer Care promoter Bajaj Resources created pledge of 86.83 lakh shares from April 2-5.
• Adani Transmission promoter group Gautam Adani revoked pledge of 2.8 crore shares on April 10.

Who’s Meeting Whom

• Gateway Distriparks to meet Oldbridge Capital on April 12.
• Manappuram Finance to meet BOB Capital Markets on April 12.
• Torrent Power to meet Capital World on April 12.
• PSP Projects to meet Ventura Securities on April 12.

Trading Tweaks

• SQS India BFSI record date for share buyback.
• Tanla Solutions to move into short term ASM framework on April 12.
• MSTC price band revised to 20 percent.
• GPT Infraprojects price band revised to 5 percent.

Insider Trading

• Usha Martin promoter Peterhouse Investments sold 6.6lk shares on April 9.

Money Market Update

• The rupee on Thursday strengthened for the third straight day to its highest since April 3 to close at 68.94/$. It closed at 69.12/$ on Wednesday.

F&O Cues

April Futures

• Nifty open interest down 2 percent sheds 3.5 lakh shares in open interest.
• Bank Nifty open interest down 9 percent sheds 1.6 lakh shares.
• Nifty futures premium at 72 points versus 68.6 points, closed trading at 11,668.9.
• Bank Nifty futures premium at 159 points versus 175.7 points, closed trading at 29,945.

Options

• Nifty PCR at 1.24 versus 1.32 (across all series)

Nifty Monthly Expiry

• Max open interest at 12000 Call (32.9 lakh shares) and 11,000 Put (30.5 lakh shares), 11,500 Put (26.5 lakh shares)
• open interest addition seen for 11,800 Call (3.6 lakh shares), 11,500 Put (3.3 lakh shares)

Stocks In F&O Ban

In Ban

• Dewan Housing Finance Corporation
• DLF
• IDBI
• Jet Airways
• PC Jeweller
• Reliance Power
• Wockhardt
• Dewan Housing*

Out of Ban

• Adani Power

*New in ban

Brokerage Radar

CLSA on Lemon Tree

• Maintained ‘Buy’ with a rice target of Rs 89.
• Acquisitions to fortify leadership position in mid-level segment.
• Management contracts business gaining scale.
• Revenue mix change to help beat industry ADR growth.

Credit Suisse on Havells India

• Downgraded to ‘Neutral’ from ‘Outperform’; cut price target to Rs 780 from Rs 800.
• Cables growth to slow down post elections.
• Lloyd will face margin and growth pressures in summer season.
• Stretched valuations and earnings estimates leave no room for upside.

Morgan Stanley on Avenue Supermarts

• Initiated ‘Underweight’ with a price target of Rs 1,120.
• Solid business, but headwinds emerging.
• Competition is rising and retail is becoming an infinite game.
• Competition means risks to SSSG, operating margins and stock valuations.
• Bull case target Rs 1,850; Bear case target Rs 700.

HSBC on Motherson Sumi

• Maintained ‘Buy’; cut price target to Rs 170 from Rs 233.
• Cut estimates by 15-30 percent on slowing car markets, currency headwinds and slower ramp-up of new plants.
• Keep faith on content growth, strong SMP margins, integration benefit and attractive acquisitions.
• March quarter is expected to be another slow quarter, but expect the current and the next financial year to be strong with free cash flows.

Maybank on Bharti Airtel

• Maintained ‘Hold’; hiked price target to Rs 340 from Rs 300.
• Structural improvements in ARPU to take time.
• Taking steps to improve leverage.
• Better placed than Vodafone Idea but still not a Buy.