India Markets closed

All You Need To Know Going Into Trade On August 6

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

Asian stocks open modestly higher Monday as earnings seasons rolls on. The yuan held on to its gains after a surprise move by the central bank to make it more expensive to bet against the currency triggered a rally in China’s currency.

Equity benchmarks edged higher in Japan, Australia and South Korea, while futures signaled a higher open for Hong Kong ahead of results from regional heavyweights HSBC Holdings Plc and Softbank Group Corp.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.3 percent higher at 11,427.50 as of 7:15 am.

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. stocks closed higher Friday as positive earnings surprises lifted shares, with three-fourth of the S&P 500 companies that reported results on Friday morning beating analysts’ estimates.
  • The yield on 10-year Treasuries declined three basis points to 2.95 percent.

Also Read: Trump Says U.S. Now Has the Upper Hand on China in Tariff Battle

Europe Market Check

  • European equities inched higher following sharp losses in the week, aided by a rally in banking shares after Royal Bank of Scotland Group announced plans to resume payouts.

Also Read: U.K.’s Fox Says Brexit No-Deal Outcome Is More Likely Than Not

Asian Cues

  • The Topix index rose 0.1 percent.
  • Australia’s S&P/ASX 200 advanced 0.5 percent.
  • South Korea’s Kospi index added 0.3 percent.
  • Futures on Hong Kong’s Hang Seng Index rose 0.7 percent.
  • FTSE China A50 futures climbed 0.8 percent.
  • S&P 500 Index futures were little changed.

Also Read: Jamie Dimon Warns of 5% Treasury Yields

Commodity Cues

  • West Texas Intermediate crude was at $68.58 a barrel, up 0.1 percent.
  • Brent crude traded 0.1 percent higher at $73.26 a barrel.
  • Gold traded at $1,214.15 an ounce.
  • LME copper futures fell 0.7 percent to $6,163.50 a metric ton.

Shanghai Exchange

  • Steel traded higher for second day; up 0.5 percent.
  • Aluminium traded higher for second day; up 0.1 percent.
  • Zinc traded higher for two days in a row; up 0.8 percent.
  • Copper traded higher; up 0.6 percent.
  • Rubber snapped four-day losing streak; up 0.8 percent.

Also Read: World’s Priciest Precious Metal Set to Blossom as Shortage Looms

Stories You Might’ve Missed

  • Will quotas work at a time when jobs are shrinking, asks Nitin Gadkari.
  • Foreign investors poured in over Rs 2,300 crore in the Indian capital markets in July.
  • Virat Kohli tops the ICC test ranking for batsmen.
  • Senior executive of a Nirav Modi-owned firm gets bail.
  • The genesis of a perpetual crisis in the film industry.
  • WeWork wants to double locations as it completes one year in India.
  • Is it time for Facebook to consider hard limits to Zuckerberg’s power?
  • Many questions and few answers on the UIDAI helpline mystery.

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

  • Earnings season includes results from: HSBC, SoftBank, Japan Post Bank, Disney, 21st Century Fox, Deutsche Telekom, China Mobile, Glencore and Adidas.
  • Tuesday brings the latest Reserve Bank of Australia meeting that is likely to produce no change in either the record-low cash rate or the long-term guidance.
  • The Bank of Japan releases a summary of opinions Wednesday from its July 30-31 meeting, at which it tweaked elements of its stimulus policy to make it more sustainable.
  • Samsung Electronics unveils its next Galaxy Note smartphone.
  • Japan announces a preliminary reading of second-quarter gross domestic product. Economists expect a solid rebound from a first-quarter contraction.
  • U.S. consumer prices probably rose in July, consistent with a pickup in inflation that’s projected to keep the Federal Reserve on a path of gradual interest-rate increases, economists forecast before Friday’s release.

Nifty Earnings To Watch

  • Adani Ports and Special Economic Zone

Other Earnings To Watch

  • Adani Power
  • Arvind
  • Avanti Feeds
  • Britannia Industries
  • Caplin Point Laboratories
  • Firstsource Solutions
  • Graphite India
  • Max Financial Services
  • Parag Milk Foods
  • Ujjivan Financial Services

Earnings Reaction To Watch

Relaxo Footwear (Q1, YoY)

  • Revenue up 17.3 percent to Rs 566.5 crore.
  • Net profit up 23 percent to Rs 46 crore.
  • Ebitda up 17 percent to Rs 83 crore.
  • Margins at 14.6 percent versus 14.7 percent.

