All You Need To Know Going Into Trade On Jan. 15
Asian stocks stayed under pressure Tuesday, following a decline in their U.S. counterparts after weak economic data in Europe and China Monday added to concerns about slowing global growth.
Equities traded lower in Japan and were little changed in Australia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.42 percent to 10,814 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
- U.S. stocks declined as weak Chinese trade data fuelled concerns about slowing global growth.
- The yield on 10-year Treasuries were steady at 2.70 percent.
- Japan’s Topix fell 0.5 percent.
- S&P/ASX 200 rose 0.1 percent.
- S&P 500 futures rose 0.2 percent.
- West Texas Intermediate crude fell 0.1 percent to $50.73 a barrel.
- Brent crude declined for the second straight trading session, down 2.46 percent to $58.99 per barrel.
- Gold was little changed at $1,292.47 an ounce.
London Metal Exchange
- Aluminium ended lower for the second day, down 0.44 percent.
- Lead halted a six-day rally, down 0.95 percent.
- Copper ended 0.76 percent lower.
- Tin ended higher for the sixth day, up 0.86 percent.
- Zinc ended 0.32 percent lower.
Key Events/Data To Watch This Week
- India December trade balance, Bloomberg estimates at $14.5 billion deficit, prior $16.7 billion deficit.
- India December Exports YoY, prior 0.8 percent.
- India December Imports YoY, prior 4.3 percent.
Stocks To Watch
- Bio-Thera said that it had reached its licensing agreement with Cipla for bevacizumab biosimilar under which Cipla will have exclusive rights to distribute and market the cancer biosimilar drug in select emerging markets. (Bloomberg News)
- Bharti Airtel said that it had paid its due to Aircel Group companies on Jan. 10, after the Supreme Court passed orders to the effect that bank guarantees worth Rs 453 crore shall stand cancelled.
- Wipro board said it was considering a proposal of issue of bonus shares in a meeting to be held between Jan. 17-18. The decision will be reported to the exchanges on Jan. 18.
- Indiabulls Venture said it was selling its stock broking business on a slump sale basis to wholly owned arm. There is no agreement, yet. Net worth of broking business is about 15 percent to the total net worth of the company.
- The Reserve Bank of India imposed monetary penalty of Rs 1 crore on Bajaj Finance due to regulatory compliance issues. (RBI Press Release)
- Wendt said that a fire accident took place at its Electro-Plating Facility in Tamil Nadu. No significant impact on operations was reported as the company has an alternative facility to ensure no disruption.
- Welspun Corp management said that Intech Metals sold 0.11 percent stake in last three weeks as ‘public shareholder’. They also stated that Chairman BK Goenka controlled MGN Agro Properties acquired 0.34 percent stake in last 7 days.
- Post amalgamation of Vora Soaps with Godrej Industries, after post allotment and cancellation of equity shares between both the entities, promoter shareholding in the company reduced from 74.72 percent to 61.33 percent.
- ICRA upgraded the long term rating of Relaxo Footwears to ‘AA’ with stable outlook from ‘AA-’ with positive outlook for term loans worth Rs 189.7 crores.
- Tata Power said that its Singapore-based resurgent power had undergone internal restructuring but shareholding of Tata Power’s arm in the power company has remained the same at 26 percent. Recently Resurgent Power had signed a share purchase agreement to acquire 75.01 percent stake in Prayagraj Power Generation Corporation and Tata Power’s management stated that this acquisition will be completed.
- Shakti Pumps extended its production shut down till Jan. 15. The company’s operation has been shut since Jan. 9 due to labour contractor issues with the company.
- Corporation Bank revised MCLR across various tenors with effect from Jan. 15. One month MCLR is at 8.25 percent and one-year MCLR at 8.95 percent.
- Hindusthan National Glass & Industries board decided to defer its proposed fund-raising plans via private placement of debentures.
- Axiscades Engineering Technologies board approved legal actions to recover dues amounting to $934,765 against its U.S. customer. The company has already provided a 100 percent provision for the said item.
- United Spirits to sell stake in Four Seasons Wines for Rs 31.86 crore. Four Seasons had a revenue of Rs 12.6 crore and negative networth of Rs 67 crore as of previous financial year.
Earnings Reaction To Watch
Tata Metaliks (Q3, YoY)
- Revenue up 11.5 percent at Rs 546.4 crore.
- Net profit down 2 percent at Rs 39.6 crore.
- Ebitda up 2.8 percent at Rs 74.7 crore.
- Margin at 13.7 percent versus 14.8 percent.
- Recorded its highest quarterly sale of Ductile Iron Pipe which was up 32 percent at Rs 319.3 crore.
Indiabulls Ventures (Q3, YoY)
- Net interest income up 2.2 times at Rs 375.4 crore.
