All You Need To Know Going Into Trade On July 2

Stocks were mixed in Asia Tuesday, with Treasuries little changed, as enthusiasm over the U.S.-China trade truce proved short-lived amid a disappointing set of economic data.

Hong Kong shares climbed as the city’s market reopened after a holiday to catch up with Monday’s move -- despite violent local protests overnight. Japanese and Korean shares were little changed, along with futures on S&P 500 Index. Australia’s equities saw modest gains.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.18 percent to 11,924 as of 7:20 a.m.

Heavy rains are pummelling Mumbai since Sunday night. According to officials, the financial capital has received 540 mm rain in two days, the highest over a two-day period in a decade. (Catch all the live updates on Mumbai rains here)

The state government has declared a public holiday today in Mumbai, Maharashtra Minister Ashish Shelar said in a tweet.

The Bombay Stock Exchange, however, will be functioning normally today, BSE CEO Ashish Chauhan said in a separate tweet.

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BQ Live

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

U.S. Market Update

• U.S. stocks rallied to all-time highs after a trade truce with China, though finished well off highs of the day as measures of manufacturing activity showed growth slowing in the world’s largest economy.
• The yield on 10-year Treasuries was flat at 2.02 percent.

Asian Cues

• S&P 500 futures were down 0.1 percent.
• Japan’s Topix was little changed.
• S&P/ASX 200 rose 0.3 percent.
• Kospi fell 0.7 percent.

Commodity Cues

• Brent crude traded 0.5 percent lower at $64.73 a barrel.
• West Texas Intermediate crude fell 0.6 percent to $58.70 a barrel after punching through $60 during Monday’s session.
• Gold was flat at $1,384.43 an ounce after tumbling Monday.

London Metal Exchange

• Copper halted a two-day fall, closed 0.64 percent lower.
• Nickel ended lower for the second day, down 2.68 percent.
• Tin ended 0.4 percent higher.
• Zinc ended 1.3 percent lower.
• Aluminium closed 0.33 percent lower.
• Lead ended lower for the second day, down 1.35 percent.

