All You Need To Know Going Into Trade On July 16

Asian stocks were mixed in early Tuesday trading as investors looked to earnings and clues from policy makers for the next catalyst.

Japanese shares dipped as traders returned from a holiday, while indexes of South Korean and Australian equities edged up. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded little changed at 11,582.50 as of 7:10 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell

BQ Live

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

U.S. Market Update

• A technology rally drove U.S stocks to fresh records at the start of a busy week for corporate earnings, economic data and Federal Reserve speakers.
• The yield on 10-year Treasuries remained at 2.09 percent.

Asian Cues

• Futures on the S&P 500 were flat.
• Japan’s Topix index slid 0.2 percent.
• South Korea’s Kospi rose 0.2 percent.
• Australia’s S&P/ASX 200 Index added 0.1 percent.

Commodity Cues

• Brent crude fell 0.36 percent to $66.48 a barrel.
• West Texas Intermediate crude dipped 0.3 percent to $59.42 a barrel.
• Gold added 0.1 percent to $1,415.13 an ounce.

London Metal Exchange

• Copper resumed gains after a one-day blip, closed 0.8 percent higher.
• Lead ended higher for the sixth consecutive trading session, closed 0.25 percent higher.
• Tin ended lower for the second day, closed 1.65 percent lower.
• Zinc ended higher for the fourth consecutive trading session, closed 0.25 percent higher.
• Aluminium halted a two-day losing streak, closed 1.1 percent higher.
• Nickel ended higher for the fourth consecutive trading session, ended 1.45 percent higher.

Indian ADRs

Stocks To Watch

• Brigade Enterprises: Board approved issuing one bonus share for every two shares held in the company and issuing convertible warrants worth Rs 115 crore to the promoter group at Rs 269 per warrant.
• Ashok Leyland said that the release that company’s plant located in Pantnagar, Uttarakhand will remain closed from July 16 to July 24, due to weak demand and outlook for the industry.
• DHFL: No futures and options contracts will be available for trading in the equity segment from Sept. 27. All existing F&O contracts will expire on Sept. 26.
• Eros International Media’s foreign arm Eros International PLC's gross revenue had decreased 3.1 percent to $79 million and adjusted Ebitda was down 46 percent to $13.1 million for the fourth quarter of financial year 2019. Net loss was at $432.43 million for the aforementioned period. (Bloomberg News)
• Reliance Infra paid and redeemed 173 NCDs from invocation of pledged shares by debenture holders and now 1162 NCDs are outstanding under Series 20 of NCDs.
• Tata Motors JLR to get 500 million pounds loan guarantee from the U.K. export to support development of electric cars, Prime Minister Theresa May, said. (Bloomberg News)
• Page Industries Cartica Capital decreased stake in the company from 5.01 percent to 2.98 percent.
• Adani Power Mundra approved buyback of Rs 330 crore worth of debentures (Bloomberg News)
• HDFC Bank to consider special interim dividend on July 20.
• HDFC to issue NCDs worth Rs 5,000 crore.
• Aditya Birla Fashion acquired 51 percent stake in Finesse International Design for Rs 60 crore.
• State Bank of India: RBI levied a penalty of Rs 7 crore for violating income recognition rule.
• L&T Finance IL&FS signed a binding term sheet with secured lenders of three projects, as part of its resolution process. (Bloomberg News)
• Jubilant Lifesciences announced a price hike of 10 percent for Vitamin B3 with immediate effect for non-contract customers and existing contracts.
• Jet Airways’ first meeting of creditors to be held on July 16.
• Union Bank: RBI levied penalty of Rs 10 lakh for non-compliance of cyber rules.
• Greaves Cotton increased share in Ampere Vehicles to 81.23 percent for Rs 16 crore.

Earnings To Watch

• 5Paisa Capital
• Agro Tech Foods
• DCB Bank
• Federal Bank
• HDFC Asset Management Company
• Jay Bharat Maruti
• MCX
• Network18 Media & Investments
• TV18 Broadcast
• Vikas Multicorp

Earnings Reaction To Watch

Tata Metaliks (Q1, YoY)

• Revenue up 6.7 percent to Rs 499 crore.
• Net profit falls 35.5 percent to Rs 19.6 crore.
• Ebitda down 32 percent to Rs 44.9 crore.
• Margins narrows to 9 percent.

Automotive Stampings and Assemblies (Q1, YoY)

• Revenues up 7.9 percent to Rs 120.3 crore.
• Net loss widens to Rs 9.5 crore.
• Ebitda loss at Rs 2.4 crore.

