The Bombay Stock Exchange (BSE) logo is displayed in front of a bronze bull statue in the Bombay Stock Exchange in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On Feb. 20

Asian stocks climbed after strong earnings sentiment helped boost U.S. equities, while lingering trade concerns lifted Treasuries.

South Korea’s shares led gains, with a regional equities gauge trading at the highest since early October. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.49 percent to 10,667 as of 6:50 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

  • U.S. stocks rose in thin trading as Walmart Inc.’s stellar earnings boosted consumer shares, while Treasuries advanced as investors assessed the prospects for a trade deal with China.
  • The yield on 10-year Treasuries ticked higher to 2.64 percent.

Also read: U.S. Presses China for Stable Yuan as Trade Talks Progress, Sources Say

Asian Cues

  • Japan’s Topix index advanced 0.2 percent.
  • Hang Seng Index futures earlier gained 0.6 percent.
  • South Korea’s Kospi rose 0.5 percent.
  • Australia’s S&P/ASX 200 Index added 0.2 percent.
  • Futures of S&P 500 were flat.

Also read: India Keeps Fighter Jet Makers Waiting. And Waiting. And Waiting

Commodity Cues

  • Brent crude traded lower for the second day, down 0.4 percent.
  • West Texas crude slipped 0.3 percent to $55.95 a barrel.
  • Gold dipped 0.1 percent to $1,339.61 an ounce.

Also read: Modi's Poll Math Puts at Risk $44 Billion Refinery With Saudis

London Metal Exchange

  • Aluminium ended flat.
  • Nickel ended higher for the third day, up 1.65 percent.
  • Copper ended higher for the fifth day, up 0.7 percent.
  • Lead ended lower for the second day, down 0.4 percent.
  • Tin ended 0.12 percent higher.
  • Zinc ended 0.7 percent higher.

Key Events To Watch This Week

  • GST Council Meeting today may decide GST on real estate projects. A panel of ministers has recommended fixing 5 percent as the goods and services tax on under-construction residential properties, Bloomberg reported quoting people with knowledge of the matter.
  • The Federal Reserve will on Wednesday publish minutes from its recent meeting, with the European Central Bank following suit on Thursday.
  • Bank of Canada Governor Stephen Poloz speaks on Thursday; ECB President Mario Draghi speaks on Friday, the same day Reserve Bank of Australia Governor Philip Lowe gives parliamentary testimony.
  • An Indonesian rate decision is due Thursday.

Also read: GST Council To Consider Reducing Tax On Under-Construction Properties

Indian ADRs

All You Need To Know Going Into Trade On Feb. 20

Stocks To Watch

  • Yes Bank offered clarification on its decision to release parts of a confidential risk assessment report days after the Reserve Bank of India censured it for doing so. The bank also stated that it has not made any undue benefit by disseminating the information and was in due compliance.
  • The U.S. Supreme Court Chief Justice John Roberts rejected Indivior’s bid to protect Suboxone film, the company’s treatment for opioid addiction. The court also refused to block Dr. Reddy’s Laboratories and others from selling generic versions of Suboxone film.
  • Coal India, Vedanta: CCEA approved the methodology for allowing the allocation of coal mines for specified end-use or own consumption, to 25 percent of actual production on run of mine basis in open market with payment of additional premium on such sale.
  • Redington India, MIRC Electronics, Dixon Technologies, Shivalik Bimetal Controls: Cabinet approved National Electronic Policy. IT Minister Ravi Shankar Prasad stated that the aim is to target $400 billion by 2025 in electronic manufacturing.
  • TATA Power, Torrent Power: Cabinet approved rooftop solar generation phase II to add 40,000 MW of solar power by 2022.
  • Vedanta clarified on news that the Supreme Court had revoked the National Green Tribunal’s order to open the company’s smelter and it will proceed to file a writ petition before the high court. The company also stated that it is not in the process of submitting any revised bid for Essar Steel.
  • Maharashtra Seamless made payment of Rs 477 crore for the acquisition of United Seamless Tubulaar as per the insolvency resolution process as approved by the NCLT.
  • Reliance Power clarified on the news that lenders won’t sell ADAG group stocks till Sept. 30 stating that information relates to the promoter group and not the company.
  • Majesco arm received a contract for digital solutions from American Public Life Insurance Company.
  • JK Tyre and Industries appointed Sanjeev Aggarwal as CFO of the company with effect from Feb. 18.
  • Essel Propack received further Rs 40 crore towards repayment of outstanding dues of inter corporate deposit. The company had already received Rs 25.3 crore last month and the company stated that the balance amount is expected to be received by March.
  • Prism Johnson issued letter of intent for an EPC contract to set up a 22 MW power generation system in Madhya Pradesh. This system would require an investment of Rs 200 crore and would be commissioned by June 2020.
  • Sanofi clarified on the news that the High Court quashing he case against the company. The said litigation pertains to honorarium paid by the Company to a doctor in relation to patient education initiatives. The company says that his litigation is not a material event.
  • Emami Realty approved raising Rs 100 crore via NCDs.

