All You Need To Know Going Into Trade On Feb. 5
Stocks gained in Japan and Australia Tuesday, while multiple Asian markets remained closed for the Lunar New Year.
Australia's finanical shares rallied after the results of a yearlong inquiry into misconduct in the financial services sector published Monday were not as harsh as had been anticipated.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded a little changed at 10,945.50 as of 7 a.m.
Short on time? well, then listen to this podcast for a quick summary of the article!
Here’s a quick look at all that could influence equities today.
U.S. Market Check
- U.S. stocks rose for a fourth day, with technology shares leading the advance in thin trading ahead of a fresh batch of earnings reports.
- The yield on 10-year Treasuries held at 2.72 percent.
- Japan’s Topix index rose 0.4 percent.
- Australia’s S&P/ASX 200 Index rose 1.7 percent.
- S&P 500 futures were flat.
- Brent crude halted a four-day rally, ended 0.38 percent to $62.51 per barrel.
- West Texas Intermediate rose 0.3 percent to $54.73 a barrel.
- Gold was stable at $1,311.72 an ounce.
London Metal Exchange
- Aluminium resumed rally after a one-day blip, ended 1.9 percent higher.
- Nickel ended higher for the fifth day, up 4.7 percent.
- Tin halted a four-day rally, ended 0.43 percent lower.
- Zinc ended higher for the fourth day, up 0.86 percent.
- Lead ended higher for the fourth day, up 0.05 percent.
- Copper resumed rally after a one-day blip, ended 1.4 percent higher.
Key Events To Watch This Week
- 10:30 a.m.: Nikkei India Services PMI for January, prior 53.2.
- 10:30 a.m.: Nikkei India Composite PMI for January, prior 53.6.
- Asian markets closed Tuesday: China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Pakistan
- Trump delivers a delayed State of the Union address Tuesday
- On Wednesday, Federal Reserve Chairman Jerome Powell gives his first public comments following the January FOMC meeting and rate decision.
- Central banks in Australia, India and the U.K. set rates this week
Also read: Monetary Policy: If Not Cut Now, When?
Stocks To Watch
- Coal India approved a buyback of 4.46 crore equity shares or 0.72 percent of outstanding equity shares at Rs 235 per share aggregating up to Rs 1,050 crore.
- The Telecom Tribunal canceled a Rs 2,000 crore demand on Reliance Communications, upholding the company’s petition against Telecom Department on one-time spectrum charge issue. The tribunal has asked the telecom department to return the bank guarantee of Rs 2,000 crore as per its earlier order passed on July 3 2018.
- HEG’s board approved the appointment of Gulshan Kumar Sakhuja as Chief Financial Officer of the company while group arm-Bhilwara Energy’s Chief Executive Officer OP Ajmera will also become the group CFO.
- Mahindra said that the company will offer pro-active inspection of Rear Axles on its Imperio vehicles manufactured between April to June last year. Inspection to be carried out free of cost and the company also stated that this action is in compliance with SIAMs voluntary code on voluntary recall.
- Future Retail approved allotting four crore convertible share warrants worth Rs 2,000 crore to promoter group ‘Future Coupons’ and issuing NCDs up to Rs 750 crore.
- Moody’s changes Vedanta’s outlook to negative from stable, affirms all ratings.
- IDBI Bank applied for a name change post LIC’s acquisition of majority shareholding. The bank sought approval for name change to LIC IDBI Bank (first preference) or LIC Bank (second preference).
- Bharti Infratel shareholders approved amalgamation of Indus Towers with the company.
- Bharat Financial Inclusion completed its seventh direct assignment transaction of Rs 751.19 crore. With this, the company said direct assignment transactions worth Rs 5,448.4 have been completed in financial year 2019.
- SRF appointed Rahul Jain as CFO with effect from April 1. He will be replacing outgoing CFO Anoop Joshi. It also approved project for manufacture of agrochemical intermediate for Rs 140 crore.
- Dr. Reddy’s Laboratories: Indivior Loses Bid for Rehearing in Suboxone Patent Case. Indivior Plc was rejected by a U.S. appeals court in its effort to prevent Dr. Reddy’s from selling a generic version of Suboxone Film opioid addiction treatment.
- Bharti Airtel: Long-term rating downgraded by one notch to Ba1 from Baa3 by Moody’s
Nifty Earnings To Watch
- Hindustan Petroleum Corporation
- Tech Mahindra
Other Earnings To Watch
- Aditya Birla Capital
- Ador Welding
- Adlabs Entertainment
- AksharChem India
- Apollo Pipes
- Apollo Tyres
- Arshiya Asahi Songwon Colors
- Bharat Heavy Electricals
- Birla Corporation
- Blue Star
- Bombay Dyeing & Mfg Company
- Brigade Enterprises
- Century Plyboards
- Dish TV
- Fairchem Speciality
- Future Enterprises
- IDFC First Bank
- INOX Leisure
- JBF Industries
- LT Foods
- Mangalore Refinery & Petrochemicals
- Prataap Snacks
- Praxis Home Retail
- Punjab National Bank
- Reliance Infrastructure
- RPG Life Sciences
- Singer India
- Suven Life Sciences
- Tata Chemicals
- Tata Global Beverages
- Timken India
- Torrent Power
- Trigyn Technologies
- Tube Investments of India
- United Bank of India
- Usha Martin
- V-Mart Retail
- Zenlabs Ethica
- Deccan Gold Mines
- Emami Paper Mills
- HCL Infosystems
- Hitech Corporation
- Jai Corp
- Oswal Greentech
- Saint-Gobain Sekurit
- Snowman Logistics
Earnings Reaction To Watch
Godrej Agrovet (Q3, YoY)
- Revenue up 19.1 percent at Rs 1,454.1 crore.
