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Stocks in Asia edged higher at the open on Tuesday as investors assessed early indications from America’s corporate earnings season and traders awaited a slew of data on China’s economy.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,535 as of 7:15 a.m.
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Here’s a quick look at all that could influence equities on Tuesday.
- U.S. stocks rose as geopolitical tensions faded and investors turned to what’s expected to be a blowout corporate earnings season.
- The yield on 10-year Treasuries were little changed at 2.83 percent.
- European stocks began the week with a loss as a stronger euro weighed on the export-oriented market amid easing geopolitical tensions.
- The euro gained 0.4 percent to $1.2375.
- The British pound rose 0.7 percent to $1.4333, hitting the strongest in about 22 months.
- Britain’s 10-year yield increased three basis points to 1.463 percent.
- Germany’s 10-year yield rose one basis point to 0.525 percent.
- Japan’s Topix index fluctuated as of 9:18 a.m. in Tokyo.
- Australia’s S&P/ASX 200 Index rose 0.5 percent.
- The Kospi index rose 0.3 percent.
- Futures on Hong Kong’s Hang Seng Index rose 0.6 percent.
- S&P 500 futures rose 0.2 percent.
Here are some key events coming up this week:
- Goldman Sachs Group Inc. and Morgan Stanley among companies reporting results
- John Williams, soon to be president of the New York Fed, speaks on economic outlook in Madrid on Tuesday.
- China GDP and Japanese inflation are the featured data points in Asia.
- Trump welcomes Japan Prime Minister Shinzo Abe to Mar-a-Lago on Tuesday. North Korea and trade will probably be discussed.
- Mining investors will get to take the pulse of the global industry this week, with Vale, Rio Tinto and BHP offering quarterly production reports.
- Gold rose 0.1 percent to $1,347.83 an ounce.
- West Texas Intermediate crude rose 0.5 percent to $66.56 a barrel after dipping 1.7 percent on Monday in the first retreat in more than a week.
- Brent traded higher at $71.8 per barrel; up 0.5 percent.
- Sugar snaps two-day winning streak ends lower at 12.2 cents per pound; down 0.3 percent.
- Steel traded lower for second day; down 1.2 percent.
- Aluminium traded higher for third day; up 2.4 percent (highest level since Jan. 30).
- Zinc traded higher for second day; up 0.3 percent.
- Copper snapped three-day losing streak; up 0.8 percent.
- Rubber traded lower for second day; down 1.7 percent.
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Earnings Reaction To Watch
Lloyds Metals (Q4, YoY)
- Revenue at Rs 109 crore versus Rs 73 crore.
- Net profit at Rs 9.9 crore versus Rs 4.7 crore.
- Ebitda at Rs 7 crore versus Rs 12 crore.
- Margin at 6.4 percent from 16.4 percent.
Jay Bharat Maruti (Q4, YoY)
- Revenue down 1 percent at Rs 480 crore.
- Net profit down 14 percent at Rs 18 crore.
- Ebitda up 14 percent at Rs 48 crore.
- Margin at 10 percent versus 8.7 percent.
Earnings To Watch
- Muthoot Capital Services
- Orchid Pharma
- Tata Sponge Iron
- 5paisa Capital
- Gujarat Hotels
- International Travel House
- Onelife Capital Advisors
- Schaeffler India
Stocks To Watch
- WS Industries proposed a one-time settlement with SBI and discussed settlement with Edelweiss Arc among others.
- Sobha will invest Rs 500 crore for residential project in GIFT City, Gujarat.
- Sterlite Technologies board to consider raising funds through issue of securities on April 25.
- Omkar Specialty Chemicals says Bank of Baroda classified its loan account as NPA.
- Bajaj Electricals bags orders worth Rs 3,578 crore for rural and urban electrification projects in Uttar Pradesh.
- Reliance Communications says NCLAT to hear tower sale appeal on tower sale on April 18.
- BlueStar signs up with Sands International and its partners for distribution of products in Saudi Arabia.
- Goa Carbon resumes operations at Orissa plant which was shut for maintenance.
- Adani Ports signs long term regasification pact with Indian Oil for Dhamra LNG Terminal.
- Fortis Board to meet on April 19 to consider various offers received.
- HDFC says AMC units FY18 total revenue up 18 percent (YoY) to Rs 1,867 crore, net profit up 31 percent to Rs 721 crore.
- Alok Industries says resolution professional seeks liquidation.
- Amtek Auto says submitted resolution plan with NCLT.
- Religare Enterprises received order from HC stating that the long stop date under SPA cannot be extended further.
- JM Financial unit acquires additional 8.78 lakh shares in Spandana.
- GSS Infotech: Nomura Singapore bought 1 lakh shares or 0.6 percent equity at Rs 61 each.
- Majesco: Promoter Sudhakar Ram sold 1.50 lakh shares or 0.5 percent equity at Rs 520 each.
- Goodluck India: Union KBC Equity Fund sold 2.35 lakh shares or 1 percent equity at Rs 86.74 each.
- Franklin India Smaller Companies Fund bought 3 lakh shares or 1.8 percent equity at Rs 2,150 each.
