All You Need To Know Going Into Trade On June 26

Asian stocks were mixed at the open Wednesday after Federal Reserve Chairman Jerome Powell warned the downside risks to the U.S. economy have increased and doubts emerged on progress toward a China trade deal.

Japanese shares retreated, while equities in South Korea and Australia opened flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.17 percent to 11,772 as of 6:50 a.m.

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BQ Live

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

U.S Market Update

• The U.S. markets fell the most in three weeks after federal Reserve Chairman Powell warned of potential risks impacting the U.S. economy.
• The 10-year Treasuries dropped below 2 percent, a level that until last week it hadn’t breached in three years.

Asian Cues

• Japan’s Topix index fell 0.5 percent.
• South Korea’s Kospi opened flat.
• Australia’s S&P/ASX 200 Index lost 0.1 percent.
• Futures on the S&P 500 Index were flat as of 9 a.m. in Tokyo. The underlying gauge fell 1 percent Tuesday.

Commodity Cues

• Brent crude traded 1 percent up to $65.79 per barrel.
• West Texas Intermediate crude rose 1.9 percent to $58.90 a barrel.
• Gold fell 0.4 percent to $1,418.18 an ounce.

London Metal Exchange

• Copper higher, up 1.38 percent.
• Nickel ended higher for the second day, up 1.32 percent.
• Zinc rose for the second session in a row, 2.09 percent higher.
• Tin ended 0.13 percent lower.
• Aluminium ended higher for the second day, up 1.17 percent.
• Lead closed 1.39 percent higher.

Indian ADRs

Stocks To Watch

• Reliance Power: ICRA downgraded the long-term and short-term ratings of Sasan Power (100 percent subsidiary of the company) to ICRA ‘BB+’ and ICRA ‘A4’ from ICRA ‘BBB’ and ICRA ‘A2’ respectively. Outlook changed to negative from stable. ICRA downgraded rating due to deterioration in financial risk profile of Reliance Power Group and the uncertainty regarding regulatory approval of tariff matters relating to change in law during construction and forex variation. The company disagrees with the revised ratings.
• Confidence Petroleum: Allotted 10,96,153 convertible warrants to M/s Gaspoint Petroleum (Promoter group), carrying an option to subscribe a share at a premium of Rs.51 per share for every warrant held within 18 months from the date of allotment.
• GVK Power: GVK Deoli Kota Expressway Private Limited, a step-down subsidiary of GVK issued notice of termination to NHAI on account of material breach and defaults on the part of NHAI.
• Transpek: Company to gradually start operations in Gujarat factory and production shall be ramped up to capacity in coming 7-10 days as the closure letter received from Gujarat Pollution Control Board has been revoked.
• NTPC: Wins 40 MW of Solar capacities in UPNEDA’S 500 MW Tender. Wins bid at Rs.3.02/KWH levelized tariff. The projects shall be set up by NTPC under EPC mode and shall add to the installed capacity of NTPC.
• Godrej Properties: Company plans to raise $300 million via QIP at a price range of Rs 912-928. The committee to consider and approve the issue price on June 28.
• Punjab & Sind Bank: Basel-III compliant Tier-II Bonds aggregating up to Rs 500 crore (Base Issue Size of Rs.200 crore with a Green Shoe Option of Rs 300 crore) was opened for bidding on June 25. The issue was subscribed and bids for Rs 237.30 crore with coupon of 9.50 percent were accepted.
• DHFL: The Company has made proportionate payment of 40 percent i.e Rs.150 crore towards maturity of the commercial papers of aggregate value of Rs 375 crore and the balance of Rs 225 crore will be paid once the surplus cash flow position improves over the next couple of days. The default has occurred on the gross principal of Rs 225 crore.
• Healthcare Global Enterprises Ltd: Company to raise Rs 20 crore by issuing 7,10,526 equity shares on preferential basis at Rs 285 each (71 percent premium to CMP).
• Bandhan Bank: Shareholder’s meeting for considering and approving amalgamation of GRUH Finance Limited with Bandhan Bank to be held on July 30.
• IFCI: Seeks to sell non-core assets and investments.
• Adani Power: Consortium of lenders, led by Axis Bank has approved the resolution plan to acquire controlling stake and restructure debt of GMR Chhattisgarh Energy Ltd. Adani Power shall hold 100 percent equity stake of which 52.38 percent stake is to be acquired from lenders and 47.62 percent is from GMR Group.
• Reliance Capital: Brickwork Ratings downgraded long-term debt programme and market linked debenture’s rating to BBB from A. Short-term debt programme has been downgraded to A3 from A2+.
• TV Today Network: HDFC MF increased stake to 7.14 percent from 5 percent after acquiring an additional 2.14 percent from open market on June 24.
• Asian Paints: LIC sold 2 percent stake in Asian Paints, reducing its stake to 3 percent in total.
• Emami: Diwakar Viniyog (promoter group) sold 2 percent stake in company on June 24 via open market, current holding stands at 10.9 percent. Suntrack Commerce (promoter group) sold 2 percent stake in company on June 24 via open market, holding stands at 10.8 percent.

Offerings

• SBI Life Insurance offer-for-sale opens for retail investors; sale to non-retail investors got 3.81 times demand Tuesday.
• L&T Technology's offer-for-sale opens for retail investors; sale to non-retail investors got 5.41 times demand Tuesday.
• IndiaMart InterMesh IPO: Fully subscribed on the second day of sale; got 1.3 times demand and the offer closes today.