- Net profit down 17.5 percent at Rs 40.9 crore.
- Ebitda up 4.1 percent at Rs 101 crore.
- Margin at 6.9 percent versus 7.9 percent.
- Exceptional profit of Rs 12 crore.
SRF (Q3, YoY)
- Revenue up 40.6 percent at Rs 1,964 crore.
- Net profit up 26.3 percent at Rs 165.7 crore.
- Ebitda up 42.9 percent at Rs 331 crore.
- Margin at 16.9 percent versus 16.6 percent.
- Other income of Rs 21 crore.
- Declares dividend of Rs 6 per share.
Future Retail (Q3, YoY)
- Revenue up 12.9 percent at Rs 5,301.1 crore.
- Net profit up 10 percent at Rs 201.4 crore.
- Ebitda up 29.3 percent at Rs 277.8 crore.
- Margin at 5.2 percent versus 4.6 percent.
Balrampur Chini Mills (Q3, YoY)
- Revenue down 6 percent at Rs 941 crore.
- Net profit up 97 percent at Rs 120 crore.
- Ebitda up 46 percent at Rs 159.5 crore.
- Margin at 17 percent versus 10.9 percent.
Novartis (Q3, YoY)
- Revenue down 13.1 percent at Rs 135.6 crore.
- Net profit down 31 percent at Rs 12.9 crore.
- Ebitda up 5.9 percent at Rs 12.6 crore.
- Margin at 9.3 percent versus 7.6 percent.
- Provision made for reversal of stock for Rs 9 crore.
NRB Bearing (Q3, YoY)
- Revenue up 17 percent at Rs 242.6 crore.
- Net profit up 25.8 percent at Rs 26.8 crore.
- Ebitda up 5.3 percent at Rs 42 crore.
- Margin at 17.3 percent versus 19.2 percent.
- Reversal of stock at Rs 19 crore versus Rs 7.7 crore.
- Amber Enterprises: GMO Emerging Domestic Opportunities Fund sold 3.5 lakh shares or 1.1 percent equity at Rs 680.08 each.
- Promoter Kunjal Investments Private acquired 1.05 lakh shares (1.04 percent) at Rs 1,002.45 each.
- Nalanda India Fund sold 1.4 lakh shares (1.48 percent) at Rs 1,002.45 each
- Container Corporation of India record date for bonus of 1:4
- Odisha Cement price band revised to 20 percent.
- Zee Media Corp, Prabhat Dairy price band revised to 5 percent.
Who’s Meeting Whom
- Shriram Transport Finance to meet HSBC Global AMC (UK) on Feb. 5.
- BSE to meet GKFF Ventures LLC on Feb. 5.
- Zee Entertainment Promoter Cyquator Media Services sold 1.62cr shares and Promoter Essel Corporate LLP sold 91.45 lakh shares between Jan. 25 and Feb. 1.
- Bliss GVS Pharma promoters sold 1.1 crore shares on Feb. 1.
- Confidence Petroleum promoter Confidence LPG Bottling and other promoters acquired 2.25 lakh shares between Jan. 29 and Feb. 1.
- Zee Media Corporation Promoter Arm Infra and Utilities sold 1.12 crore shares and Promoter 25 FPS Media sold 1.45 crore shares from Jan. 28-29.
Money Market Update
- The rupee on Monday weakened for the second straight day and closed at its lowest since Dec. 14 at 71.81/$ . It closed at 71.25/$ on Friday
- Nifty February futures closed trading at 10,937, premium of 15 points.
- Max open interest for February series at 11,000 Call, (open interest at 33.7 lakh shares.)
- Max open interest for February series at 10,700 Put, (open interest at 31.2 lakh shares.)
Stocks In F&O Ban
- IDBI Bank
New in Ban:
- Nifty PCR at 1.67 versus 1.63.
- Nifty Bank PCR at 1.04 versus 0.8.
Morgan Stanley on Future Retail
- Maintained ‘Overweight’; cut price target to Rs 660 from Rs 745.
- December quarter results: Another steady quarter for the core business.
- Cut estimates to reflect lower operating margins.
- Negatives: longer-than-expected integration of Hypercity acquisition and weak performance of small-format stores in South.
- Promoter equity infusion to fund buyout of operating assets is step in right direction.
CLSA on Future Lifestyle
- Maintained ‘Buy’; hiked price target to Rs 560 from Rs 470.
- Robust same-store sales growth drives earnings beat.
- Aggressive expansion in brand factory continues.
- Strong growth visibility and balance sheet on improving trajectory.
CLSA on Aditya Birla Fashion
- Maintained ‘Buy’; hiked price target to Rs 265 from Rs 240.
- Robust revenue growth drives beat.
- Pantaloons same-store sales growth and margin trend encouraging.
- See multiple growth triggers for Aditya Birla Fashion.
HSBC on JSPL
- Maintained ‘Buy’; cut price target to Rs 180 from Rs 190.
- Better than expected realisations result in strong performance from standalone.
- Delivery on deleveraging is a big positive.
- Robust volume growth, cheap valuations and deleveraging should help stock rerate.
UBS on SRF
- Maintained ‘Buy’ with a price target of Rs 2,400.
- Headline numbers were quite inline, but chemical segment margins disappointed.
- Specialty chemical failed to perform.
- Believe market could react negatively.
- Maintained ‘Buy’ with a price target of Rs 335
- December quarter earnings preview: In line but below consensus estimate.
- Miss in net profit sharper due to higher tax & low other income.
- Expect earnings growth to accelerate as technology investments start paying off.
- Maintained ‘Neutral’; cut price target to Rs 236 from Rs 272.
- Stable revenue growth, but margins fail to lift.
- See further risk to margin expansion.
- Believe Exide will continue to face market share pressure as peer expands capacity.