Financial traders monitor data on computer screens on the trading floor at Amsterdam Stock Exchange (AEX). (Photographer: Jasper Juinen/Bloomberg)

All You Need To Know Going Into Trade On Oct. 16

Asian stocks chalked modest gains at the open Tuesday as U.S. equity index futures advanced, with investors balancing the outlook for global growth and earnings against geopolitical flareups and technical weakness.

Share indexes rose in Japan, Australia and South Korea, and futures ticked higher in China and Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade 0.1 percent higher at 10,529 as of 7:15 a.m.

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

U.S. Market Check

  • U.S. equity benchmarks ended lower, led by the declines in technology shares.
  • The yield on 10-year Treasuries held at 3.16 percent.

Also read: Paul Allen, Billionaire Who Co-Founded Microsoft, Dies at 65

Europe Market Check

  • European stocks eked out gains following upbeat comments by U.K. officials late in the day on reaching a Brexit solution, after German Chancellor Angela Merkel earlier cautioned that time was running out.
All You Need To Know Going Into Trade On Oct. 16

Asian Cues

  • Japan’s Topix index rose 0.2 percent.
  • Australia’s S&P/ASX 200 Index added 0.5 percent.
  • South Korea’s Kospi index rose 0.4 percent.
  • Futures on the FTSE China A50 rose 0.2 percent.
  • Futures on Hong Kong’s Hang Seng Index climbed 0.5 percent.
  • The MSCI Asia Pacific Index added 0.2 percent.

Also read: SoftBank Dive Hits $22 Billion Amid Saudi Outcry, Tech Rout

Commodity Cues

  • West Texas Intermediate crude was little changed at $71.84 a barrel.
  • Brent crude traded 0.16 percent higher at $80.91 per barrel
  • Gold was stable at $1,227.79 an ounce after reaching the highest since late July.
  • LME copper declined 1 percent to $6,235.50 a metric tonne.

Shanghai Exchange:

  • Copper snapped a two-day rally, down 0.6 percent.
  • Zinc traded 1.4 percent lower.
  • Steel extended gains for the third day, up 0.1 percent.
  • Aluminium fell 0.1 percent.
  • Rubber extended gains for the third day, up 0.2 percent.

Also read: Saudi Arabia Breaks 45-Year Taboo With Veiled Threat to Use Oil as a Weapon

Here are the key events to watch out for this week:

  • APEC finance ministers meet in Port Moresby, Papua New Guinea.
  • China’s new yuan loans may have risen to 1.36 trillion yuan ($196 billion) in September from August’s 1.28 trillion yuan as officials sought to buoy economic growth. On Tuesday, consensus is for CPI to pick up to 2.5 percent growth and PPI to slow to 3.6 percent.
  • Third-quarter GDP for China comes Friday, with headline growth forecast to slow to 6.6 percent year on year from 6.7 percent, in addition to last month’s retail sales and factory output.
  • Minutes from the Federal Reserve’s latest policy meeting are due on Wednesday, with investors focused on projections for further interest rate rises.
  • Goldman Sachs, Morgan Stanley and Netflix are among companies reporting this week.
  • Euro-area governments, including Italy, must turn in fiscal budget proposals to the European Commission by midnight Monday.

Stocks To Watch

  • BP CEO Bob Dudley said that the company was in talk with Reliance Industries on starting an Indian downstream business, but it will not compete in the petrochemicals segment. (Bloomberg News)
  • TV Today Network’s arm received two separate notice demands from the Income tax department worth Rs 69.24 crore for the assessment years 2013-14 and 2014-15.
  • Globus Spirits announced the resumption of operations and commencement of commercial production of Bihar unit from Oct. 09. This unit has a production capacity of 80,000 bulk litre per day.
  • NTPC said it will discontinue operations at its Badarpur Thermal Power Station, New Delhi from Oct. 15. The station has a total installed capacity of 705 MW.
  • OCL India board approved the merger of Dalmia Cement East Ltd. and other associates into Odisha Cement Ltd. (ODCL). Post-merger, ODCL shall be renamed as OCL India Ltd. Oct. 26 has fixed as the date for implementation for this merger.
  • Cox & Kings board fixed the record date as Oct. 26 for determining shareholders who will receive shares in Cox & Kings Financial Service Ltd. Pursuant to the share entitlement ratio, one share of the resulting company shall be credited for every three shares held by the existing shareholders of the company.

