All You Need To Know Going Into Trade On June 7

Asian stocks traded mixed Friday as traders awaited a key U.S. jobs report and the outcome of further tariff negotiations between the Trump administration and Mexico.

Japanese shares were little changed, Korean shares slipped while Australian stocks advanced. Markets in Hong Kong and China are shut for holidays. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.15 percent to 11,866.50 as of 7:10 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. stocks climbed after a report the U.S. is considering delaying President Donald Trump’s plan to impose tariffs on Mexico. Treasuries pared gains and the peso rebounded from Thursday’s lows.

Asian Cues

• Japan’s Topix index rose 0.1 percent.
• South Korea’s Kospi fell 0.5 percent.
• Australia’s S&P/ASX 200 added 0.5 percent.
• Futures on the S&P 500 were little changed.

Commodity Cues

• West Texas Intermediate crude climbed 1.1 percent to $53.18 a barrel.
• Brent crude traded 0.89 percent to $62.22 per barrel.
• Gold dipped 0.1 percent to $1,334.13 an ounce.

London Metal Exchange

• Copper ended little changed.
• Zinc ended 1.67 percent higher.
• Aluminium ended 0.28 percent higher.
• Nickel ended lower for the fifth consecutive trading session, down 0.47 percent.
• Lead ended higher for the fifth consecutive trading session, up 1.34 percent.
• Tin ended higher for the second day, up 0.39 percent.

Indian ADRs

Stocks To Watch

• Wipro: Azim Premji announced his retirement and was appointed as the non-Executive Director till July 2024 and conferred with Founder Chairman of the company. He will retire from current position as Executive Chairman and MD with effect from July 30. Current CEO Abidali Neemuchwala has been appointed as the MD while Rishad Premji was elevated as the executive chairman till July 2024, with effect July 31.
• DHFL: Tata Asset Management Company Ltd. has decided to segregate its investments in Dewan Housing Finance Corporation Ltd. from rest of its portfolio as credit rating agencies downgraded the home financier’s debt papers to default. - Blackstone is planning to transfer funds on June 10 for its purchase of Wadhawan group unit Aadhar Housing Finance, people familiar with the matter said. Funds received by Wadhawan group will be used to repay debt, said one of the people, who asked not to be named as the details are private. (Bloomberg News)
• State Bank of India: said it had been very closely monitoring its exposures in the NBFC sector for the past 10 months and has been taking action as deemed appropriate. The overall quality of the NBFC asset portfolio in its books continues to be good.
• Linde India: Moloy Banerjee resigned from the post of MD and Indranil Bagchi from CFO’s post with effect from June 6, in view of recent and ensuing organizational changes within Linde Group.
• CreditAccess Grameen: completed securitization of Rs 110.35 crore on June 6.
• Tata Elxsi: selected as System Integrator for Google’s cloud and digital solutions for OTT Media platform.
• CCI approved the acquisition of electrical and automation business of Larsen & Toubro by Schneider Electric and MacRitchie Investments (Source: CCI Release)
• Cyient: announced strategic investment in Rail Cybersecurity Company. (Bloomberg News)
• Sagar Cements: Sales for May rose 13.3 percent to 275,330 MT versus 243,024 MT.
• GHCL: Chairman Sanjay Dalmia said that there was no truth in the speculative reports circulating in the media pertaining to divulgence of Swiss Bank account associated with him and investigations there to. He also stated that he is tax compliant in all matters and GHCL is being independently run by a dedicated and capable professional management team.
• NR Agarwal Industries: Company’s unit 4 to be shut down for annual maintenance and technical upgradation with effect from June 6, the plant is expected to resume production by June 25.
• Eros Media International: Eros Plc., promoter says that the Indian arm was late two loan interest payments for April and May 2019. These interest payments total less than $2 million and are currently in process of remittance.
• Indiabulls Real Estate: Promoter wishes to sell 14 percent stake to third party investors in order to focus of financial services in the long run. Promoter hold 38.72 percent stake in the company. Value of 14 percent stake at CMP is close to Rs 830 crore.
• Cyient: Cylus, a global leader in cybersecurity solutions for the rail industry. This investment is in line with the company’s focus on developing smarter and safer mobility solutions for the rail industry.
• Embassy Group Close to Buying Indiabulls Real Estate Stake, according to a TOI report. Embassy Group is close to buying largest stake in Indiabulls Real Estate, followed by a mandatory open offer to take a majority stake. Embassy to acquire 14-15 percent stake from Chairman Sameer Gehlaut and family for Rs 151 per share, a 15 percent premium to Indiabulls Real Estate’s closing price. Embassy and Blackstone will then buy 15-24 percent five to eight weeks later. Embassy will then make a mandatory offer for an additional 26 percent. Gehlaut family may retain a small minority stake.

Bulk Deals

• Indiabulls Real Estate: TIIA Cref Funds sold 26.9 lakh shares or 0.9 percent equity at Rs 125.39 each.
• Just Dial: Goldman Sachs sold 6.93 lakh shares or 1.07 percent equity at Rs 739.69 each.

