All You Need To Know Going Into Trade On Aug. 9

Asian shares pushed higher Friday as positive sentiment from a strong session on Wall Street outweighed a resurfacing of trade tensions.

Stocks rose in Tokyo, Seoul and Sydney even as Bloomberg reported that the U.S. is holding off Huawei licenses as China is halting purchases of U.S. farming goods. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was up 0.1 percent at 11,085 as of 7:15 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

BQ Live

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

• Most Asian stocks rose even as Bloomberg reported the White House is holding off on a decision about licenses for U.S. companies to restart business with Huawei Technologies Co. after Beijing said it was halting purchases of U.S. farming goods.
• Earlier, the S&P 500 gained almost 2% as investors took solace from efforts to stabilize the yuan. The dollar was little changed as was the offshore yuan.
• Oil snapped a three-day losing streak after Saudi Arabia contacted other producers to discuss options to stem a rout that’s been driven by the worsening China trade conflict.
• Gold futures rose 0.5 percent to $1,505 an ounce.

Get your daily fix of global markets here.

Earnings Reaction To Watch

Page Industries (Q1, YoY)

• Revenue rose 2.4 percent to Rs 835 crore. (estimate Rs 890 crore)
• Net profit fell 11 percent to Rs 110.7 crore. (estimate Rs 125.8 crore)
• Ebitda fell 1.4 percent to Rs 186.7 crore. (estimate Rs 195.6 crore)
• Margin stood at 22.4 percent versus 23.2 percent.
• Employee expenses rose 19 percent to Rs 128.5 crore.
• Declares dividend of Rs 51 per share.

Hexaware Technologies (Q2 CY19, QoQ)

• Revenue rose 3.5 percent to Rs 1,308.3 crore. (estimate Rs 1314.5 crore)
• Net profit rose 9.3 percent to Rs 151.4 crore. (estimate Rs 150.7 crore)
• EBIT rose 9.5 percent to Rs 190.3 crore. (estimate Rs 190.6 crore)
• Margin to 14.5 percent versus 13.8 percent.

Mahanagar Gas (Q1, YoY)

• Revenue rose 22.3 percent to Rs 757.5 crore.
• Net profit rose 32.7 percent to Rs 170.2 crore.
• Ebitda rose 31.2 percent to Rs 276.9 crore.
• Margin stood at 36.6 percent versus 34.1 percent.

Tata Chemicals (Q1, YoY)

• Revenue rose 5.6 percent to Rs 2,896.9 crore. (estimate Rs 3020 crore)
• Net profit rose 16.4 percent to Rs 239.7 crore. (estimate Rs 250 crore)
• Ebitda rose 20.7 percent to Rs 592.3 crore. (estimate Rs 546 crore)
• Margin stood at 20.4 percent versus 17.9 percent.
• Deprecation rose 21 percent to Rs 163.5 crore.

NBCC (Q1, YoY)

• Revenue fell 16.4 percent to Rs 1,891.1 crore.
• Net profit fell 38.4 percent to Rs 48.9 crore.
• Ebitda fell 64.7 percent to Rs 27.1 crore.
• Margin stood at 1.4 percent versus 3.4 percent.

Infibeam Avenues (Q1, YoY)

• Revenue fell 27.3 percent to Rs 185.5 crore.
• Net profit rose 2.2 times to Rs 28 crore.
• Ebitda rose 39.1 percent to Rs 37.7 crore.
• Margin to 20.3 percent versus 10.6 percent.
• Profit of Rs 15 crore from associates in base quarter.

Nifty Earnings To Watch

• Bharat Petroleum Corporation
• Britannia
• GAIL
• Hindalco

Other Earnings To Watch

• SpiceJet
• NHPC
• MRF
• Sobha
• Pfizer
• Bharat Heavy Electricals
• Sun TV Network
• Natco Pharma
• Steel Authority of India
• Subros
• Cadila Healthcare
• Tourism Finance Corporation of India
• State Trading Corporation Of India
• Speciality Restaurants
• Garden Reach Shipbuilders & Engineers
• Oil India
• Gujarat Alkalies & Chemicals
• Gujarat State Financial Corporation
• Himatsingka Seide