Also read: Rakesh Jhunjhunwala Tweaks Positions In DHFL, SpiceJet And Lupin

Media Reports

  • KKR-backed Kwality set to be taken to NCLT over Rs 1200-crore default. Hindu Business Line
  • Reliance Industries set to unveil big stakes in Hathway, DEN (Times of India)

Nifty Earnings To Watch

  • Hero MotoCorp
  • Infosys

Also read: All You Need To Know Going Into The Second Quarter Earnings Season

Other Earnings To Watch

  • Crisil
  • Federal Bank
  • Jammu & Kashmir Bank
  • Mahindra CIE Automotive
  • Shakti Pumps

Earnings Reactions To Watch

Indiabulls Housing Finance (Q2, YoY)

  • Net profit up 21.2 percent at Rs 1,044.2 crore.
  • Provisions at Rs 40 crore versus Rs 65 crore (QoQ)
  • Gross NPA at 0.77 percent versus 0.78 percent (QoQ)
  • Net NPA at 0.58 percent versus 0.59 percent (QoQ)

Also read: Q2 Results: Indiabulls Housing Finance’s Profit Rises 21.2%; Meets Estimates

South Indian Bank (Q2, YoY)

  • Net Interest Income up 0.7 percent at Rs 506.5 crore.
  • Net profit at Rs 70.1 crore versus Rs 4.3 crore.
  • Provisions at Rs 204.7 crore versus Rs 231.5 crore. (QoQ)
  • GNPA at 4.61 percent versus 4.54 percent. (QoQ)
  • NNPA at 3.16 percent versus 3.27 percent. (QoQ)

Delta Corp (Q2, YoY)

  • Revenue up 38.6 percent at Rs 201.4 crore.
  • Net profit up 11.1 percent at Rs 48.1 crore.
  • Ebitda up 16.2 percent at Rs 76.2 crore.
  • Margin at 37.8 percent versus 45.1 percent.
  • Other Expenditure at Rs 63.2 crore versus Rs 37 crore.

Zee Media Corporation (Q2, YoY)

  • Revenue up 35.5 percent at Rs 168.7 crore.
  • Net profit at Rs 17.3 crore versus Rs 1.8 crore.
  • Ebitda up 53.2 percent at Rs 40.9 crore.
  • Margin at 24.2 percent versus 21.4 percent.

PITI Engineering (Q2, YoY)

  • Revenue up 106.8 percent at Rs 172.7 crore.
  • Net profit up 139.4 percent at Rs 7.9 crore.
  • Ebitda up 109.8 percent at Rs 25.8 crore.
  • Margin at 14.9 percent versus 14.7 percent.

Reliance Industrial Infrastructure (Q2, YoY)

  • Revenue up 7 percent at Rs 21.3 crore.
  • Net profit down 22.2 percent at Rs 2.1 crore.
  • Ebitda down 21.6 percent at Rs 2.9 crore.
  • Margin at 13.6 percent versus 18.6 percent.

Who’s Meeting Whom

  • Eicher Motors to meet Capital Group on Oct. 19.

Insider Trades

  • JSW Steel promoter group acquired 3.16 lakh shares from Oct. 10-11.
  • Cox & Kings promoter acquired 56,400 shares on Oct. 11.
  • Advanced Enzyme Technologies promoter group Atharva Green Ecotech LLP sold 55 lakh shares on Oct.12.