- Promoter HR Offshore Ventures PTE sold 1.70 lakh shares or 1 percent equity at Rs 2,150 each.
- Promoter NED Consultants LLP sold 85,483 shares or 0.5 percent equity at Rs 2,150 each.
Who’s Meeting Whom
- Hikal Ltd to meet analysts and investors on April 17-18.
- M&M to meet Motilal Oswal on April 18.
- BigBloc Construction to meet investors and analysts at its Umargaon plant on April 17.
- Den networks to meet investors on April 17.
- Simplex Infra to meet investors from April 17-25.
- Sandhar Tech to meet JM Financial, Buoyant capital and I-Wealth Mgmt from April 17-19.
- PPAP Automotive to meet Edelweiss on April 18.
- Wonderla to meet investors on April 17.
- Maharashtra Seamless Promoter Sudha Apparels acquired 1 lakh shares on April12.
- Plastiblends promoter Jyoti Kabra acquired 4,903 shares from April 10–11.
- Chaman Lal Setia promoters sold 26,300 shares from April 11–14.
- Divi’s Lab promoter Madhusudana Rao Divi sold 4,374 shares on April 13.
- Adani Power promoter Pan Asia Trade and Investment Pvt. Ltd. acquired 50 lakh shares on April 13.
- Lasa Supregenerics promoter Pravin Herlekar sold 24,000 shares from April 10–11.
- Rupee closed at 65.49/$ on Monday from 65.22/$ on Friday.
Top Gainers And Losers
- Nifty April futures closed trading at 10,543 with a premium of 14.6 points versus 9.8 points.
- April series: Nifty open interest up 1 percent, Bank Nifty open interest up 4 percent.
- India VIX ended at 14.2, up 0.8 percent.
- Max open interest for April series at 10,700 (open interest at 44 lakh, up 9 percent).
- Max open interest for April series at 10,300 (open interest at 55 lakh, up 6 percent).
- In ban: Balrampur Chini, IRB Infra, JP Associates, TV18 Broadcast, Reliance Communications.
- New in ban: Reliance Communications.
Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.
- Nifty PCR at 1.65 versus 1.63
- Nifty Bank PCR at 1.53 versus 1.45
Stocks Seeing High Open Interest Change
Angel Broking on Parag Milk Foods
- Initiated ‘Buy’ with a price target of Rs 333.
- Likely to be one of the key beneficiaries of shift towards organized sector.
- Product portfolio shifting towards high margin products.
- Margin expansion to be highest in industry by March 2020.
- Reducing leverage and improving return ratios.
- Expect revenue and net profit to compound at 13 percent and 27 percent respectively over the fiscal 2018-2020.
IIFL on Prataap Snacks
- Maintained ‘Buy’ with a price target of Rs 1,720.
- Attractively placed to tap the huge opportunity in organised snacks.
- Multiple revenue drivers in sight.
- Expect revenue and net profit to compound at 19 percent and 107 percent over the fiscal 2017-2020.
- Margin to improve led by raw material cost saving and favorable mix.
- Prataap is attractively valued to nearest listed competitor.
Credit Suisse on NTPC
- Maintained ‘Outperform’ with a price target of Rs 190.
- Coal shortage situation has not eased.
- Coal stocks remained well below last year level.
- NTPC plants continue to face availability issue on coal.
- Valuations attractive with multiple earnings growth catalysts.
Motilal Oswal on L&T Finance
- Maintained ‘Buy’ with a price target of Rs 240; implying a potential upside of 41 percent from the last regular trade.
- Post equity raise, NBFC well capitalised for growth.
- Don’t need to raise equity capital at least for next 3-4 years.
- Non-fund based businesses on a strong growth trajectory.
CLSA on Nestle
- Downgraded to ‘Outperform’ from ‘Buy’; hiked price target to Rs 9,750 from Rs 8,950.
- Working-capital improvement and strong free cash flow generation seen in 2017.
- Return ratios improved, but remain below the past peak.
- Aggression on launches has increased, but near-flat advertising spends disappoint.
- Downgraded on 13 percent rally seen in past one month.
CLSA on M&M
- Maintained ‘Buy’; raised price target to Rs 960 from Rs 910.
- Rural demand outlook improved with normal monsoon forecast.
- Big hike in government support prices for agri commodities on the anvil.
- Launch of new MPV to boost utility vehicle segment volumes.
- Good volume growth outlook.
- Valuations attractive despite better earnings outlook.
Brokerages on India’s Monsoon Forecast
- Normal monsoon forecast to aid rural recovery.
- Agri output likely to stay steady.
- Expect rural wage growth to pick up.
- Key beneficiaries: ITC, Emami, M&M, Godrej Consumer and Ramco.
Morgan Stanley says
- IMD projects normal monsoon.
- Don't expect any adverse impact on underlying food inflation trends.
- Government's procurement policy of crops will be key to watch.
- Normal monsoon on the cards.
- Premature to conclude on effects on growth and prices.
- Forecast to bode well for the rural sector.
- Expect extended pause from the RBI.
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