Pledged Share Details

• Emami promoters created pledge of 12.3 lakh shares from May 31-June 1.
• TeamLease Services promoter Hansini Management Consultant created pledge of 84,000 shares on June 6.
• Adani Ports & SEZ revoked pledge of 3.16 lakh shares on June 4.
• Zuari Agro Chemicals promoter Zuari Management Services created pledge of 4.25 lakh shares on June 3.
• Gati promoter group invoked pledge of 24,000 shares on May 29.

Trading Tweaks

• GeeCee Ventures, FDC record date for share buyback.
• Tanla Solutions to move into short term ASM Framework.
• Timken India to move out of short term ASM Framework.

Who’s Meeting Whom

• Symphony to meet Helios Capital on June 13.
• Pidilite Industries to meet Matthews Asia Fund on June 12.
• Allcargo Logistics to meet Sundaram MF on June 7.
• Greaves Cotton to meet HKG, Blackrock Investments and Matthews Asia from June 7-10.
• Himachal Futuristic Communications to meet SageOne Investment Advisors on June 7.

Insider Trading

• NCL Industries promoter group NCL Holdings sold 2.56 lakh shares on June 4.
• TeamLease Services promoter NED Consultants sold 30k shares from June 3-4.
• JSW Steel promoter group Beaufield Holdings sold 14.36 lakh shares on May 31.
• Jindal Stainless promoter Abhuday Jindal acquired 1.17 lakh shares from June 3-4.

Money Market Update

The Indian rupee halted a three-day gain against the U.S. dollar Thursday. The home currency depreciated 0.03 percent to 69.27 against the greenback. The implied opening from forwards suggest the pair may start trading around 69.14 a dollar.

The sovereign bonds are set for their fourth weekly gains after the central bank eased its stance to accommodative while cutting repo rate by 25 basis points Thursday. Yield on the 10-year bond dropped 9 basis points to 6.93 percent in the last session. While a further rally from hereon looks difficult, the upside on yields is capped. The yield could stay in a range of 6.90-6.95 percent in the day.

F&O Cues

Futures- June Series

Nifty

• Nifty futures closed at 11,884, premium of 40 points versus 34 points

Bank Nifty

• Bank Nifty futures closed at 30,939, premium of 82 points versus 51 points

Options

Nifty PCR at 1.36 versus 1.53 (across all series)

Nifty Weekly Expiry 13 June

• Max open interest call side at 12,000 (15.5 lakh shares), 12,100 (13.5 lakh shares)
• Max open interest on put side at 11,900 (6.8 lakh shares)
• open interest addition seen at 12,000C (+13.7 lakh shares), 12,100 C (+9.6 lakh shares)

Nifty Monthly Expiry 27 June

• Max open interest on call side at 12,500 (26 lakh shares)
• Max open interest on put side at 11,500 (27 lakh shares)
• Max open interest addition seen at 12,500 (+6.6 lakh shares), 12,000 (+5 lakh shares)

Stocks in F&O Ban

• In Ban: DHFL, IDBI Bank, PC Jeweller
• New In Ban: DHFL, PC Jeweller

Brokerage Radar

UBS on Cadila Healthcare

• Upgraded to ‘Neutral’ from ‘Sell’; cut price target to Rs 275 from Rs 350.
• Pricing in potential headwinds in the U.S.; regulatory concerns again.
• Domestic growth likely to be in line with industry.
• See potential consensus earnings downgrades due to rising competition in key products.

HSBC on Indian Aviation

• Rise in airfares has pushed up consensus earnings forecasts too much.
• A number of industry risks seem to have been ignored.
• Indigo and SpiceJet are trading at peak and valuations and at premium to global peers.
• SpiceJet: Downgraded to ‘Reduce’ from ‘Hold’; hiked price target to Rs 115 from Rs 79.
• IndiGo: Maintained ‘Hold’; hiked price target to Rs 1,580 from Rs 1,100.

Citi on CESC

• Maintained ‘Buy’; hiked price target to Rs 895 from Rs 871.
• Dhariwal losses reduced significantly in FY19.
• Distribution business - Next focus area.
• Hike EPS estimates by 12-18 percent over FY20-21 to factor in the latest trends.

Citi on India Economics

• Growth revised downward; inflation broadly unchanged.
• RBI constitutes group to review liquidity framework.
• Expect another rate cut in August.
• Surprise shift in policy stance pushes yields lower; bonds likely to outperform.

Nomura on Apollo Tyres

• Maintained ‘Buy’ with a price target of Rs 247.
• Management expects revival by Aug-19 led by new government policies and good rains.
• In Europe, management expects high single digit growth in the near term.
• Expect healthy growth to continue; find valuations attractive.

CLSA on Consumer

• Not a good end to FY19; weak March quarter results drove earning cuts.
• Deceleration in growth rates across companies.
• QSR firms managed to see expansion despite a deceleration in SSG.
• Two factors to decide fate: their own earnings growth and growth trends in other sectors.

CLSA on Telecom

• 5G auction will fall short.
• Deferring 5G spectrum purchase is preferred.
• Exorbitant 5G spectrum cost a big drag for reasonable IRR; lower cost a must.
• 5G’s strong long-term promise, but limited near-term benefits.

CLSA on Cement

• Ministry concerned about price hikes.
• Govt intervention has been an issue several times in the past and has weighed on stocks.
• Although industry has not necessarily given into pressure by reducing cement prices.
• Currently have positive sector view but will watch out for developments.