All You Need To Know Going Into Trade On July 11

Asian stocks posted modest gains, following their U.S. counterparts, after comments by Federal Reserve Chairman Jerome Powell comments signalled a rate cut this month.

Shares climbed in South Korea and ticked higher in Japan and Australia. U.S. futures were little changed. . The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 11,533.50 as of 7:15 a.m.

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

BQ Live

U.S. Market Update

U.S. stocks rose toward all-time highs, gold rallied and the dollar fell as comments of Federal Reserve Chairman Powell hinted at rate cuts.

Asian Cues

• Futures on the S&P 500 Index rose 0.1 percent.
• Japan’s Topix index rose 0.2 percent.
• South Korea’s Kospi index gained 0.1 percent.
• Australia’s S&P/ASX 200 Index advanced 0.3 percent.

London Metal Exchange

• Copper snapped its three-day losing streak and rose over 2 percent.
• Lead ended higher for the third consecutive trading session, up 2.13 percent.
• Tin fell for the second day in a row, closed 0.16 percent lower.
• Zinc ended its five-day fall, closed 1.61 percent higher.
• Aluminium ended higher for the third consecutive trading session, up 1.59 percent.
• Nickel ended 2.28 percent higher.

Indian ADRs

Stocks To Watch

• InterGlobe Aviation said all related-party deals executed at arm’s length. Related-party deals were only 0.53 percent of the company’s 2018-19 revenue.
• Adani Green promoters Adani Trading created pledge on six crore shares.
• Aurobindo to launch Cinacalcet Hydrochloride Tablets in the U.S. Cinacalcet Hydrochloride tablets had an annual sale of approximately $1.5 billion for the twelve months ending May as per IQVIA.
• Cox & Kings clarified that it had not defaulted on interest payment on its NCD as the date for the payment of interest due is as of Aug. 5, and not June 30 as brought to its notice by the debenture trustee/subscriber.
• Religare Enterprises to sell Religare Finvest to TCG advisory. The consideration amount is not being disclosed in terms of the confidentiality obligations under the Term Sheet.
• Linc Pens’ first quarter sales grew 21 percent on an annual basis to Rs 100.66 crore. Company said its domestic turnover grew 29 percent backed by large corporate order while exports declined 11 percent. This is also the first time the company has crossed Rs 100 crore in sales in the first quarter.
• Ajmera realty to jointly develop commercial units at Ghatkopar.
• Saksoft Ltd. completed the acquisition of Dreamorbit.
• Piramal Enterprises approved issue of up to Rs 1,500 crore via NCDs.
• MSTC in pact with Heavy Engineering Corp for scrap disposal.
• TVS Motor Company launched a new 100cc motorcycle, TVS Sport in Sri Lanka.

• Premier Explosives secured orders worth Rs 15 crore from Bharat Dynamics for supply of solid propellants for Medium Range Surface to Air Missiles.
• V-Mart retail opened a new store in Uttar Pradesh.
• Brickwork Ratings downgraded the long-term debt instruments issued by IFCI Ltd. to ‘BWR BBB+’ with negative outlook citing decline in asset quality, stressed liquidity position, weakening earning profile among other reason
• Brickwork Ratings downgraded long term credit facilities of Mohota Industries to ‘BWR BBB’ factoring non-achievement of projections, year on year reduction in revenue and profits and decline in stock price
• Greaves cotton raised stake in unit Ampere Vehicles for Rs 22.5 crore.
• Bhageria industries said GIDC passed order in favor of company for transfer of 13.679 sq. mt land at Vapi.

Earnings Reaction To Watch:

Himachal Futuristic Communications (Q1, YoY)

• Revenue up 23 percent to Rs 1,343 crore.
• Net profit up 139 percent to Rs 110 crore.
• Ebitda up 111 percent to Rs 189 crore.
• Margin widened to 14.1 percent from 8.2 percent.

GTPL Hathway (Q1, YoY)

• Revenue up 50 percent to Rs 445.5 crore.
• Net profit up 123 percent to Rs 29 crore.
• Ebitda up 37 percent to Rs 107 crore.
• Margin narrowed to 24 percent from 26.3 percent.