• NCC
• NCL Industries
• Honeywell Automation
• Inox Wind
• ITD Cementation
• Jtekt India
• Kirloskar Oil Engines
• Meghmani Organics
• Amber Enterprises
• Arvind Fashions
• Balaji Telefilms
• Forbes
• Nitco
• NRB Bearing
• Prakash Industries
• PSP Projects
• Responsive Industries
• S H Kelkar
• Shipping Corporation Of India
• TV Today Network
• Uniphos Enterprises
• V.S.T Tillers Tractors
• Varroc Engineering
• Century Plyboards
• Future Consumer
• IG Petrochemicals
• Jamna Auto Industries
• Mirza International
• Narayana Hrudayalaya
• Neogen Chemicals
• Prataap Snacks
• Reliance Communications
• Shree Cement
• Sreeleathers

Brokerage Radar

BofA Securities on BHEL

• Upgraded to ‘Neutral’ from ‘Underperform’, hiked price target to Rs 58 from Rs 55.
• BHEL's market cap should act as a valuation support now.
• Order flow could inflect despite weak power demand.
• Potential divestments, worsening working capital are key risks.

CLSA on Emami

• Maintained ‘Buy’; Cut price target to Rs 400 from Rs 450.
• Earnings beat but growth recovery a must for stock performance.
• Better margin on cost control and higher other income.
• No volume growth in the domestic market.

On UltraTech

CLSA

• Maintained ‘Buy’; raised price target to Rs 5,400 from Rs 5,270.
• Unit Ebitda rallied close to an all-time high of more than Rs 1,400 per tonne.
• Pali expansion put on hold shows the urgency to de-risk balance sheet.
• Volume growth at 2 percent year-on-year to 17.9 million tonne was below forecast

JPMorgan

• Maintained ‘Overweight’ with a price target at Rs 5,250.
• June quarter delivers record Ebitda per tonne and debt reduction.
• Recent stock correction offers a buying opportunity.
• Volume growth in line; 2019-20 industry growth guidance of 6-7 percent.
• De-leveraging remains the key focus

On Page Industries

Credit Suisse

• Maintained ‘Underperform’; cut price target to 15,500 from Rs 18,700.
• Volume declines for the first time as slowdown and competitive pressures combine.
• Management says volume decline was not driven by channel destocking.
• Management said that end-consumer demand is very weak; no signs of pick up in second quarter.

Macquarie

• Maintained ‘Underperform’ with a price target at Rs 16,000.
• Losing dominance in the Men’s innerwear segment.
• Competition is intensifying with some of the new players gaining critical mass.
• See meaningful downside to the consensus numbers.

Indian ADRs

Stocks To Watch

• Yes Bank launched a qualified institutional placement issue to help it meet an urgent need for capital. The private sector lender said that the capital raising committee of its board had approved the opening of the QIP issue. The floor price for issue set at Rs 87.9 per share. The bank’s capital raising committee may offer a discount of not more than 5 percent on the floor price, it added.
• Reliance Capital, Reliance Home Finance said its joint auditors have confirmed that there are “no violations” as alleged by Price Waterhouse & Co Chartered Accountants LLP. “The board took note of the views of the other joint auditors, who have been auditors of the company for the last three financial years and continue as the sole statutory auditors of the company, confirming that there are no violations as alleged by PWC under Section 143 (12) of the Companies Act, 2013,” the statement on the exchange filing said.
• Lakshmi Vilas Bank said that it is working in close co-operation with Indiabulls Housing Finance to ensure all regulatory approvals are received for the planned amalgamation of both the entities. Lakshmi Vilas Bank completed preferential allotment of 1.68 crore equity shares, aggregating to Rs. 188.16 crore to Indiabulls Housing Finance. Bank’s Tier-1 Capital now at 5.56 percent, CAR at 7.56 percent, where both of the fore mentioned ratios were strengthened by 110 basis points. The bad loan recovery over four quarters has totalled to Rs 783 crore.
• Endurance Technologies withdraws plans to enter two-wheeler tyre business. The stock had hit 20 percent lower circuit after the company had announced its plans on the exchanges during market hours.
• Jamna Auto Industries has made changes in production schedule for all its plants. The plants may not run or partially run on all working days in August and shall carry out routine maintenance and cleaning during non-working days.
• Coffee Day Enterprises appointed EY to investigate into the circumstances leading to statements made in the purported letter of the former Chairman VG Siddhartha dated July 27 and to scrutinize the books of accounts of the company and its subsidiaries. Besides, ICRA cut Coffee Day Enterprises’ rating for term loans three notches to ‘BB+’ from ‘BBB+’, citing refinancing risks for the coffee chain and its units after founder VG Siddhartha’s death, according to Bloomberg report.
• Nalco signed a joint venture agreement with Mishra Dhatu Nigam for setting up of high end aluminium alloys plant for manufacturing of Plates, Sheets, etc.
• SBI: Managing Director Dinesh Kabra’s term extended further for a period of two years with effect from Aug. 9.
• Bodal Chemicals acquired 80 percent stake in Sen-er for $4.5 million.
• DHFL may not be able to meet repayments coming up in the immediate future, the company said in a stock exchange filing.
• Cochin Shipyard launched two Ro Pax Vessels for Inland Waterways Authority of India.
• IDBI Bank reduced MCLR by 5-15 basis points with effect from Aug.12. One-month MCLR at 8.1 percent and one-year MCLR at 8.85 percent.
• Oriental Bank of Commerce revised MCLR rates across various tenors with effect from Aug. 10. One-month MCLR at 8.2 percent and one-year MCLR at 8.65 percent.
• Vodafone Idea: CARE Ratings downgraded long Term Bank Facilities and Non-Convertible Debentures to ‘CARE A’ from ‘CARE A+’, with outlook remaining negative.
• GMR Infrastructure: Board approved raising Rs 2,500 crore via equity and Rs 57.4 crore via debentures.
• Marico increased its stake in Revofit from 23 percent to 37 percent.
• Amara Raja Batteries promoter RN Galla family increased their stake from 26.06 percent to 28.06 percent.
• Suzlon Energy is said to propose $1.2 billion deal to settle stressed debt, Bloomberg reported quoting people with knowledge of the matter.
• IL&FS Investment Managers arm’s offshore investors of Realty Fund would not be extending their agreement with effect from Aug. 9.
• 8K Miles Software Services: Chairman Suresh Venkatachari said that the company entered into new projects.

