Traders work on the trading floor. (Photographer: Diego Giudice/Bloomberg)

All You Need To Know Going Into Trade On Oct. 9

Asian stocks opened lower on Tuesday following a mixed U.S. session as investors took stock of a friction-filled visit by the American secretary of state to Beijing.

Japanese shares declined as traders came back after a long weekend, hurt by a strengthening in the yen. Australian stocks dropped, while Hong Kong futures were also lower.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 11,376 as of 7:05 a.m.

Short on time? Well, then listen to this podcast for a quick summary of the article!

BQ Live

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

U.S. Market Check

  • U.S. equities scrambled back from a steep early decline Monday as investors sought bargains in beaten-down utility stocks and consumer shares after a two-day swoon.
  • The yield on 10-year Treasuries held at 3.23 percent as the U.S. bond market reopened after a holiday Monday.
All You Need To Know Going Into Trade On Oct. 9

Also read: IMF Cuts Forecast for Global Growth as Trade War Takes Its Toll

Europe Market Check

  • European stocks sank to a six-month low as technology shares fell on concerns about renewed trade tensions and oil shares declined with Brent.
All You Need To Know Going Into Trade On Oct. 9

Also read: U.K. Plays Down Talk of Brexit Breakthrough

Asian Cues

  • Japan’s Topix index fell 1.3 percent.
  • Australia’s S&P/ASX 200 Index fell 0.9 percent.
  • Hang Seng Index futures lost 0.6 percent.
  • S&P 500 Index futures fell 0.1 percent. The S&P 500 closed little changed Monday, while the Nasdaq Composite dropped 0.7 percent.
  • The MSCI Asia Pacific Index fell 0.6 percent, on course for its seventh day of declines.

Also read: IL&FS Crisis Spurs Biggest Monthly Outflow From Liquid Funds In A Decade

Here are some key events coming up this week:

  • The U.S. Treasury has $230 billion worth of debt auctions this week.
  • The IMF presents its World Economic Outlook on Tuesday, ahead of annual IMF and World Bank meetings in Bali from Friday, where finance chiefs from around the world will gather.
  • A closely watched gauge of U.S. consumer prices probably remained elevated in September and rose 2.3 percent from a year earlier, according to forecasts ahead of Thursday’s release.
  • JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. kick off earnings season for U.S. banks on Friday.

Commodity Cues

  • West Texas Intermediate crude was little changed at $74.20 a barrel.
  • Brent crude traded a little changed at $83.90 a barrel.
  • Gold gained 0.2 percent to $1,190.09 an ounce.

Also read: How to Make a Killing in a Financial Crisis

Shanghai Exchange:

  • Aluminium snapped five-day decline, up 1.4 percent.
  • Steel snapped seven-day decline, up 1.8 percent.
  • Zinc extended gains for the third day, up 2.7 percent.
  • Copper snapped a three-day decline, up 0.5 percent.
  • Rubber snapped a three-day decline, up 2.7 percent.

Indian ADRs

All You Need To Know Going Into Trade On Oct. 9

Stocks To Watch

  • Tata Motors: JLR’s September sales were down 12.3 percent at 57,114 units, year-on-year basis. The company said that the monthly sales were impacted by the ongoing uncertainty in Chinese market as sales in China declined by 46.2 percent resulting from import duty changes and continued trade tensions which held back the consumer demand. Strong sales for new models were seen for Range Rover Velar and Jaguar I-Pace and E-Pace.
  • Usha Martin union raised concerns about irregular payment of salaries and has sought government intervention for sale of the company's wire rope manufacturing facility in Jharkhand to Tata Steel. The union also urged the government that the company should be acquired by Tata Steel so that the future of the employees remains secure. (PTI)
  • NBCC executed an MoU with Rajasthan government for redevelopment of old MREC campus in Jaipur for Rs 250 crore.
  • Britannia Industries announced it will give one free debenture worth Rs 30 in face value for one fully paid-up equity share. The company will utilize its accumulated profits of Rs 869 crore for the debenture issue. However, the record date has not been fixed yet.
  • NCL Industries’ September Quarter Updates: Cement dispatches were up by 31 percent at 4.88 lakh MT versus 3.72 lakh MT. Cement boards dispatches were up 7 percent at 16,700 MT versus 15,700 MT. RMC Production and Sales were up 50 percent at 45,800 cubic metre versus 30.6 cubic metre.
  • Coal India and NLC India signed an MoU for formation of joint venture for solar power generation of 3,000 MW and thermal projects of 2,000 MW capacity.
  • Sadbhav Infra Project arm won an arbitration award against NHAI for Rs 110.5 crore.