Bulk Deals

Allsec Technologies.

• C Mackertich Private Ltd bought 5.38 lakh shares (3.5 percent) at Rs 303 each.
• SSD Securities Private Ltd sold 5.38 lakh shares (3.5 percent) at Rs 303 each.

Who’s Meeting Whom

• HPCL to meet several fund houses including Edelweiss Securities, Axis Capital, Motilal Oswal among others on July 15.

Money Market Update

The U.S. Federal Reserve seems to be preparing to cut interest rates for the first time in a decade. This is because it sees a cooling global economy and no sign of overheating in the jobs market at home.

Traders have boosted their Fed rate cut bets as debate rages on the size of July move.

Bond traders will also keep an eye on Brent crude oil, which is trading near 67 dollars a barrel. Yesterday, the yield on the benchmark 2029 government debt fell 5 basis points to 6.54 percent with yields declining 34 basis points this month so far.

The rupee is likely to gain in line with emerging market peers on dovish Federal Reserve comments.

Implied opening from forwards suggests rupee may start trading at 68.32 to the dollar.

The balance of forces on the Indian rupee continues to point up, according to Bloomberg Economics’ forecasting model.

The baseline projection is for the average monthly rupee exchange rate to strengthen to 66.3 per dollar by March 2020.

Note that RBI has set up an internal group to review the timings and the associated payment & settlement infrastructure after receiving requests for extension of timings for certain markets such as currency futures and over-the-counter foreign exchange market, the central bank says in a statement.

Yesterday, the rupee remained little changed to close at 68.57 to the dollar.

F&O Cues

July Futures

• Nifty futures closed at 11,492, discount of 6.6 points versus 3 points.
• Nifty futures open interest unchanged.

Bank Nifty

• Bank Nifty futures closed at 30,507.7, discount of 14 points versus premium of 70.6 points.
• Bank Nifty futures across series open interest down 2 percent, sheds 33,900 shares in open interest.

Options

• Nifty PCR at 0.84 versus 0.90 (across all series).

Nifty Weekly Expiry July 11

• Max open interest on call side at 11,600 (37.1 lakh shares).
• Max open interest on put side at 11,400 (12.6 lakh shares).
• Open interest addition seen in 11,600C (+18 lakh shares), 11,500C (+8 lakh shares).
• Open interest shedding seen in 12,000C (-6 lakh shares), 11,800C (-4.8 lakh shares).

Nifty Monthly Expiry July 25

• Max open interest on call side at 12,000 (32.2 lakh shares).
• Max open interest on put side at 11,300 (20.6 lakh shares).

Stocks In Ban

In Ban:

• DHFL
• IDBI Bank*
• Reliance Capital
• Reliance Infrastructure*

(New in ban*)

Brokerage Radar

CLSA on Bharti Infratel

• Retained ‘Sell’ with a price target of Rs 250.
• Bharti Infratel’s merger with Indus Towers is not a catalyst.
• Believe merger will have limited opex synergies.
• ROE could be higher assuming a goodwill write off.
• Elusive tenancy growth in the medium-term underlines negative view.

HSBC on Cadila Health

• Maintained ‘Buy’, cut price target to Rs 260 from Rs 410.
• Recent sell-off largely factors in negatives.
• U.S. generic sales should stabalise on continued momentum in new launches.
• Clarity to emerge on FDA status of Moraiya plant by early August 2019.
• India sales should see recovery from the second quarter.

Macquarie On Petronet LNG

• Maintained ‘Outperform’; raised price target to Rs 310 from Rs 270.
• Petronet’s volume in the first quarter was at an all-time high at 4.9 million tons.
• Raise EPS estimates to reflect higher-than forecast LNG import volume data.

IIFL on Godrej Consumer

• Maintained ‘Add’ with a price target at Rs 370.
• Near-term focus would revolve around reviving growth in India and Africa.
• Return ratios witnessed a dip due to lower deferred tax and pay-out liabilities.