Offerings

• Sterling & Wilson Solar IPO gets 92 percent demand for shares offered, closes successfully.

Datawatch

• 5:30 p.m.: India June industrial production; (estimate 1.4 percent; prior 3.1 percent)

Bulk Deals

• Reliance Infra: KBC Equity Fund sold 24.1 lakh shares or 0.93 percent equity at Rs 47.17 each.

CARE Ratings

• BMO Investments II Ireland acquired 1.55 lakh shares or 0.53 percent equity at Rs 548.72 each.
• Reliance Banking Fund sold 1.7 lakh shares or 0.58 percent equity at Rs 548.19 each.

Affle (India)

• Reliance Mutual Fund acquired 9.5 lakh shares at Rs 918.19 each.
• Kuwait Investment Authority acquired 2.63 lakh shares at Rs 885.27 each.

Trading Tweaks

• Smartlink Holdings ex-date for share buyback.
• Andhra Cements to move into short term ASM Framework.
• Reliance Home Finance price band revised to 5 percent.

Insider Trading

• Filatex promoter group acquired 4 lakh shares from Aug. 6-7.
• Vodafone Idea promoters acquired 19 lakh shares on Aug. 6.

Money Market Update

India's rupee is set to start stronger today on reports that the government may rollback a surcharge on foreign funds announced in the July budget.

Nevertheless, the currency is headed for its worst week this year amid a worsening U.S.-China trade war and heightened political tensions in the Kashmir region. Implied opening from forwards suggest spot may start trading around 70.60 per dollar, having ended at 70.6975 on Thursday, and down more than 1.5 percent so far this week.

In the debt market, bonds are likely to trade in a range with the Reserve Bank of India set to sell 170 billion rupees of government bonds later in the day. The 10-year bond yield was up 3 basis points at 6.4 percent on Thursday and up 5 basis points so far this week after the RBI put in doubt the chance of deeper rate cuts in the coming months, having resorted to an unconventional 35 basis points cut on Wednesday.

F&O Cues

August Futures

• Nifty futures closed at 11,063.9, premium of 31.5 points versus 18.7 points.
• Nifty futures open interest down 1 percent, sheds 2 lakh shares in open interest.
• Bank Nifty futures closed at 28,239.9, premium of 129.5 points versus 46 points.
• Bank Nifty futures open interest down 4 percent, sheds 70,000 shares in open interest.

Options

• Nifty PCR at 1.21 versus 0.97 (across all series)

Nifty Weekly Expiry Aug. 14

• Max open interest on call side at 11,100 (11.8 lakh shares).
• Max open interest on put side at 10,900 (10.9 lakh shares).
• Max open interest addition seen in 10,900P (+8.6 lakh shares), 11,000P (+8.2 lakh shares).

Nifty Monthly Expiry Aug. 29

• Max open interest on call side at 11,500 (23.5 lakh shares)
• Max open interest on put side at 11,000 (34 lakh shares)