Indian ADRs

Stocks To Watch

• Sadbhav Infrastructure Projects board approved the sale of entire stake in 9 SPV comprising of seven toll road infra assets, two annuity infra assets to lndlnfravit Trust at deal valued at  Rs 6,611.2 crore. Company will see a de-consolidation of net debt of Rs 4,060 crore.
• Cox & Kings defaulted a payment of Rs 50 crore of Commercial Papers. The company repaid two investors Rs 15 crore out of Rs 65 crore, which was due on June 28 and stated that cash flow mis-match led to the default and remaining Rs 50 crore will be paid through internal accruals and asset monetisation. Cox & Kings had earlier defaulted in payment of commercial papers worth Rs 150 crore on June 27. CARE Ratings revised the company’s ratings to ‘CARE D’ from ‘CARE A+’ for CPs worth Rs 375 crore, while Brickwork Ratings Revised Ratings to ‘BWR D’ from ‘BWR A1+’ for CPs worth Rs 2,060 crore. The management stated in the press release that the defaults have been triggered due to temporary mismatch in liquidity and the measures are being taken to address the situation.
• JSW Energy said in a media statement that the proposed acquisition of thermal plant in Chhattisgarh from Jindal Steel and Power stands terminated as the conditions for the transactions had not been completed within the Long Stop Date. In May 2016, the company had agreed to acquire the 1,000 MW plant.
• Mangalore Refinery and Petrochemicals said that the water supply resumed in stages from June 6 onwards and refinery units have been restarted. On May 5, the refinery had announced that operations were shut down to constraints in water supply.
• Power Finance Corporation has raised $300 Million from through three-year syndicated loan from SBI and MUFG Bank (Hong Kong). By concluding this deal, the company has already mobilized $1.3 billion post acquisition of government’s stake in REC.
• ONGC has discovered over 230 million tonnes of in-place oil reserves in the last three years, Petroleum Minister Dharmendra Pradhan in a written reply to a question in the Lok Sabha. ONGC and Indian Oil Corporation sign MoU for Carbon Dioxide based enhanced oil recovery.
• Prakash Industries received a grant of surface right permission to open iron ore mine in Odisha. The said iron more mine has geological reserves of 9.9 million tons.
• IL&FS Transportation Networks defaulted in payments to investors aggregating to Rs 24.4 crore.
• ICRA placed MD & CEO Naresh Takkar on leave with immediate effect. Takkar ‘will be placed on leave until completion of examination of concerns raised in anonymous representation forwarded to the company by the market regulator. The rating agency has appointed Vipul Agarwal (current CFO) as interim Chief Operating Officer.
• Cochin Shipyard, Garden Reach Shipbuilders & Engineers: Government of India issued tenders for Rs 15,000 crore on warship building. (Bloomberg News)
• Apollo Tri Coat Tubes stated that they registered volumes of 10,286 MTPA during June quarter from its manufacturing facility in Karnataka.
• Nitin Spinners said that commercial production on spinning and weaving units in Rajasthan have commenced operations and erection of processing unit is in progress as per schedule.
• Rallis India received a letter on June 29 from Gujarat Pollution Control Board directing the company to suspend one of its operation in Dahej following safety incident at an effluent treatment plant, according to its media statement on the exchanges. The company also said that there was no material nor environmental impact to the plant, two workmen did suffer hot liquid burn injury. Besides, it said that it is taking appropriate steps to restore the said unit’s operations and it is holding sufficient stocks of finished goods.
• MOIL increased the price of Silico Manganese Grade by 5 percent.  Prices of Ferro Grade, Chemical Grade, Fines and basic price of Electrolytic Manganese Di-oxide which were fixed on June 1 remain unchanged.
• GAIL: Fitch affirmed rating at ‘BBB- ‘, with a stable outlook. (Press Release)
• Bharti Airtel: Scheme of Merger of consumer mobile business of Tata Teleservices and Tata Teleserives (Maharashtra) into the Bharti Group had become effective with effect from July 1. July 12 has been set as the record date for this scheme.
• HCL Technologies has completed the acquisition of select IBM products with effect from June 30.
• Sobha: L&T Mutual Fund increased its stake in the company to 5.08 percent.
• Gujarat Industries Power has issued Letter of Intent to Tata Power Solar Systems for EPC projects .
• Indo Amines: Board approved acquiring 60 percent stake in Ashok Surfactants.
• Indian Bank has revised MCLR across various tenors. 1 Month MCLR at 8.3 percent and 1 Year MCLR at 8.6 percent.
• Shree Rama Newsprint commissioned and commenced the commercial production from its packaged water bottling plant.
• Coal India: Coal production in June rose 0.5 percent to 45.08 million tonne. Coal sales in June were fell 1.6 percent to 48.86 MT

June Auto Sales (YoY)

• Tata Motors: Down 14 percent to 49,073 units. Commercial vehicles sales down 7 percent to 35,722 units. Passenger vehicles sales down 27 percent to 13,351 units.
• Hero Motocorp: Total sales down 12 percent at 6.16 lakh units.
• Eicher Motors: Total sales down 22 percent to 58,339 units.
• TVS Motor: Total sales down 5 percent at 2.97 lakh units. Exports up 6 percent to 69,900 units.
• SML Isuzu: Total sales down 22.4 percent to 1,214 units.

Catch all the live auto sales updates here.

Bulk Deals

• Reliance Infrastructure.: KBC Equity Fund sold 14.33 lakh shares or 0.55 percent equity at Rs 52.9 each.

Eros International Media

• Anand Rathi Global Finance sold 25.06 lakh shares or 2.62 percent equity at Rs 17.3 each.
• Reliance Financial sold 10 lakh shares or 1.05 percent equity at Rs 17.2 each.

Pledge Share Details

• Sun Pharma promoter Shanghvi Finance created pledge of 68.5 lakh shares on June 24.
• Coffee Day Enterprises promoter VG Siddhartha created pledge of 29.27 lakh shares on June 25.
• Emami promoters released pledge of 96.73 lakh shares on June 28.
• Surya Roshni promoters created pledge of 42 lakh shares and revoked pledge of 35 lakh shares from June 26-28.
• Adani Ports & SEZ promoter Gautam Adani created pledge of 4.4 lakh shares on June 24.
• Hubtown promoter Hemant Shah revoked pledge of three lakh shares on June 28.
• Adani Enterprises promoter Gautam Adani created pledge of 6.3 lakh shares on June 24.
• Adani Transmission promoters created pledge of 4.7 crore shares from June 24-27.

Trading Tweaks

• UPL ex-date for share bonus at 1:2.
• Sintex Plastics Technology to move into ASM Framework.

