All You Need To Know Going Into Trade On March 22

Asian stocks nudged higher after U.S. equities reached a five-month high amid optimism about the end of monetary tightening in the world’s largest economy.

Shares in South Korea and Australia rose, while Japan opened flat. The S&P 500 Index staged a broad-based advance Thursday that saw tech shares climbing alongside the real estate and consumer sectors, though financials continued falling.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 11,600 as of 7:15 a.m.

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BQ Live

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

U.S. Market Check

• U.S. equities reached a five-month high as investors reacted to a dovish lurch by policy makers in the world’s largest economy.
• The yield on 10-year Treasuries held at 2.54 percent.

Asian Cues

• Japan’s Topix index rose less than 0.1 percent.
• South Korea’s Kospi climbed 0.34 percent.
• Hang Seng futures earlier gained 0.1 percent.
• Australia’s S&P/ASX 200 Index climbed 0.5 percent.
• Futures of S&P 500 were little changed.

Commodity Cues

• Brent crude traded a little changed at $67.86 per barrel.
• West Texas Intermediate crude fell 0.1 percent to $59.93 a barrel.
• Gold dipped 0.1 percent to $1,308.59 an ounce.

London Metal Exchange

• Aluminium ended 1.9 percent lower.
• Nickel halted a four-day rally, ended 1.68 percent lower.
• Lead resumed declines after a one-day breather, ended 0.17 percent lower.
• Tin ended flat.
• Copper ended 0.56 percent lower.
• Zinc ended 0.98 percent lower.

Indian ADRs

Stocks To Watch

• Mindtree board will meet again on March 26. The company said no decision was taken on proposed share buyback on March 20.
• Power Finance Corporation: CCEA has given final approval for sale of REC’s 52.6 stake, or 104 crore shares, to PFC at Rs 139.50 per share aggregating to Rs 14,500 crore. On Dec. 6, CCEA had given in-principle approval for the deal.
• Adani Transmission approves buyback of NCDs worth Rs 1,000 crore.
• Fortis Healthcare: SEBI has ordered both Fortis Healthcare and Fortis Hospitals to continue pursuing measures to recall the outstanding Rs 403 crore amount along with due interest from Singh Brothers and related entities.
• SpiceJet is considering taking control of 40 Jet Airways aircraft after being tapped in by the Indian government: Bloomberg News
• Sun TV Network: Chief executive and managing director K. Vijay Kumar has resigned with effect from March 31. He will continue to be the executive director from April 1 onwards. The company stated in its press release that R. Mahesh Kumar will be the new MD for a period of five years.
• IDFC First Bank sells its entire stake of 8.73 percent in Asset Reconstruction Company (India) Ltd.
• Dr Reddy’s Laboratories gets U.S. FDA’s approval for its ANDA Pregabalin: Bloomberg News
• GMR Infrastructure’s JV Delhi International Airport awards commercial development rights at Delhi’s Aerocity to a consortium led by Bharti Group’s arm. The infra company has awarded non-transfer assets to the extent of 9 lakh square meters and ‘Bharti Realty’ will pay annual lease rent of Rs 363.5 crore per annum till 2036 and other one-time payments worth Rs 1,837 crore.
• Bosch India executes a JV agreement with Prettl India with total investment of Rs 20 crore. Sixty percent stake will be held by Prettl India while the remaining will be held by Bosch’s listed Indian arm. This JV has been done to carry out business of manufacturing and supply of automobile components.
• European Union extends Tata Steel-Thyssenkrup review by 8 working days to May 13: Bloomberg News
• S&P affirms GMR Hyderabad International Airport with BB+ Rating: Bloomberg News
• Tata Steel says no production impact from blast at Ijumuiden: Bloomberg News. Besides, the company acquired non-convertible preference shares of Tata Steel BSL worth Rs 10,700 crore.
• Vedanta’s Zambia unit halts work at shaft after death of worker: Bloomberg News
• Jet Airways clarifies on the news of Etihad selling it stake to SBI saying that it is contemplating various options on the debt-equity mix and proportion of equity infusion.
• GE&TD India says that to maximise the level of costs the company has decided right size the scale of operations in its Uttar Pradesh plant. The activity would involve rationalising the workforce to match the current order backlog, the company also stated in its press release that this move will not disrupt the commercial operation of any unit of the company.
• HUDCO says its Medium-Term Note Program for issuances of unsecured bonds/ notes amounting to Rs 5,000 crore in overseas market has been established in Singapore Exchange and India International Exchange. Credit rating for this program is aligned by the company’s long-term issuer ratings of Baa2 and BBB- by Moody's Investor Services and Fitch Ratings, respectively.
• CG Power and Industrial Solutions arm installs electricals work and voltage equipment for Northlands Powers offshore wind farm substation.
• Infosys signs 3-year technology partnership with Roland Garros, Besides, the company consider March quarter results and final dividend on April 12.
• Wipro arm launches crowdsourced software for testing solutions.

Offerings

• Reliance Nippon Life AMC-managed CPSE ETF fourth FFO to close March 22.
• India’s MSTC IPO gets 146 percent demand after offer extended by three days.

