All You Need To Know Going Into Trade On July 9

Asian stocks saw a muted start to trading Tuesday after their U.S. counterparts slipped overnight.

Stocks in Japan and South Korea clawed back some of Monday’s losses while Australian shares drifted. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade little changed at 11,558 as of 7:20 a.m.

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BQ Live

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

U.S. Market Update

• U.S. equities fell as investors took a cautious approach to a week full of central bank activity.
• The yield on 10-year Treasuries fell one basis point to 2.04 percent.

Asian Cues

• Topix Index rose 0.4 percent.
• Kospi Index climbed 0.3 percent.
• S&P/ASX 200 was flat.
• S&P 500 futures fell 0.1 percent.

Commodity Cues

• Brent crude extended fall for the second consecutive trading session, down 0.39 percent to $63.86 per barrel.
• West Texas Intermediate crude dipped 0.4 percent to $57.43 a barrel Tuesday.
• Gold was little changed at $1,394 an ounce.

London Metal Exchange

• Copper ended lower for the second consecutive trading session, down 0.17 percent.
• Lead ended 0.8 percent higher.
• Tin ended higher 0.79 percent higher.
• Zinc ended lower for the fourth consecutive trading session, down 1.2 percent lower.
• Aluminium resumed gains after a one-day blip, down 0.33 percent.
• Nickel ended higher for the second consecutive trading session, up 1.92 percent.

Indian ADRs

Stocks To Watch

• Titan Q1 Update: The company stated that the quarter witnessed a tough macro-economic environment with consumption being hit. Jewellery segment’s revenue increased 13 percent as the company stated that sharp increase in gold prices dented consumer demand significantly in June, while sales on Akshaya Tritiya was robust.
• Hero MotoCorp: Raised prices of its two-wheeler segment by 1 percent with effect from July 8.
• Meghmani Organics: Arm completed installation of Chlormethane project with capacity of 40,000 MT per annum in the existing caustic chlorine complex in Gujarat. The company has also commenced the commercial production from this plant with effect from July.
• Larsen and Toubro: To merge its shipbuilding arm with self.
• HDFC: has planned to sell bonds worth Rs 5,000 crore on July 10.
• Goa Carbon: June production up 32 percent at 15,799.3 MT versus 1,1951 MT. Company’s turnover up 11 percent at Rs 138.91 crore versus Rs 124.72 crore.
• Century Textiles & Industry: NCLT approved demerger among the company, UltraTech Cement, and their respective shareholders and creditors.
• Prataap Snacks: Malabar India Fund increased its stake in the company by 0.59 percent to 5.57 percent.
• Reliance Industries has partnered with Turkey’s textile company Kıvanç Tekstil, to manufacture and market textile fabrics and the Turkish company will also be an exclusive distributor of Reliance Industries’ product Recron.
• Fortis Healthcare: Mauritius arm completed sale of its entire 29 percent stake in MSCL for MUR 393.6 million, or Rs 74.83 crore.
• Max Financial Services: ICICI Pru MF decreased stake by 0.11 percent in the company to 4.08 percent.
• Marico: stated in their annual report that for the financial year 2020 and beyond they have retained 8-10 percent volume growth in India and the company will also increase advertising expenses to almost 10 percent of sales on an annualized basis.
• HCL Technologies: stated that NLC Insurance companies have started using its digital solutions platform.
• Voltas: has partnered with Energy Efficiency Services to manufacture and sell five-star rated Inverter ACs.
• NHPC: stated in their press release that two units of Bara Suil Power Station has started electricity generation with effect from July 6-7.
• SH Kelkar: Share buyback period to start from July 15-26.

Nifty Earnings To Watch

• Tata Consultancy Services

Earnings Reaction To Watch

Delta Corp (Q1, YoY)

• Revenues down 0.4 percent to Rs 186.5 crore.
• Net profit up 2.7 percent to Rs 42.5 crore.
• Ebitda up 1.5 percent to Rs 67.7 crore.
• Margin widens to 36.3 percent from 35.6 percent.
• Gaming Operations segment revenue up 3 percent to Rs 181.4 crore.

Steel Strips Wheels (Q1, YoY)

• Revenues down 6 percent to Rs 470.6 crore.
• Net profit down 31.6 percent to Rs 14.7 crore.
• Ebitda down 12.7 percent to Rs 55.7 crore.

• Margin narrows to 11.8 percent from 12.7 percent.
• Results not comparable as company’s SSWL Mehsana’s plant financial impact visible in the first quarter this fiscal.

Pledge Share Details

• Sterlite Technologies promoter Twin Star Overseas released pledge of 20.94 crores on June 10.
• Emami promoters created pledge of 23 lakh shares and revoked 44.3 lakh shares from July 3-5.
• Sadbhav Engineering promoter Vikram Patel created pledge of 6.48 lakh shares on July 28.
• Himatsingka Seide promoter Bihar Mercantile Union created pledge of 79.26 lakh shares on June 14.
• Orient Cement promoter Central Industries released pledge of 46 lakh shares on June 17.
• Future Consumer promoter Future Capital Investment revoked pledge of 7.76 lakh shares on July 7.
• Jindal Steel & Power promoter group OPJ Trading revoked pledge of 52 lakh shares on July 5.
• Bajaj Consumer Care promoter Bajaj Resources revoked pledge of 1.4 crore shares on July 5.