Suzlon Energy (Q1, YoY)

  • Revenue down 50.5 percent to Rs 1,277.5 crore.
  • Ebitda down 83.8 percent to Rs 77 crore.
  • Net Loss of Rs 572.8 crore versus Rs 49 crore profit.
  • Forex gain of Rs 253.6 crore versus Rs 42.4 crore.

Wockhardt (Q1, YoY)

  • Revenue up 13.1 percent to Rs 1,007.7 crore.
  • Ebitda at Rs 28.8 crore versus Ebitda loss of Rs 79.3 crore.
  • Margin at 2.8 percent versus -8.9 percent.
  • Net loss narrows to Rs 86.2 crore versus Rs 409.7 crore.

KEC International (Q1, YoY)

  • Revenue up 13.4 percent to Rs 2,104.7 crore.
  • Net profit up 37.8 percent to Rs 86.8 crore.
  • Ebitda up 22.6 percent to Rs 216 crore.
  • Margin at 10.3 percent versus 9.5 percent.

Sical Logistics (Q1, YoY)

  • Revenue up 32.1 percent to Rs 323.5 crore.
  • Net profit down 64 percent to Rs 4 crore.
  • Ebitda down 13 percent to Rs 38.4 crore.
  • Margin at 11.9 percent versus 18 percent.

Berger Paints (Q1, YoY)

  • Revenue up 18.9 percent to Rs 1,483 crore.
  • Net profit up 19.5 percent to Rs 135 crore.
  • Ebitda up 22.6 percent to Rs 227 crore.
  • Margin at 15.3 percent versus 14.8 percent.

Waterbase (Q1, YoY)

  • Revenue up 22.5 percent to Rs 154.3 crore.
  • Net profit up 23 percent to Rs 17.7 crore.
  • Ebitda up 3.6 percent to Rs 26 crore.
  • Margin at 16.8 percent versus 19.8 percent.

Steel Authority of India (Q1, YoY)

  • Revenue up 37.4 percent to Rs 15,907 crore.
  • Net profit of Rs 540.4 crore versus net loss of Rs 801.4 crore.
  • Ebitda at Rs 2,576.5 crore vs Ebitda loss at Rs 83.8 crore.

Indo Count Industries (Q1, YoY)

  • Revenue up 10.2 percent to Rs 440.3 crore.
  • Net profit down 10 percent to Rs 28.8 crore.
  • Ebitda up 44.4 percent to Rs 47.5 crore.
  • Margin at 10.8 percent versus 8.2 percent.

Jaiprakash Power Ventures (Q1, YoY)

  • Revenue up 8.75 percent to Rs 1083.07 crore.
  • Ebitda up 24.4 percent to Rs 436.8 crore.
  • Margin at 40.3 percent versus 35.2 percent.
  • Net profit at Rs 4.14 crore versus net loss of Rs 19.02 crore.

Laurus Labs (Q1, YoY)

  • Revenue up 12.7 percent to Rs 539 crore.
  • Net profit down 57.3 percent to Rs 16.6 crore.
  • Ebitda down 16.6 percent to Rs 80.5 crore.
  • Margin at 14.9 percent versus 20.2 percent.

Adlabs Entertainment (Q1, YoY)

  • Revenue down 2.2 percent to Rs 84.7 crore.
  • Net loss of Rs 20.9 crore versus net loss of Rs 22.5 crore.
  • Ebitda up 5.9 percent to Rs 34.1 crore.
  • Margin at 40.3 percent versus 37.2 percent.

Shipping Corporation of India (Q1, YoY)

  • Revenue up 3.4 percent to Rs 894.3 crore.
  • Net loss of Rs 206 crore versus net loss of Rs 6.7 crore.
  • Ebitda down 98.2 percent to Rs 3 crore.
  • Margin at 0.3 percent versus 19.2 percent.

