All You Need To Know Going Into Trade On June 17

Asian stocks began Monday on the back foot ahead of a big week for central-bank policy.

Japanese shares saw modest losses alongside equities in South Korea and Australia. S&P 500 Index futures ticked higher after the U.S. shares dipped Friday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded little changed at 11,823.50 as of 7 a.m.

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Here’s A Quick Look At All That Could Influence Equities Today

U.S. Market Check

• U.S. tech shares fell Friday on concern a global trade war could sap profit.
• The dollar strengthened after data showing broad gains in retail sales suggested the economy is healthy enough to go without an interest-rate cut.

Asian Cues

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

Commodity Cues

• Gold slid 0.3 percent to $1,338.28 an ounce.
• West Texas Intermediate crude rose 0.3 percent to $52.67 a barrel.
• Brent crude rose 0.3 percent to $62.2 per barrel.

London Metal Exchange

• Copper ended 0.61 percent lower.
• Zinc ended lower for the second day, down 0.97 percent.
• Nickel halted a two-day fall, closed 0.24 percent higher.
• Aluminium ended lower for the second day, down 1.3 percent.
• Lead ended lower for the third day, down 1.3 percent.
• Tin ended a two-day gains, closed 0.75 percent lower.

Indian ADRs

Stocks To Watch

• Mahindra and Mahindra signed share agreement to acquire 11.25 percent stake in Switzerland based Gamaya SA for Rs 30 crore. The company said that this acquisition is expected to support the company’s business by developing technology solution’s the Group’s farm division.
• Laurus Labs received two observations from the inspection of Active Pharmaceutical Ingredients facilities in Andhra Pradesh by the U.S. Food and Drug Administration. Company stated in their press release that the observations are procedural in nature and it is a regular surveillance audit by the U.S. FDA and no data integrity issues was observed.
• Bharat Financial Inclusion completed direct assignment of Rs 1545.93 crore. Company says it has cumulatively completed direct assignment worth Rs 2653.33 crore in financial year 2020.
• Dewan Housing Finance paid interest and principal of non-convertible debemtures worth Rs 125.5 crore which was due on June 14.
• Indiabulls Housing Finance paid interest and principal of NCDs whose due date is on June 17.
• New Delhi Television Ltd.: Securities and Exchange Board of India barred its three key promoters Prannoy Roy, Radhika Roy and their holding firm form capital markets for two years and also restrained the two individuals from holding any board or top management role at the company in this period. This was done by the regulatory as violations were seen regarding interests of minority shareholders.
• S Chand & Company: SEBI fined company’s Chief Financial Officer Saurabh Mitta for violation of insider trading norms. Penalty of fine amounts to Rs 1.29 lakh.
• United Bank reduced Marginal Cost of Funds based Lending Rate across various tenors by 5 basis points. One Year MCLR at 8.75 percent and one month MCLR at 8.3 percent.
• Bharat Heavy Electricals Ltd. wins Rs 800 crore Engineering, Procurement and Construction orders for 200 MW solar power plants from NTPC Ltd. and Gujarat State Electricity Corporation Ltd.
• Cadila Healthcare’s Ahmedabad facility Alidac Pharma receives Establishment Inspection report from the U.S. Food and Drug Administration. Alidac Pharma is 100 percent subsidiary of Cadila Healthcare.

Bulk Deals

• Reliance Capital: Axis Trust Services sold 34.74 lakh shares or 1.37 percent equity at Rs 79.76 each.

Gruh Finance

• Housing Development Finance Corporation sold 3.6 crore shares or 4.91 percent equity at Rs 290.9 each
• Societe General acquired 41.9 lakh shares or 0.57 percent equity at Rs 290 each.

Pledge Share Details

• Adani Enterprises promoter group Gautam Adani revoked pledge of 62.06 lakh shares on June 12.
• JSW Energy promoter group Indusglobe Multiventures pledged 72.5 lakh shares on June 11.
• Apollo Tyres promoter group pledged 34.5 lakh shares on June 12.
• Emami promoter pledged 2 lakh shares and revoked pledge of 15.3 lakh shares from June 10-12.
• Himatsingka Seide promoters revoked pledge of 1 crore shares on June 14.
• Adani Transmission promoter group Adani Transmission revoked pledge of 2 lakh shares on June 13.
• Indiabulls Housing’s promoters released pledge on 42 lakh shares (0.98 percent) on June 14 on full repayment of loan.
• Indiabulls Real Estate’s promoters released pledge on 3 crore shares (6.63 percent) on June 14 on full repayment of loan.

Trading Tweaks

• Sintex Industries, Tanla Solutions to move into short term ASM Framework.

