A man looks up at an electronic ticker board that indicates stock figures at the Bombay Stock Exchange (BSE). (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On Jan. 17

Asian stocks pulled back from record highs, following declines in U.S. counterparts. The dollar declined against most major currencies while Treasuries steadied amid congressional talks to avert a U.S. government shutdown Friday.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,704.50 as of 6:45 a.m.

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DayBreak

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

Global Cues

  • U.S. stocks sank, retreating from all-time highs as commodities producers and industrial shares took a hit with oil and metals in decline.
  • Treasuries rose amid Congressional talks to avert a government shutdown Friday. The flattening of the yield curve is also back in focus after a brief movement in the opposite direction earlier this month.
  • Traders are questioning the pace of gains in equity markets at the start of 2018 as earnings season ramps up and bond investors bet monetary policy in the U.S. may be tightened more quickly.

Europe Check

  • European stocks ended the session little changed as a rally in real estate firms offset losses in basic-resources companies.
All You Need To Know Going Into Trade On Jan. 17

Asian Cues

  • Japan’s Topix index fell 0.6 percent.
  • Australia’s S&P/ASX 200 Index lost 0.4 percent.
  • Futures on Hong Kong’s Hang Seng Index dipped 0.2 percent.
  • Futures on the S&P 500 were flat. The VIX index spiked 15 percent.

Here are some of the key events scheduled for this week:

  • Earnings season ramps up: Taiwan Semiconductor Manufacturing Co., ASML Holdings NV, Bank of America Corp. and Goldman Sachs Group Inc. are among some notable releases.
  • Industrial production in the U.S. probably increased in December, a report may show Wednesday, completing a solid year for manufacturing.
  • U.S. housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release.
  • The Bank of Canada’s interest-rate decision comes Wednesday. Monetary policy announcements are also this week due in South Korea, South Africa and Turkey.
  • China releases fourth quarter GDP, December industrial production and retail sales Thursday.

Commodity Cues

  • Gold rose 0.2 percent to $1,340.98 an ounce.
  • West Texas Intermediate crude gained 0.2 percent to $63.86 a barrel.
  • Brent crude snaps six-day winning streak; ends lower at $69.15 per barrel, down 1.6 percent.
  • Sugar ended near seven-month low at 13.59 cents per pound; down 4.2 percent.

Shanghai Exchange

  • Steel trades higher for second day; up 0.6 percent.
  • Aluminium trades lower for second day; down 1.6 percent.
  • Zinc trades lower for second day; up 0.1 percent.
  • Copper trades lower for fourth day; down 1.3 percent.
  • Rubber trades lower for second day; down 0.5 percent.

Indian ADRs

All You Need To Know Going Into Trade On Jan. 17

Nifty Earnings To Watch

  • Bharti Infratel
  • Hindustan Unilever
  • Zee Entertainment

Other Earnings To Watch

  • Adani Power
  • Adani Transmission
  • DCB Bank
  • Jubilant Life Sciences
  • Jyothy Laboratories
  • Mindtree
  • Srei Infrastructure Finance
  • Sterlite Technologies
  • Tata Sponge Iron
  • Thirumalai Chemicals

Earnings Reaction To Watch

Jay Bharat Maruti Q3 (YoY)

  • Revenue up 13 percent at Rs 435 crore
  • Revenue up 13 percent at Rs 435 crore.
  • EBITDA up 11 percent at Rs 36.6 crore.
  • Margin at 8.4 percent from 8.5 percent.

Hatsun Agro Products Q3 (YoY)

  • Revenue up 7 percent at Rs 1,013 crore
  • Revenue up 7 percent at Rs 1,013 crore.
  • EBITDA down 6 percent at Rs 87 crore.
  • Margin at 8.6 percent from 9.8 percent.

Agro Tech Foods (YoY)

  • Revenue up 3 percent at Rs 214.55 crore.
  • Net profit up 15 percent at Rs 9 crore.
  • EBITDA up 4 percent at Rs 17.85 crore.
  • Margin at 8.3 percent from 8.25 percent.

Stocks To Watch

  • Sun Pharma got a license to sell the generic version of Linzess in U.S. from Feb. 1, 2031 after settling patent litigation.
  • Symphony’s wall mounted air cooler patented in South Africa; launched 2 new product ranges.
  • SAL Steel informs of closure of corporate insolvency process.
  • GAIL, Gazprom sign pact for re-negotiated long-term LNG sale.
  • Texmaco Rail considering setting up logistics hub and food park in West Bengal.
  • Pioneer Distilleries’ workers at its Nanded, Maharashtra manufacturing plant go on strike.

Bulk Deals

  • Punjab Alkalies & Chemicals: IDBI Banks sold 2.61 lakh shares or 1 percent equity at Rs 35.5 each.
  • Prozone Intu: Promoter Nigam Patel Family Trust sold 9 lakh shares or 0.6 percent equity at Rs 67.25 each.

Bharti Airtel

  • SRS Partners (Cayman) LLC bought 3.86 crore shares or 1 percent equity at Rs 499.1 each.
  • Merrill Lynch Markets Singapore PTE sold 3.86 crore shares or 1 percent equity at Rs 499.1 each.

Trading Tweaks

  • Circuit filter revised to 10 percent: Cerebra Integrated Technologies and SE Investments.
  • Circuit filter revised to 5 percent: Moser Baer, Jaypee Infratech and Indosolar.
  • Fiberweb India ex-date for 1:1 bonus.
  • SJVN ex-date for buyback eligibility.
  • Singer India ex-date for stock split from Rs 10 to Rs 2 each.
  • Aarti Drugs, Orbit Exports and James Warren Tea last trading day before determining buyback eligibility.