(As reported on Oct. 15)

Trading Tweaks

  • Ashapura Intimate Fashion placed under ASM Framework
  • Goa Carbon price band revised to 10 percent.
  • State Trading Corporation of India price band revised to 10 percent.
  • Mangalam Organics price band revised to 5 percent.

Money Market Update

  • The Indian rupee on Monday closed at 73.82 per dollar. It closed at 74.57 per dollar in trade on Friday.

Also read: Banning Rupees Didn’t Work. This Might

F&O Cues

  • Nifty October futures closed trading at 10,517,  premium of five points.
  • Nifty October open interest down 2.8 percent; Nifty Bank Oct OI up 1.2 percent.
  • Max open interest for October series at 11,000 strike value call option (open interest at 48.5 lakh shares)
  • Max open interest for October series at 10,000 Strike value put option (open interest at 34.8 lakh shares)

F&O Ban

Stocks In Ban

  • IDBI Bank
  • Adani Power

Put-Call Ratio

  • Nifty PCR at 1.20 versus 1.21.
  • Nifty Bank PCR at 1.21 versus 1.14.
All You Need To Know Going Into Trade On Oct. 16

Brokerage Radar

HSBC on Motherson Sumi

  • Maintained ‘Buy’; cut price target to Rs 350 from Rs 400, implying a potential upside of 40 percent from the last regular trade.
  • Cut earnings estimate on slower global and domestic market growth.
  • Investors ignoring positives from potential acquisition, rupee depreciation and new emission norms.
  • Stock price correction creates attractive entry point.

Jefferies on Indian Energy Exchange

  • Maintained ‘Buy’ with a price target of Rs 2,050, implying a potential upside of 25 percent from the last regular trade.
  • September quarter saw a double-digit volume growth of 18 percent.
  • CERC order sets the tone for stable pricing.
  • IEX to benefit from volume growth on stable pricing and cost base.

Brokerages On Indiabulls Housing Finance

JPMorgan

  • Maintained ‘Overweight’ with a price target of Rs 1,600, implying a potential upside of 69 percent from the last regular trade.
  • Another consistent quarterly earnings delivered.
  • ALM is conservative and the company should be able to ride out current stress in money markets.
  • Remains top pick in NBFC space.

Macquarie

  • Maintained ‘Outperform’ with a price target of Rs 1,400, implying a potential upside of 48 percent from the last regular trade.
  • September quarter was line. No concerns were seen on liquidity front.
  • Growth to slow down as mgmt. has cut loan growth guidance for the current financial year to 20 percent.
  • Think liquidity concerns are overdone; recent correction an opportunity to add.

CLSA

  • Maintained ‘Buy’; cut price target to Rs 1,500 from Rs 1,700, implying a potential upside of 58 percent from the last regular trade.
  • Steady, quality growth in September quarter.
  • Liquidity high but growth to moderate.
  • Cut earnings estimate by 3-5 percent to factor weaker topline.

Brokerages On IndusInd Bank

Macquarie

  • Maintained ‘Outperform’; cut price target to Rs 1,975 from Rs 2,100, implying a potential upside of 21 percent from the last regular trade.
  • Net interest margins are under pressure as liquidity tightens.
  • Management confident of no incremental provision other than Rs 275 crore made in the July-September quarter.
  • Cut price target to factor in 20 basis points rise in credit cost for IL&FS exposures and rising bond yields.

PhillipCapital

  • Maintained ‘Buy’ with a price target of Rs 2,170, implying a potential upside of 33 percent from the last regular trade.
  • Continue to report strong performance led by robust growth in advances.
  • Lag impact of re‐pricing loan has been exerting pressure on NIM.
  • Merger with Bharat financial to realise synergies in funding cost.

Deutsche Bank Research

  • Maintained ‘Buy’ with a price target of Rs 2,150, implying a potential upside of 32 percent from the last regular trade.
  • Strong growth; Earnings miss on higher provisions.
  • IL&FS exposure provided; asset quality steady otherwise.
  • NIMs decline eight basis points on a sequential basis as deposit cost rise faster.