Earnings Reaction To Watch

Reliance Infra (Q4, YoY)

• Revenues up 30 percent at Rs 4,012 crore
• Ebitda up 235 percent at Rs 889 crore
• Ebitda margins at 22.2 percent versus 8.6 percent
• Net loss of Rs 3,301 crore, compared with a profit of Rs 134 crore
• Booked largest quarterly loss on account of impairment, write-offs worth Rs 8,481 crore

Alok Industries (Q4, YoY)

• Revenues down 9 percent at Rs 770 crore
• Ebitda gain of Rs 15 crore, versus loss of Rs 197 crore
• Profit of Rs 6,106 crore, versus loss of Rs 1,306 crore
• Profit on account of interest derecognised, hence reversed worth Rs 7,045 crore
• Interest derecognised on account of resolution plan approved by adjudicating authority

Who’s Meeting Whom

• Tata Motors to meet State Bank of India Mutual Fund on June 19.

Insider Trading

• Adani Green Energy promoter Gautam Adani sold 9.39 crore shares from June 12-13.
• V-Mart Retail promoter Hemant Agarwal sold 85,000 shares on June 11.
• Man Infra promoter and director Parag Shah acquired 48,000 shares from June 12-13.

Money Market Update

• Rupee weakens for second straight session, closes at $69.80 versus $69.51 on Thursday.

Futures And Options

June Futures

• Nifty futures closed at 11,838, premium of 14.7 points
• Nifty futures OI up 0.5 percent, adds 97,000 shares in OI
• Bank Nifty futures closed at 30,611, discount of 3 points versus premium of 49 points
• Bank Nifty futures OI up 4 percent, adds 72,000 shares in OI

Options

• Nifty PCR at 1.25 versus 1.46 (across all series)

Nifty Weekly Expiry 20 June

• Max OI on call side at 11,900 (21.8 lakh shares), 12,000 (21.7 lakh shares)
• Max OI on put side at 11,800 (10.7 lakh shares)
• OI addition seen at 11,900C (+11.2 lakh shares), 12,000C (+11 lakh shares)

Nifty Monthly Expiry 27 June

• Max OI on call side at 12,000 (24.4 lakh shares)
• Max OI on put side at 11,500 (26.6 lakh shares)

Stocks In F&O Ban

• In Ban: IDBI, PC Jeweller, Reliance Capital, Reliance Infra

Brokerage Radar

CLSA on Mid Caps

• Lease accounting change to have large impact on reported financials.
• AS-116 to impact companies with long leases (eg, retailing, multiplexes, hotels).
• Expected to balloon balance sheets, reduce net profit, impact RoCE and increase leverage.

Morgan Stanley on Oil & Gas

• Flattish petroleum product demand in May.
• Trends in auto fuel demand remain quite robust.
• ATF saw growth despite headwinds in the airline sector.
• Cheaper alternative fuels like gas and coal drove the industrial fuel sales weakness.

CIMB on Hexaware Technologies

• Maintained ‘Add’ with a price target of Rs 400.
• Acquisition of Mobiquity Inc will strengthen digital offerings.
• Believe acquisition is a good fit as it will boost Hexaware's customer experience services.
• See improving earings visibility and reasonable valuations.

Citi on Jindal Steel And Power

• Maintained ‘Buy’ with a price target of Rs 250.
• On track for 6.5mnt steel volume in India in 2019-20.
• On track to deliver cost-savings in 2019-20.
• On track to pay down further Rs 4000-5000 crore debt from cash flows in 2019-20.

Morgan Stanley on Biocon

• Maintained ‘Overweight’ with a price target of Rs 393.
• Biocon expects the first half to be modest, followed by strong second half.
• New launches will have a full-year impact in 2020-21.
• Expect meaningful margin expansion.

BofAML on HDFC Bank

• Maintained ‘Buy’ with a price target of Rs 2,750.
• See significant upside from semi-urban push.
• See opportunities in both sides of balance sheet.
• If HDFC Bank gains 10 percent market share, it would mean 30 percent deposit growth.

JPMorgan on Reliance Industries

• Maintained ‘Neutral’ with a price target of Rs 1,300.
• Refining and petchem weakness persists.
• See 15 percent downside to earnings estimate if GRMs and oil prices do not improve.
• E-commerce, stake sale and Jio tariff hike key events to watch.

CLSA on ITC

• Maintained ‘Buy’; cut price target to Rs 365 from Rs 400.
• See a decline in free cash flow and marginal improvement in return ratios in 2018-19.
• Concern about tobacco remains but FMCG ramps-up well.
• Lower cigarette business valuation multiple given lack of earnings growth visibility.