Trading Tweaks

• GAIL ex-date share bonus at 1:1.
• Rushil Decor to move into short term ASM Framework.
• Monnet Ispat & Energy, Praxis Home Retail, Signet Industries to move out of short term ASM Framework.

• Religare Enterprises price band revised to 10 percent.
• GSS Infotech, Igarashi Motors price band revised to 5 percent.

Who’s Meeting Whom

• Mahindra Lifespace Developers to meet Nine Rivers Capital, Karma Invest and other investors on July 9.

Insider Trading

• Everest Organics promoters acquired 7,000 shares from June 26-28.

Money Market Update

The sovereign bond investors will keep an eye on sale of 76 billion rupees of bonds by states. Bond traders will also watch out for term-repo and reverse repo auctions today.

Yesterday, bonds rallied with benchmark yields declining 13 basis points to 6.56 percent, the lowest since 2017.

In the currency market, The Indian rupee is likely to open slightly weaker today in line with its Asian peers. The implied opening from forwards suggest the pair may start trading at 68.69 against the U.S. dollar.

The traders will keep an eye of foreign fund flows.

F&O Cues

July Futures

• Nifty futures closed at 11,566, premium at 7.7 points versus 10 points.
• Nifty futures open interest went up 1 percent , added 1 lakh shares in open interest.
• Bank Nifty futures closed at 30,689, premium of 85 points versus 28 points.
• Bank Nifty futures across series open interest down 1 percent, sheds 26,000 shares in open interest.

Options

• Nifty PCR at 0.88 versus 1.09 (across all series).

Nifty Weekly Expiry 11-July

• Max open interest on call side at 12,000 (37.3 lakh shares).
• Max open interest on put side at 11,500 (12.2 lakh shares).
• Open interest addition seen in 11,700C (+31 lakh shares), 11,800C (+15.3 lakh shares).
• Open interest shedding seen in 11700P (-8.2 lakh shares), 12,200C (-7.2 lakh shares).

Nifty Monthly Expiry 25-July

• Max open interest on call side at 12,000 (29 lakh shares).
• Max open interest on put side at 11,300 (15.6 lakh shares).

Stocks in F&O Ban

• DHFL
• Reliance Capital

Brokerage Radar

On Titan

Macquarie

• Maintained ‘Neutral’ with a price target of Rs 1,294.
• Moderation in jewellery business seen in in June quarter.
• Store additions can add meaningful growth to overall jewellery segment.
• Watches and eyewear growth led by brand activations.
• Company led initiatives driving other business growth.

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 1,300.
• Growth moderated in jewellery more sharply than expectations.
• Expect flat to low single digit revenue growth with decline in SSSG.
• Expect the stock to be weak in near term.

BofAML

• Maintained ‘Buy’ with a price target of Rs 1,360.
• Jewellery weak show; watches and eyewear healthy.
• Q1 likely to be temporary blip and strong growth to resume.
• Any correction in share price offer attractive investment opportunity.

HSBC

• Downgraded to ‘Hold’ from ‘Buy’; maintained price target at Rs 1,300.
• June quarter’s jewellery growth at 13 percent which puts its 20 percent 2019-20 growth guidance at risk
• September and December quarter now adverse and elevated gold prices could lead to uncertain demand outlook.
• Valuations are rich and growth has slowed down.

More Calls

BoaAML on Oberoi Realty

• Downgraded to ‘Neutral’ from ‘Buy’; maintained price target at Rs 627.
• New affordable housing definition to hurt long term growth.
• Change in definition to not impact current project.
• Rich valuations offer limited upside.

HSBC on Tech Mahindra

• Upgraded to ‘Buy’ from ‘Hold’; cut price target to Rs 800 from Rs 840.
• 5G related deals are uncertain in the near term, but telecom business should recover.
• Growth in enterprise business remains volatile.
• Margins to come off a bit, but will not have material impact on stock.

HSBC on Reliance Industries

• Maintained ‘Buy’; cut price target to Rs 1,475 from Rs 1,512.
• Near-term earnings concerns weight on RIL’s energy business.
• Subdued margins in refining and chemical business imply risk to 2019-20.
• Consumer businesses could offset some of these risks.
• Deleveraging set to remain the key theme for 2019-20.

Morgan Stanley on Mindtree

• Maintained ‘Underweight’ with a price target of Rs 820.
• Expecting soft Q1 for Mindtree anyway, due to push out in deal closures.
• Recent departures, it will be important to see how growth is likely to play out in the current financial year.
• Keep an eye on any potential uptick in attrition rates.

Citi on JSPL

• Maintained ‘Buy’ with a price target of Rs 250.
• Strong steel sales and production in June quarter despite weak seasonality and tight liquidity in market
• On track for 6.5 million tonne steel volume in India in 2019-20.
• On track to deliver cost-savings in 2019-20.
• On track to pay down further Rs 4,000-5,000 crore debt from cash flows in 2019-20.

CLSA on Tata Motors

• Maintained ‘Sell’ with a price target of Rs 150.
• Warranty expense and provision ratio at a nine-year high.
• Fixed assets vs sales significantly above peers despite big impairment in 2018-19.
• Second consecutive year of negative free cash flow turns JLR net debt.
• Commentary cautious citing multiple headwinds.