All You Need To Know Going Into Trade On June 24

Stocks in Asia opened mixed, while U.S. futures edged higher, as investors monitor geopolitical risks and plans for the high-stakes meeting between Presidents Donald Trump and Xi Jinping.

Japanese and Australian shares slipped, and South Korea stocks were little changed. S&P 500 futures rose after the gauge Friday slipped from an all-time high. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded little changed at 11,755 as of 7:30 a.m.

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BQ Live

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

U.S Market Update

• U.S. stocks closed lower after touching record highs as an escalation of tensions with Iran cooled this week’s rally in risk assets sparked by dovish central banks.
• The yield on 10-year Treasuries increased one basis point to 2.06 percent.

Asian Cues

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

Commodity Cues

• Brent crude rose 0.06 percent to $64.51 per barrel.

• West Texas Intermediate rose 0.9 percent to $57.93 a barrel.
• Gold increased 0.6 percent to $1,407.29 an ounce.

London Metal Exchange

• Copper ended little changed.
• Nickel halted a three-day gains, ended 1.7 percent lower.
• Zinc ended lower for the third day, down 1.4 percent.
• Tin ended 0.78 percent lower.
• Aluminium ended lower for the second day, down 0.76 percent.
• Lead ended 0.16 percent lower.

Indian ADRs

Stocks To Watch

• Jain Irrigation’s long term issuer default rating downgraded to ‘B-’ from ‘B+’, and has been placed on rating watch negative. The downgrade reflects the deterioration in the company’s leverage and liquidity following a weaker than expected operating performance, stretched working capital position and management's aggressive focus on growth in the financial year ending March 2019.
• The NCLT via its June 20 order has directed to convene a meeting of the equity shareholders of Bandhan Bank to approve the Scheme of Amalgamation on Tuesday, July 30. NCLT has also dispensed with requirement of the meeting of the unsecured creditors of the bank and has directed it to issue notices to the relevant unsecured creditors in terms of the order.
• Mangalam Cement board of members considered and accepted the recommendations of the Audit Committee for the Scheme of Amalgamation of Mangalam Timber Products Limited with Mangalam Cement Limited.
• CARE Ratings CFO resigned and will be relieved from the close of business hours of July 18.
• NCLT approved the composite scheme of Arrangement between Aarti Industries Limited, Arti Surfactants Limited ancl Nascent Chemical Irrdustries Limited and their respective shareholders.
• IL&FS Investment Managers clarified on a news item appearing on the source economictimes.indiatimes.com dated June 21“IL&FS Securities Services faces Rs 380 crore hit on allied dodgy deal” does not relate to their company.
• Sun TV appointed Mathipoorana Ramakrishnan as an additional director (woman independent director) with effect from June 21 for a period of five years.
• Max India: Radiant Life completed the purchase of 49.7 percent stake in Max Healthcare from Life Healthcare. Max India promoters received an advance of Rs 361 crore from KKR for a 4.99 percent stake in merged entity.
• Bank of Baroda to conduct a board meeting to consider 11 approve opening balancesheet of the amalgamated bank as at April 2019, i.e. post amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda.
• Star Cement board decided not to proceed with the Scheme of Amalgamation with Megha Technical & Engineers Private Limited, a wholly owned subsidiary of the Company due to technical constraints.
• Piramal Entreprises clarified that no proposal with regards to fund raising had been placed for approval of the board or any of its committees. (In response to CNBC TV18’s story- "Piramal Enterprises in advance talks to raise funds from marquee investors".)
• Tata Steel’s long-term issuer default rating affirmed by Fitch at ‘BB’ with stable outlook. Tata Steel U.K. Holdings’ long-term IDR also has been affirmed at ‘B’ with stable outlook. The affirmation of TSL’s ratting follows EC rejection of JV proposal with Thyssenkrupp AG.
• Sun Pharma said that the U.S. FDA conducted a Pre-Approval Inspection of Sun Pharma’s Halol facility from June 3 to June 11 and issued a form 483  with four observations. The company will be submitting the response on the observations to the FDA within 15 business days and is committed to addressing these observations promptly.
• Glenmark: The US FDA issued a Complete Response Letter for Ryaltris and cites deficiencies in the Drug Master File for the drug. The company sees resolution in the the next six to nine months.
• Reliance Infrastructure: The long and short-term credit rating has been downgraded to ‘IND D’ due to ongoing delays in debt servicing and non-cooperation from the issuer.
• Dr. Reddy’s launched Phytonadione Injectable Emulsion USP in the U.S. market. The product had combined U.S. sales of approximately $46.6 million in the last 12-months ending April 2019.
• Audit of Vizag SEZ Plant 1 and Plant 2 at Duvvada, Visakhapatnam by the U.S. FDA was completed on June 21. Company has been issued Form 483 with two observations.
• BHEL: Won an order valued Rs 840 crore for emission control equipment from Nabinagar Power Generating Company Ltd. – subsidiary of NTPC Ltd. Order involves supply and installation of Flue Gas Desulphurization (FGD) system in Aurangabad district of Bihar.
• DHFL: Board to consider Q4FY19 results on June 29.
• CG Power: Signed an agreement to sell remaining portion of land situated at Kanjurmarg to M/s. Evie Real Estate Pvt. Ltd. for Rs 499 crore. The land currently houses the transformer manufacturing unit admeasuring approximately 13 acres. The said transformer manufacturing unit had a turnover of Rs 443.6 crore in FY18 which was around 11.3 percent of the total revenue. The sale is expected to complete on or before Dec. 27, 2019.