Aviation Data

• Domestic air passenger traffic grew 5.6 percent to 113.49 lakh – growth slowest in last 59 months.
• IndiGo’s passenger traffic grew 15 percent to 49.31 lakh.
• Jet Group’s passenger traffic fell 28 percent to 12.92 lakh.
• SpiceJet’s passenger traffic grew 17 percent to 15.58 lakh.

Telecom Data

• Telecom industry lost 38.9 lakh active subscribers in January 2019.
• Reliance Jio added 63.2 lakh active subscribers.
• Bharti Airtel and Vodafone Idea lost 45.6 lakh and 62.1 lakh active subscribers.

Bulk Deals

• Nandan Denim: Polus Global Fund sold 12.65 lakh shares or 2.63 percent equity at Rs 55.03 each.
• Jubilant Life Science: Jubilant Employees Welfare Trust sold 34.74 lakh shares or 2.18 percent equity at Rs 784.17 each.
• Carborundum Universal: Sundaram Mutual Fund acquired 13.04 lakh shares or 0.69 percent equity at Rs 357.55 each.

Who’s Meeting Whom

• PSP Projects to meet Securities Investment Management on March 22
• DCM Shriram to meet Equirius Capital, Green Lantern Capital and other investors on March 22
• Siemens to meet SBI Funds Management, Aditya Birla AMC from March 22-29
• Mahanagar Gas to meet Lazard Asset Management USA and HSBC Securities on April 3
• Shriram City Union Finance to meet Investec Capital Services on March 22

Insider Trading

• Dabur India promoter Ratna Commercial Enterprises acquired 41,000 shares from March 15-18
• JSW Steel promoter group JSW Holdings acquired 2 lakh shares on March 15
• UPL promoter Shilpa Sagar sold 10,000 shares from March 18-19

Money Market Update

• The Indian rupee closed at 68.83/$ on Wednesday from 68.96/$ on Tuesday.

F&O Cues

• Nifty March futures closed trading at 11,553, premium of 31 points.
• Max open interest for March 28 series at 11,500 Call (open interest at 26.9 lakh shares).
• Max open interest for March 28 series at 11,000 Put (open interest at 42.5 lakh shares).

Stocks In F&O Ban

• In ban: Adani Enterprises, Adani Power, IDBI, Jet Airways, Reliance Power
• New in ban: Adani Power
• Out of ban: BEML, Just Dial, Reliance Capital

Brokerage Radar

On Vodafone Idea

Citi

• Maintained ‘Neutral’ with a price target of Rs 39.
• Attractive rights issue pricing to ensure successful capital raise.
• Steep discount to drive healthy minority participation.
• Continue to have neutral rating as uncertainties still remain.

CLSA

• Maintained ‘Sell’ with a price target of Rs 27.
• Rights issue at steep discount resulting into huge dilution.
• Rights issue to help fund interest and capex spend in near term.
• Further capital infusion will likely be needed beyond 2020-21.

On Maruti Suzuki

Nomura

• Global collaboration between Toyota and Suzuki deeper and wider than expected.
• Key benefit is availability of hybrid technology in India without making much investment.
• Will become more relevant in India as emission norms tighten to BS-6 in 2020.
• Agreement should be win-win for both Maruti Suzuki and Toyota in India.

Jefferies

• Maintained ‘Buy’ with a price target of Rs 7,600.
• Suzuki & Toyota expanded partnership to new areas including supply of Ciaz & Ertiga to Toyota India.
• Access to Toyota's technology will be key to Maruti's long-term prospects, particularly in EVs.
• This means concessions by Maruti’s crown jewel in various forms which investors need to factor.

More Calls

CLSA on Kansai Nerolac

• Downgraded to ‘Sell’ from ‘Underperform’; cut price target to Rs 385 from Rs 450.
• Demand headwinds as auto sector reels under pressure.
• Weak macroeconomic environment raises concern over decorative demand.
• Concern over margin with rise in crude, though strong rupee and price hikes are positive.

CLSA on ICICI Prudential

• Maintained ‘Buy’; hiked price target to Rs 450 from Rs 430.
• Protection to be largest contributor to VNB by 2020-21.
• VNB volatility will be significantly lower than premium volatility.
• Lift VNB estimates for FY20-21 based on higher premiums and wider margins.

Jefferies on Finolex Cables

• Downgraded to ‘Hold’ from ‘Buy’; maintained price target at Rs 525.
• Positives seems priced in, post sharp rally.
• Cautious on tepid ramp-up in 'New Products.
• Expect revenue and net profit to grow at a compounded annual growth rate of 14 percent and 12 percent respectively over FY18-21.

HSBC on Indian Aviation

• Domestic traffic growth slowest as fares seem to have moved north, denting demand.
• Load factor down despite capacity (seats) growth.
• SpiceJet leasing Jet’s plane means capacity would remain which could accelerate competition and bring yield under pressure.

Jefferies on Consumer

• Channel checks suggest some moderation in demand.
• High base post GST rate cuts coupled with near term disruption in trade impacting demand.
• Continue to expect underlying demand to be stable but do not expect significant pick up.
• No further increase in competitive intensity and benign RMs are breathers.