Entertainment Network (India) (Q1, YoY)

  • Revenue up 16.4 percent to Rs 121.6 crore.
  • Net profit up 102.2 percent to Rs 9.3 crore.
  • Ebitda up 65.5 percent to Rs 28.3 crore.
  • Margin at 23.3 percent versus 16.4 percent.

Sandhar Tech (Q1, YoY)

  • Revenue up 25 percent to Rs 493 crore.
  • Net profit up 48 percent to Rs 22 crore.
  • Ebitda up 15 percent to Rs 49 crore.
  • Margin at 10 percent versus 10.8 percent.

PI Industries (Q1, YoY)

  • Revenue up 9.5 percent to Rs 606 crore.
  • Net profit down 18.4 percent to Rs 82 crore.
  • Ebitda down 9.4 percent to Rs 118 crore.
  • Margin at 19.5 percent versus 23.6 percent.

Stocks To Watch

  • Avendus set to buy IDFC mutual funds and securities units in deal valued between Rs 5,000-6,000 crore (The Economic Times)
  • Wipro to settle National Grid lawsuit for $75 million in the U.S.
  • ICRA proposing a buyback of shares on Aug. 9.
  • Allahabad Bank mulls raising equity capital by was preference issue to GoI on Aug. 14.
  • Premier Explosives bagged orders worth Rs 68.9 crore from Coal India.
  • Puravankara’s Goa arm received bookings for more than 800 units for residential project.
  • Tata Group and Dabur India to bid for Kraft Heinz $1 billion sale of India business. Cadila Healthcare arm shows interest in the Kraft Heinz offer for sale. (Bloomberg)
  • TCS’ board approved buyback. Record date fixed at Aug. 18.

Also Read: Kraft Heinz Is Narrowing Bidders in $1 Billion India Sale

New Listing

  • HDFC AMC shares to start trading on BSE/NSE after IPO that got 83 times demand at Rs 1,100 each.

Indian ADRs

Bulk Deals

  • Delta Corp: Morgan Stanley France sold 23 lakh shares, or 0.9 percent equity at Rs 266.07 each.
  • PVR: Fidelity Investment Trust-Fidelity International Discovery Fund sold 4.03 lakh shares, or 0.9 percent equity at Rs 1172.59 each.

Indiabulls Housing Finance Ltd

  • Jasmine Capital Investments Pte Ltd bought 22.7 lakh shares, or 0.5 percent equity at Rs 1374.6 each.
  • Orient Global Cinnamon Capital Limited sold 22.7 lakh shares, or 0.5 percent equity at Rs 1374.6 each.

Tejas Networks Ltd

  • Eastbridge Capital Master Fund Limited bought 19.17 lakh shares, or 2.1 percent equity at Rs 259.98 each.
  • Birla Sun Life MF bought 8 lakh shares, or 0.9 percent equity at Rs 260.25 each.
  • Samena Spectrum Co. sold 45 lakh shares, or 4.9 percent equity at Rs 260.27 each.

Trading Tweaks

  • TVS Electronics Ltd. placed under the ASM framework.
  • Venkys circuit filter revised to 10 percent.
  • Music Broadcast buyback worth Rs 57 crore at a maximum Rs 385 per share starts today.

Also Read: Fiat Chrysler Seeks to Block Mahindra Jeep Knock-Off in U.S.

Who’s Meeting Whom

  • Indian Toner’s and Developers to meet investors on Aug. 6.
  • CRISIL to meet Motilal Oswal Securities and other investors from Aug. 6-20.
  • Infosys to meet investors from Aug. 7-9.

Insider Trades

  • JSW Steel promoter JSW Techno Projects Management Ltd. acquired 8 lakh shares from July 31–August 1.
  • Singer India promoter Retail Holdings (India) B.V. sold 4,500 shares on Aug. 2.
  • Cosmo Films promoter Ashok Jaipuria acquired 16,244 shares from Aug. 1–2.
  • Plastiblends India promoter Jyoti V Kabra acquired 11,085 shares from July 23–Aug. 1.

As reported on Aug. 3

Rupee

  • Rupee ended at 68.62/$ versus 68.71/$ on Thursday.