Offerings

IndiaMart InterMesh IPO opens today. Price band set at Rs 970–973 apiece. The offer closes on June 26. The company had raised Rs 210 crore from 15 anchor investors by allotting 21.95 lakh shares at Rs 973 each.

Bulk Deals

• HDIL: Promoter Sarang Wadhawan ups take in company from 8.63 percent to 12.48 percent due to warrant conversion.
• Sun Pharma: Raksha Valia pledged additional 3 lakh shares in favour of Citicorp for loan availed.

Sobha

• Promoter Sobha Menon sells 40 lakh shares at Rs 505.6 per share.
• Nomura, Frankin Templeton MF and Employees PF buyers in block.

Insider Trading

• Sobha Developers: Promoter Sobha Menon sold 4.22 percent stake.

Trading Tweaks

• UPL record date for the issue of bonus shares as July 3.
• Star Cement fixes July 5 as a record date for determining the members of the Company who are eligible to participate in the buy-back offer.

Who’s Meeting Whom

• Bajaj Finserv: Meeting with certain institutional investors at a non-deal roadshow organized by JM Financial from June 25-28.
• Varun Beverages: To meet institutional investors in London on June 24 and June 25.
• Bajaj Finance to meet investors in a road show arranged by JM Financial on June 24, 25, 26, 27 and 28.

F&O Cues

June Futures

• Nifty futures closed at 11,753, premium of 29 points versus 17.7 points.
• Nifty futures open interest down 3 percent, sheds 5.4 lakh shares in open interest.
• Bank Nifty futures closed at 30,638, premium of 10 points versus discount of 13 points.
• Bank Nifty futures open interest up 3 percent, adds 52,000 shares in open interest.

Options

• Nifty PCR at 1.34 versus 1.59 (across all series).

Nifty Monthly Expiry June 27

• Max open interest on call side at 12,000 (42.2 lakh shares)
• Max open interest on put side at 11,700 (34.2 lakh shares)
• Open interest addition seen at 12,000C (+14.3 lakh shares), 11,800C (+12 lakh shares)
• Open interest shedding seen at 12,200C (-4.4 lakh shares), 11,800P (-4.1 lakh shares)

Stocks In F&O Ban

In Ban:

• IDBI Bank
• Jet Airways
• Jain Irrigation
• Reliance Capital
• Reliance Infrastructure

New In Ban:

• Jet Airways

Money Market Update

The Indian rupee strengthened this week amid rising crude oil prices. The home currency appreciated 0.32 percent this week to close at 69.57 against the greenback. Besides, all its Asian peers strengthened this week against the U.S. dollar.

Today, the one-month Non-Deliverable Forward was trading at 69.98 versus 69.81 earlier on Business Standard reported that Viral Acharya quits as RBI Deputy Governor.

Brokerage Radar

Goldman Sachs on L&T

• Maintained ‘Buy’; hiked price target to Rs 1,700 from Rs 1,630.
• Confident that current order backlog and order book prospects will drive earnings growth.
• Incrementally positive due to increase in activity in non-core segments like realty.
• Believe L&T’s outlook appears bright as it moves out of decade-long capex cycle from 2018-19.

JPMorgan on TVS Motor

• Maintained ‘Neutral’; cut price target to Rs 400 from Rs 470.
• Cautious industry outlook, margin pressures and high valuations lend no comfort.
• TVS clearly points out on demand uncertainty and rise in competition.
• Stock offers low margin of safety.

CLSA on PSU Banks

• PSU banks are de-risking their books but CASA franchises remain weak.
• Limited buffer for the seasoning of NPLs mean pace of resolution is key.
• Underinvesting in deposit franchises; pensions to drive earnings volatility.
• SBI remains top pick among PSU Banks.

Credit Suisse on Lupin

• Upgraded to ‘Outperform’ from ‘Underperform; hiked price target to Rs 860 from Rs 800.
• Concerns on Solosec ramp-up and margin contraction have played out.
• Sharp increase in FCF expected and Lupin can be close to debt free by March 2023.
• Spiriva and Enbrel can be Rs 56/share but ignored by market.

Morgan Stanley on SBI Life

• Initiated ‘Overweight’ with a price target of Rs 850.
• Play on SBI's strong liability franchise.
• Stock has underperformed since IPO despite strong distribution franchise.
• Protection/persistency business should drive sustained margin expansion.
• Improving operating metrics to maintain valuations and VNB compounding to drive strong stock returns.