Who’s Meeting Whom?

  • S Chand to meet CIMB Securities on Jan. 17.
  • Astral Poly Technik to meet Malabar Investment Advisors on Jan. 17.
  • MEP infrastructure to meet investors from Jan. 17-19.
  • Deepak Fertilizers to meet several fund houses including Sundaram MF, Templeton MF and others on Jan. 19.

Insider Trades

  • Raymond promoter Vijaypat Singhania sold 21,500 shares.
  • Malu paper mills promoter Bharat Malu sold 810 shares.
  • Cox & Kings promoter Anthony Brunton Meyrick Good sold 17 lakh shares.
  • Nahar Industrial Enterprises Promoter Cotton County Retail bought 10,000 shares.

IPO Watch

  • Newgen Software Technologies continues on Day 2. The issue is subscribed 0.2 times.
  • Amber Enterprises India IPO opens at an issue price of Rs 855-859 per share.

Rupee

  • Rupee closed at 64.04/$ on Tuesday from 63.49/$ on Monday.

Top Gainers And Losers

All You Need To Know Going Into Trade On Jan. 17

Index Trends

All You Need To Know Going Into Trade On Jan. 17

F&O Cues

  • Nifty Jan. Futures trading at 10,709.5, premium of 9.5 points from 1.8 points.
  • Jan. Series: Nifty open interest up 1 percent; Bank Nifty open interest down 8 percent.
  • India VIX ended at 14.08, down 1.5 percent.
  • Max open interest for Jan. series at 11,000 Call (open interest at 52.2 lakh, up 9 percent).
  • Max open interest for Jan. series at 10,500 Put (open interest at 75 lakh, down 9 percent).

F&O Ban

  • In ban: Balrampur Chini, Capital First, Dish TV, Fortis, HCC, IFCI, India Cement, Jet Airways, Jindal Steel, Jain Irrigation, JP Associates, Kaveri Seed, Reliance Communications, Reliance Power and Wockhardt.
  • New in ban: Balrampur Chini, India Cements, HCC.
  • Out of ban: GMR Infra, HDIL, Reliance Capital.

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put-Call Ratio

  • Nifty PCR at 1.65 from 1.78.
  • Nifty Bank PCR at 1.24 from 1.31.

Stocks Seeing High Open Interest Change

All You Need To Know Going Into Trade On Jan. 17

Fund Flows

All You Need To Know Going Into Trade On Jan. 17

Brokerage Radar

KR Choksey on ABB India

  • Initiated ‘Buy’ with price target of Rs 1,823.
  • Higher government spending on power ABB offers strong growth prospects.
  • ABB’s Power Grids segment to support financial performance over medium to long term.
  • Triggers: National Solar Mission, EVs in India and Railway modernisation and electrification.
  • Expect order flow, revenue and net profit to grow at a compounded rate of 25 percent, 23 percent and 42.2 percent respectively over the years till 2019.
  • Robust execution to support strong top-line growth.
  • Increase in localization of manufacturing projects to lower operational cost.
  • Higher return ratios to help company demand higher valuations.

Daiwa Capital Markets on Crompton Greaves Consumer

  • Initiated ‘Outperform’ with price target of Rs 300.
  • India’s electrical industry to see double-digit growth over the next five years.
  • Crompton is well positioned to seize these opportunities.
  • Impressive franchise, strong management pedigree and growth outlook.
  • Focus on distribution, branding and segments to support sales growth.
  • Company has multiple levers for growth.
  • Positives: premiumisation, entry into new categories, brand building, and expanding distribution.
  • Expect revenue and earnings per share to grow at a compounded rate of 17 percent and 25 percent respectively over the financial years through March 2020.
  • Valuations not cheap, but strong sales and profits to support.
  • Bull case price target of Rs 340.

Motilal Oswal on Laurus Labs

  • Initiated ‘Buy’ with a price target of Rs 651.
  • In a sweet spot to get business in regulated market due to cost efficiency and consistent compliance.
  • Formulations business in take-off mode.
  • Positive on forward integration to formulation in regulated markets.
  • Expect U.S. sales to multiply as company targets 30 ANDA filings over three years.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 17 percent, 20 percent and 28 percent respectively over the financial years till March 2020.
  • Addition of formulations and healthy momentum in API business to lead growth.
  • Volume growth to drive ARV and Hep-C base business.
  • Interest outgo to reduce; Capex to continue to support growth.
  • Return ratios to improve on higher asset utilization.
  • Bull case price target of Rs 769: Expect revenue and net profit to grow at a compounded rate of 20 percent and 35 percent respectively over the financial years till March 2020.

CLSA on ICICI Lombard

  • Maintained ‘Buy’; raised price target to Rs 970 from Rs 820.
  • Healthy premium growth with sub-100 percent combined ratio; Rates a concern.
  • Competitive intensity & pricing environment improving; Regulations supportive.
  • New third-party motor law may be passed in upcoming budget session; Significant positive.
  • Expect earnings to grow at a compounded rate of 24 percent over the financial years till March 2020, led by healthy growth in premiums.

CLSA on GAIL

  • Maintained ‘Sell’ with a price target of Rs 405.
  • Supplies from Gazprom to expand Gail’s long-term LNG headache.
  • This is a negative surprise, as popular belief was that Gail would avoid this contract.
  • An oversupplied global LNG market will make it challenging to place these long-term volumes.
  • Stock is ignoring risks of large long-term U.S. LNG portfolio.