Also read: Tata Motors’ JLR Plans Two-Week Shutdown Of U.K. Plant

IPO Watch

  • Advent-Backed Ask Investment Managers gets SEBI approval for IPO.

Bulk Deals

  • Infibeam Avenues: Nomura Singapore sold 88 lakh shares or 1.33 percent at Rs 60.09 each.

Who’s Meeting Whom

  • Finolex Industries to meet TATA MF on Oct. 9.
  • SRF Industries to meet investors from Oct. 10-12.

Insider Trades

  • JSW Steel promoter group acquired 14 lakh shares between Oct. 4 and 5.
  • Mukand promoter acquired 1.16 lakh shares from Oct. 4 and 5.
  • Apollo Tyres promoter group Classic Auto Tubes acquired 3 lakh shares between Oct. 4 and 5.
  • UPL promoter Nerka Chemicals acquired 50,000 shares on Oct. 5.
  • Bodal Chemicals promoters acquired 6 lakh shares on Oct. 5.
  • Cox & Kings promoters acquired 1.5 lakh shares on Oct. 5.
  • PSP Projects promoter and director Prahaladbhai Patel acquired 21,400 shares from Oct. 3-5.

(As reported on Oct. 8)

Trading Tweaks

  • Edelweiss Financial Services circuit filter revised to 10 percent.
  • J.Kumar Infraprojects circuit filter revised to 5 percent.

Money Market Update

  • The Indian rupee on Monday closed at an all-time low of 74.07 against Friday’s closing of 73.77 per dollar.

Also read: Rupee’s Slide Is Stinging Indian Firms With Unhedged Foreign Debt

F&O Cues

  • Nifty October futures closed trading at 10,379 with a premium of 31 points.
  • Nifty October open interest up 0.6 percent; Nifty Bank October open interest down 4 percent.
  • Max open interest for October series at 10,500 strike value call option (open interest at 32.6 lakh shares)
  • Max open interest for October series at 10,000 strike value put option (open interest at 39.4 lakh shares)

Put-Call Ratio

  • Nifty PCR at 1.12 versus 1.07.
  • Nifty Bank PCR at 0.79 versus 0.71.
All You Need To Know Going Into Trade On Oct. 9

Brokerage Radar

Macquarie on Financials

  • September 2018 saw Rs 2.1 lakh crore of net outflows from liquid mutual funds.
  • Covered NBFCs are well placed to withstand potential restrictions on commercial papers.
  • Think troubles are temporary; Time to take action.
  • Recommend buying HDFC, Indiabulls Housing Finance, Ujjivan.

Morgan Stanley on Cement

  • Channel checks suggest cement prices in Sep-18 were flattish to marginally lower on a monthly basis.
  • Demand moderated in September, but was strong in the second quarter.
  • Pace of cost increase has moderated significantly.
  • Key to track: Price commentary in the next few months and input cost trend.

CLSA on AMFI Data

  • Large outflow seen from liquid scheme; Incremental flow to chase quality.
  • Expect flows to stabilise but risk aversion to stay.
  • Encouragingly, inflow into equity funds was at a four-month high.
  • NBFCs with higher credit ratings and strong ALM profiles are better placed.

JPMorgan on L&T

  • Maintained ‘Overweight’; cut price target to Rs 1,570 from Rs 1,600.
  • On track to meet 2018-19 inflow and revenue growth guidance.
  • Recommend buying ahead of second quarter results.
  • Expect 50 percent order inflow growth in the second quarter; Service businesses to drive P&L growth in the second quarter.

JPMorgan on Tech Mahindra

  • Upgraded to ‘Overweight’ from ‘Neutral’; raised price target to Rs 925 from Rs 835.
  • Tech Mahindra is nicely putting in place the building blocks to win in 5G.
  • Expect 5G spending to pick up 2019, with Tech Mahindra getting its share by 2020.
  • Reasonably good 5G deployment even with couple of large carriers should suffice for robust growth.

HSBC on NTPC

  • Maintained ‘Buy’ with a price target of Rs 210.
  • Loss on coal non-availability and loss of GCV of coal to reduce.
  • Blending renewable energy and national merit order dispatch to provide additional earnings.
  • Strong commissioning to drive 13 percent and 15 percent growth in regulated equity and earnings respectively over FY18-20.