Stocks Moving Into Short-Term ASM Framework

• Jindal Worldwide
• Investment Trust Of India
• JBF Industries, Setco Automotive
• Arshiya
• SREI Infrastructure Finance
• Patel Engineering
• Pokarna
• HT Media
• Hubtown
• Essar Shipping
• S Chand And Company

Who’s Meeting Whom

• Torrent Power to meet HDFC Life Insurance on July 4.
• Thyrocare Technologies to meet Phillip Capital and Centrum Capital from July 3-5.
• Shriram Transport Finance to meet Motilal Oswal Financial Services on July 2.
• Sanghi Industries to meet Unifi Capital, Sundaram MF and Franklin Templeton MF on July 4.
• Mahindra Logistics to meet VEC Investments on July 3.

Insider Trading

• GMR Infra promoter GMR Enterprises acquired 35 lakh shares on June 28.
• Info Edge promoter and director Sanjeeb Bikhchandani sold 46,400 shares on June 28.
• HSIL promoter Paco Exports acquired 3 lakh shares from June 14-26.
• Jindal Stainless Steel promoter Ratan Jindal acquired 1.18 lakh shares from June 27-28.
• MEP Infra Developers promoter Anuya Mhaiskar acquired 3.03 lakh shares on June 28.
• Vascon Engineering promoter Siddharth Moorthy acquired 8 lakh shares on June 28.

Money Market Update

• The rupee strengthened for the sixth straight session on Monday to close at 68.95 versus Friday's closing of 69.02.

F&O Cues

July Futures

• Nifty futures closed at 11,903.6, premium of 38 points versus 52 points.
• Nifty futures open interest up 1 percent, adds 1.1 lakh shares in open interest.
• Bank Nifty futures closed at 31,496, premium of 124 points versus 162 points.
• Bank Nifty futures across series open interest up 1 percent, adds 18,000 shares in open interest.

Options

• Nifty PCR at 1.36 versus 1.28 (across all series)

Nifty Weekly Expiry (July 4)

• Max open interest on call side at 12,000 (26.6 lakh shares)
• Max open interest on put side at 11,800 (21.3 lakh shares)
• Open interest addition seen in 11,800P (+9 lakh shares), 11,750P (+6 lakh shares)
• Open interest shedding seen in 11,800C (-2.3 lakh shares), 11,850C (1.6 lakh shares)

Nifty Monthly Expiry (July 25)

• Max open interest on call side at 12,000 (14.5 lakh shares)
• Max open interest on put side at 11,500 (16.4 lakh shares)

Stocks In F&O Ban

• In Ban: DHFL

Brokerage Radar

CLSA on Sadbhav

• Maintained ‘Buy’ with a price target of Rs 320.
• Big deleveraging and a crystallised premium value for its asset business.
• Divesture key catalyst as it will release growth capital to fund new project.
• More legs for the stock; expect execution ramp-up ahead.

Macquarie on CESC

• Maintained ‘Outperform’ with a price target of Rs 881.
• Best placed to capitalise on distribution opportunity.
• Potential regulatory downside factored into numbers.
• Valuations reasonable; expect an RoE of 20 percent by the next financial year.

BofAML on Reliance Industries

• Maintained ‘Buy’ with a price target of Rs 1,550.
• Expect strong positioning to continue in telco domain.
• Mobile payments, online fashion and news have not worked yet for RIL.
• Expect RIL to continue to experiment with different apps.

BofAML on Telecom

• Tariff hike not for six months at least.
• Vodafone Idea and Bharti Airtel use Chinese vendors while Jio does not.
• Expect limited telco participation for 5G auction.

Nomura on Ceat

• Maintained ‘Reduce’; cut price target to Rs 817 from Rs 980.
• Expansion in competitive and capital extensive segment to impact RoCE.
• See rising margin headwinds from adverse product mix.
• Valuations expensive given deteriorating RoCE and flattish earnings.

HSBC on Havells India

• Maintained ‘Buy’; hiked price target to Rs 850 from Rs 775.
• Improved access and availability of electricity and strong government impetus on housing is promising.
• Increasing R&D investment and capability building to make Havells future ready.
• Retain buy on strong earnings outlook.

HSBC on Tata Communications

• Maintained ‘Hold’; cut price target to Rs 550 from Rs 590.
• Voice business to remain under pressure; traditional data business to remain steady.
• Revenue acceleration to come from growth and innovation services.
• Addressable market for Mobile Virtual Enabler is highest.