- Net profit up 2.4 times at Rs 120.6 crore.
- AUM at Rs 10,453 crore.
- Loan disbursement at Rs 1375 crore.
ICICI Securities (Q3, YoY)
- Total revenue down 18 percent to Rs 406 crore.
- Net profit down 33 percent at Rs 102 crore.
- Brokerage revenue down 17 percent to Rs 227 crore vs Rs 274 crore due to subdued market conditions.
- Distribution revenue down 11 percent to Rs 107 crore due to mutual fund regulatory changes.
- Investment banking revenue down 37 percent to Rs 25.6 crore due to subdued primary market.
Nifty Earnings To Watch
- Zee Entertainment Enterprises
Other Earnings To Watch
- Den Networks
- Hindustan Media Ventures
- Jay Bharat Maruti
- KPIT Technologies
- Multi Commodity Exchange
- Network18 Media & Investments
- Speciality Restaurants
- TV18 Broadcast
- Tinplate Company of India
- R Systems International
- Indo Rama Synthetics
- InfoBeans Technology: Maven India Fund sold 10 lakh shares at Rs 65.52 each.
Shakti Educational Initiatives
- Albula Investment Fund sold 1.84 lakh shares or 1.14 percent equity at Rs 138.9 each.
- Veena Investments acquired 1.84 lakh shares or 1.14 percent equity at Rs 138.9 each.
- Gujarat Gas ex-date for stock split from Rs 10 to Rs 2 per share.
- Welspun Corp promoter group Intech Metal S.A. sold 74,000 shares on Jan. 11.
- Nandan Denim promoter group Chiripal Exim LLP acquired 50,000 shares on Jan. 11
- Man Infra promoter and director Parag K. Shah acquired 43,500 shares on Jan. 11.
(As reported on Jan. 14)
Money Market Update
- The rupee on Monday closed at 70.93/$ versus Friday’s closing of 70.50/$.
- Nifty January futures closed trading at 10,770, premium of 33 points.
- Max open interest for January series at 11,000 strike value call, (open interest at 49.2 lakh shares).
- Max open interest for January series at 10,500 strike value put, (open interest at 38.4 lakh shares).
Stocks In F&O Ban
- Adani Power
- Jet Airways
- Nifty PCR at 1.35 versus 1.46.
- Nifty Bank PCR at 0.84 versus 0.92.
CLSA on ICICI Securities
- Maintained ‘Buy’; cut price target to Rs 360 from Rs 380.
- Weak markets and tighter norms on mutual fund fees drag profits; cut earnings forecast.
- Growth in active client base has also moderated.
- Valuations reasonable; trades at par with global peers.
Kotak on Motherson Sumi
- Maintained ‘Sell’; cut price target to Rs 140 from Rs 150.
- Global headwinds to weigh on the stock; cut FY19-21 earnings estimates by 8-10 percent.
- Key customers likely to face challenging environment in 2019.
- Despite sharp correction, believe earnings downgrade cycle is not yet over.
Emkay on Radico Khaitan
- Maintained ‘Buy’ with a price target of Rs 547.
- Plant visit reaffirms view – a solid long-term growth story.
- Molasses season in UP is progressing; expect prices to be in line with last year.
- Expect strong December quarter with 46 percent growth in earnings to be catalyst for the stock price.
Morgan Stanley on Indian IT
- Advise defensiveness and selectivity in IT service stocks as we enter 2019.
- Estimates reflect robust deal pipelines, but margins at risk.
- Weak dollar and tight labour markets spur cost inflations.
- Downgrade TCS on expensive valuations and HCL Tech due to tepid growth expectations.
- Upgrade Infosys due to favourable risk reward.
Morgan Stanley on Large Cap IT
- TCS: Downgraded to ‘Equal-weight’ from ‘Overweight’; cut price target to Rs 1,920 from Rs 2,260.
- Infosys: Upgraded to ‘Overweight’ from ‘Equal-weight’; hiked price target to Rs 775 from Rs 759.
- HCL Tech: Downgraded to ‘Underweight’ from ‘Overweight’; cut price target to Rs 905 from Rs 1,200.
- Tech Mahindra: Maintained ‘Overweight’; cut price target to Rs 830 from Rs 880.
Morgan Stanley on Mid Cap IT
- Mindtree: Downgraded to ‘Underweight’ from ‘Overweight’; cut price target to Rs 761 from Rs 1,265.
- Persistent: Downgraded to ‘Underweight’ from ‘Overweight’; cut price target to Rs 500 from Rs 760.
- Hexaware: Maintained ‘Underweight’; cut price target to Rs 350 from Rs 385.
- Cyient: Maintained ‘Overweight’; cut price target to Rs 720 from Rs 790.
- Mphasis: Maintained ‘Overweight’; cut price target to Rs 1,100 from Rs 1,185.