Also read: Jet Air Bailout Puts Focus on India Banks’ Debt-to-Equity Losses

Earnings To Watch

  • Mahindra CIE Automotive
  • Varun Beverages

Bulk Deals

  • Engineers India: ICICI Prudential MF acquired 33.08 lakh shares or 0.52 percent equity at Rs 107.63 each.
  • National Aluminium Company: ICICI Prudential MF acquired 94.45 lakh shares or 0.51 percent equity at Rs 50.09 each.

Trading Tweaks

  • Music Broadcast ex-date for share split from Rs 10 to Rs 2 per share.

Who’s Meeting Whom

  • IIFL Holdings to meet HSBC Global AMC, First Voyager Advisors and other investors from Feb. 20-22.

Insider Trading

  • Apollo Tyres promoter group PTL Enterprises acquired 60,000 shares on Feb.15.
  • Nava Bharat Ventures promoter group acquired 60,000 shares on Feb.18.
  • Steel Strip Wheels promoter Sunena Garg acquired 46,200 shares on Feb.18.
  • Cox & Kings promoter Liz Traders & Agents acquired 48,000 shares on Feb.15.
  • GodreJ Agrovet promoter Godrej Industries acquired 58,000 shares between Feb.15-18.

Money Market Update

  • The rupee on Monday closed at 71.34/$ versus Friday’s closing of 71.23/$.

(Currency markets were closed on Feb. 19)

Also read: Rupiah Holds Edge Over Rupee in Currency Battle as Polls Near

F&O Cues

  • Nifty February futures closed trading at 10617, premium of 13 points.
  • Max open interest for Feb. 28 series at 11,000 Call (open interest at 41.5 lakh shares).
  • Max open interest for Feb. 28 series at 10,400 Put (open interest at 31.1 lakh shares).
All You Need To Know Going Into Trade On Feb. 20

Stocks In F&O Ban

In Ban

  • Adani Enterprises
  • IDBI
  • Jet Airways
  • Reliance Power
  • PC Jeweller
  • Reliance Infrastructure

Out of Ban

  • CG Power
  • Jain Irrigation

Put-Call Ratio

  • Nifty PCR at 1.12 versus 1.13.
  • Bank Nifty PCR at 0.96 versus 0.94.
All You Need To Know Going Into Trade On Feb. 20

Brokerage Radar

JPMorgan on M&M

  • Downgraded to ‘Neutral’ from ‘Overweight’; cut price target to Rs 700 from Rs 900.
  • Downgraded the stock due to moderating growth trends and lack of catalysts.
  • Valuations are cheap but unlikely to improve in a hurry.
  • Concerns: Tractor volume growth peaking, demand slowdown and margin pressure.

Edelweiss on CRISIL

  • Downgraded to ‘Reduce’ from ‘Hold’ with a price target at Rs 1,331.
  • December quarter’s research segment remained subdued due to maturing the U.S. regulations.
  • Rating segment is likely to remain subdued over the short term.
  • Management has guided for overall mid-single-digit sales growth for 2019.

On Indian Hotels

JPMorgan

  • Maintained ‘Overweight’ with a price target at Rs 160.
  • Company reiterated its focus on balance sheet optimisation, profitable growth
  • Company was confident of achieving its stated margin target of 25 percent by March 2023.
  • Path to achieving cost optimisation to be driven by incremental improvements.

Motilal Oswal

  • Maintained ‘Buy’ with a price target at Rs 189.
  • Company confident of 2022 goal of being an iconic and profitable hospitality company.
  • Industry tailwinds and cost reduction will aid margin expansion.
  • Focusing on monetizing existing landbank and employing asset-light model.