Pledged Share Details

• Bombay Burmah promoters pledged 2.2 lakh equity shares.
• Himachal Futuristic promoters pledged 3.38 crore equity shares.
• Future Retail promoters pledged 2,35,620 equity shares.
• Zuari Agro Chemicals pledged 5 lakh equity shares.
• Wockhardt promoters pledged 3 lakh equity shares.
• Reliance Infrastructure released pledge on 1,80,995 equity shares.
• Future Lifestyle promoters released pledge on 3.5 lakh equity shares

Bulk Deals

ICICI Lombard GIC Limited

• Societe Generale buys 29.69 lakh shares (0.7 percent) at Rs 1,100 each.
• Red Bloom Investment Ltd sold 1.43 crore shares (3.2 percent) at Rs 1,100.19 each.

Aptech Limited

• Washington University sold 5.30 lakh shares (1.3 percent) at Rs 137.5 each.

Cox & Kings Limited

• Ifci Ltd. sold 10.80 lakh shares (0.6 percent) at Rs 50.56 each.

PC Jeweller Ltd

• Carlina Ltd sold 41.20 lakh shares (1 percent) at Rs 48.69 each.
• Idria Limited sold 40.8 lakh shares (1 percent) at Rs 48.68 each.

Reliance Power Limited

• Yes Bank Ltd sold 5.29 crore shares (1.9 percent) at Rs 4.14 each.

Supershakti Metaliks Ltd

• Aviator Emerging Market Fund buys 1.59 lakh shares (2.8 percent) at Rs 407 each.
• Asia Investment Corporation Mauritius Limited sold 1.60 lakh shares (2.8 percent) at Rs 407 each.

F&O Cues

Futures

• Nifty June futures closed at 11,810, premium of 13.9 points versus 18 points.
• Nifty futures across series open interest up 0.6 percent, adds 1.3 lakh shares in open interest.
• Bank Nifty June futures closed at 30,878.6, premium of 31.6 points versus 29 points.
• Bank Nifty futures across series open interest up 6.6 percent, adds 1.4 lakh shares in open interest.
• Nifty Rollover 40 percent, Bank Nifty Rollover 37 percent.

Options

• Nifty PCR at 1.51 versus 1.30 (across all series).

Nifty Monthly Expiry June 27

• Max open interest on call side at 12,000 (34.8 lakh shares).
• Max open interest on put side at 11,700 (40.2 lakh shares).
• Open interest addition seen at 11,700P (+11.6 lakh shares), 11,750P (+7 lakh shares).
• Open interest shedding seen at 11,800C (-9.7 lakh shares), 11,900C (-6.3 lakh shares).

Stocks In Ban

In Ban:

• Adani Power
• IDBI Bank
• Jet Airways
• Reliance Capital

Out Of Ban:

• Reliance Infra

Brokerage Radar

JPMorgan on Axis Bank

• Maintained 'Neutral'; hiked target price to Rs 850 from Rs 720.
• Franchise has levers to deliver on RoE guidance; execution remains keys.
• Credit cost normalisation likely to be gradual.
• Margin improvement can be difficult.

Macquarie on Axis Bank

• Upgraded to 'Outperform' from 'Neutral'; hiked target price to Rs 925 from Rs 760.
• Bank focusing on de-risking balance sheet and improving relationship with corporates.
• Like this new Axis Bank and will keenly watch for RoA improvement.
• Hiked target price to factor in capital raise and higher valuation multiple on lower credit costs.

IIFL on Balkrishna Industries:

• Maintained 'Add'; cut target price to Rs 860 from Rs 900.
• Near-term demand outlook muted.
• RoE has come off; capex phase may keep it subdued.
• Cut EPS estimates by 4 percent to factor in lower growth and higher rubber prices.

Edelweiss on BHEL

• Downgraded to 'Reduce' from 'Buy'; cut target price to Rs 60 from Rs 85.
• Unlikely to generate revenue growth beyond 6-8 percent over next five years.
• Balance sheet and cash flow unlikely to revive with SEBs accounting for 50 percent of receivables.
• New opportunities unlikely to be a game changer.

Goldman Sachs on Jubilant FoodWorks

• Maintained 'Sell' with target price of Rs 1,129.
• Increasing competition and input costs not factored in valuations.
• Dominos will find it challenging to deliver double digit same-store sales growth in FY20/21.
• See risk from aggressive expansion of Swiggy and Zomato in smaller Indian cities.

UBS on Quess Corp

• Maintain 'Buy'; cut target price to Rs 865 from Rs 1,080.
• Management strategy misfired, but course-correction is being ignored.
• Believe concerns are priced in as Quess is trading at 50 percent discount to 3-year average.
• Management temporarily halted inorganic growth, is focusing on improving working capital and on reducing losses at Monster.

CLSA on Sun Pharma

• Maintained 'Buy' with target price of Rs 520.
• Sun has lost 50 basis points market share in India over the past two years.
• Lost share can be largely attributed to slow growth in anti-infectives.
• Strong double-digit growth in top 100 brands, but tail brands are a drag.
• Though India growth has slowed, we believe profitability has improved.