Pledge Share Details

• Jindal Steel & Power promoter OPJ Trading created pledge of 22.8 lakh shares on July 8.
• Indo Rama Synthetics promoter Om Prakash Lohia released pledge of 3.8 crore shares on July 9.
• Sun Pharma promoter Shanghvi Finance created pledge of 4 lakh shares on July 9.
• Cox & Kings promoter Sneh Sadan Traders invoked pledge of 2.3 lakh shares from July 11-12.
• Eveready Industries promoter Williamson Financial Services invoked pledge of 13 lakh shares on July 8.
• Tourism Finance Corporation promoter Redkite promoter created pledge of 61.78 lakh shares from July 10-12.
• McLeod Russel promoter Williamson Financial Services invoked pledge of 20.4 lakh shares on July 8.
• Apollo Hospital Enterprises promoter PCR Investments created pledge of 60 lakh shares and revoked pledge of 38.45 lakh shares on July 10.

Who’s Meeting Whom

• Rallis India to meet Rare Shares and Stocks on July 19.
• Magma Fincorp to meet IDFC MF and Reliance MF from July 16-17.
• Mahindra Logistics to meet Kotak Securities on July 16.

Trading Tweaks

• GTPL Hathway, Supreme Infrastructure India to move into short term ASM Framework.
• GTPL Hathway price band revised to 10 percent.

Money Market Update

• The rupee on Monday strengthened to 68.55/$ versus Friday’s closing of 68.68/$.

F&O Cues

July Futures

• Nifty futures closed at 11,579, discount of 8.8 points.
• Nifty futures open interest down 2 percent, sheds 3.4 lakh shares in open interest.
• Bank Nifty futures closed at 30,456.5, premium of 10.6 points versus discount of 1 point.
• Bank Nifty futures open interest down 3 percent, sheds 58,000 shares in open interest.

Options

• Nifty PCR at 1.19 versus 1.14.

Nifty Weekly Expiry 18-July

• Max open interest on call side at 11,600 (19 lakh shares).
• Max open interest on put side at 11,500 (16.8 lakh shares).
• Open interest addition seen in 11,500P (+4.7 lakh shares), 11,600P (+3.9 lakh shares), 11650C (+3.7 lakh shares).

Nifty Monthly Expiry 25-July

• Max open interest on call side at 12,000 (32 lakh shares).
• Max open interest on put side at 11,300 (24.4 lakh shares).

Stocks in F&O Ban

• DHFL
• IDBI Bank
• Reliance Capital
• Reliance Infra

Brokerage Radar

HSBC on L&T Technology

• Initiated ‘Buy’ with a price target of Rs 2,100.
• Client-centric service strategy, strong deal wins and strong investment in new services bodes well.
• Gaining market share and better placed.
• Recent strong deal wins support industry leading growth; Expect 15% revenue CAGR over FY19-22.

Nomura on Adani Ports

• Maintained ‘Neutral’ with a price target of Rs 460.
• Scale, efficiency and development of port-centred ecosystem to continue to drive growth.
• Potential for expansion is high due to large unutilised waterfront.
• Connection to WDFC by 2019-20 end to further increase cost advantage.

Citi on Tata Steel

• Maintained ‘Sell’ with a price target of Rs 435.
• Expect potential negative surprises in June quarter.
• Little respite on pricing; expect avg realisations in June quarter to be flattish.
• Concerns on Europe; deleveraging may not be easy.

On Autos

IIFL

• Cut two-wheeler industry growth forecast from +4 percent to -4 percent for the current financial year.
• Expect double-digit decline in September quarter also, but build 5-6 percent growth in the second half.
• Pre-buy impact may be seen at retail level and not at wholesale level, given the high inventory.
• Outperformance by Bajaj and TVS to moderate.
• Bajaj Auto: Maintained ‘Buy’; cut price target to Rs 3,075 from Rs 3,200.
• Hero Moto: Maintained ‘Add’; cut price target to Rs 2,750 from Rs 2,800.
• TVS Motor: Maintained ‘Sell’; cut price target to Rs 335 from Rs 380.
• Eicher Motors: Maintained ‘Reduce’; hiked price target to Rs 17,500 from Rs 16,500.

Jefferies

• Auto down-cycle is in its second to fourth quarter across segments.
• Dealer checks suggest retail demand remains weak and inventories high.
• Even with BS-VI overhang on the next financial year, see risks are rising of muted pre-buying and BS-IV de-stocking in the current financial year
• Ashok Leyland: Maintained ‘Underperform’ with a price target of Rs 75
• Bajaj Auto: Maintained ‘Underperform’; cut price target to Rs 2,430 from Rs 2,620
• Eicher Motors: Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 19,300 from Rs 23,400
• Hero Moto: Maintained ‘Hold’; cut price target to Rs 2,610 from Rs 2,550
• M&M: Upgrade to ‘Buy’ from ‘Hold’; cut price target to Rs 720 from Rs 780
• Maruti Suzuki: Maintained ‘Buy’; cut price target to Rs 7,100 from Rs 8,000
• TVS Motor: Maintained ‘Hold’; cut price target to Rs 460 from Rs 540