F&O Cues

  • Nifty August Futures closed trading at 11,395.7, premium of 34.9 points versus 37 points.
  • August series-Nifty Open Interest up 3 percent and Bank Nifty Open Interest up 15 percent.
  • India VIX ended at 12, down 3.8 percent.
  • Maximum Open Interest for August series at 11,500 Call, Open Interest at 31.4 lakh, Open Interest down 12 percent.
  • Maximum Open Interest for August series at 11,000 Put Open Interest at 49.5 lakh, Open Interest up 7 percent.

F&O Ban

  • In Ban: Adani Power, Jet Airways
  • New In Ban: Jet Airways
  • Out Of Ban: None

Put Call Ratio

  • Nifty PCR at 1.72 versus 1.64.
  • Nifty Bank PCR at 1.34 versus 0.86.

Stock Futures-OI Change All Series

Fund Flows

Brokerage Radar

Deutsche Bank on Berger Paints

  • Initiated ‘Buy’ with a price target of Rs 375.
  • Product differentiation and distribution expansion to drive double-digit volume growth.
  • New niche segments a strong medium-term growth driver.
  • Expect moderate margin expansion to continue.
  • Expect revenue and net profit grow at a compounded annual growth rate of 17 percent and 22 percent respectively over FY18-21.

Deutsche Bank on Kansai Nerolac

  • Initiated ‘Buy’ with a price target of Rs 575.
  • Fastest-growing paint company and key beneficiary of a likely capex cycle revival.
  • Margin expansion to continue led by premiumisation and operating leverage.
  • Leveraging parents global technology for new launches.
  • Capacity to increase by 50 percent over next three years.
  • Expect revenue and net profit to grow at a compounded annual growth rate of 17 percent over FY18-21.

Morgan Stanley on GAIL (India)

  • Maintained ‘Overweight’; cut price target to Rs 473 from Rs 511.
  • Fundamentals are getting strong.
  • Positives: push to lower pollution, clarity on hike in pipeline tariff.
  • Weaker U.S. gas prices coupled with higher oil prices to lead to upside risks.
  • Cut price target due to lower multiples across its businesses due to higher bond yields in India.

JPMorgan on HCL Tech

  • Maintained ‘Overweight’ with a price target of Rs 1,050.
  • Risk-reward balance delicately poised.
  • Judicious course-correction can shift balance in a more favorable direction.
  • Do not see HCL making disruptive moves to improve its positioning in digital.
  • Maintaining margins can be difficult in the face of continued growth difficulties.

Morgan Stanley on Tata Global Beverages

  • Maintained ‘Underweight’; raised price target to Rs 170 from Rs 150.
  • June quarter earnings were in-line with estimates.
  • Another quarter of weak operating performance.
  • Low earnings visibility remains the key concern.

Citi on HDFC Bank

  • Maintained ‘Buy’ with a price target of Rs 2,590.
  • Capital raise to boost capital ratios and support growth.
  • Accelerated growth to help net interest margins.
  • See good lending opportunities across wholesale and SME space as well.

Also Read: The Mutual Fund Show: Don’t Ignore These Warning Signs While Investing

Brokerages On Hero MotoCorp

Citi

  • Maintained ‘Buy’ with a price target of Rs 4,250.
  • Supportive macro for two wheeler growth in India.
  • Hero plans to counter opposition by product action rather than price action.
  • Access and cost of finance could be big demand drivers.
  • Second hand bike market could see a spurt.

Deutsche Bank

  • Maintained ‘Hold’ with a price target of Rs 3,550.
  • Hero to continue its strategy of "better features, higher pricing".
  • Rapid growth in 125cc segment to help improve overall scooter market-share.
  • Remain cautious on mass-market two wheeler companies.
  • Expect several headwinds for margins.

Brokerages On Godrej Properties

JPMorgan

  • Maintained ‘Neutral’ with a price target of Rs 850.
  • Accounting change impacts net earnings.
  • Like-to-like financials much better.
  • Pre-sales come off partly on higher base.
  • Real estate companies to now focus on deliveries rather than hitting revenue recognition thresholds.

Morgan Stanley

  • Maintained ‘Equal-weight’; raised price target to Rs 707 from Rs 682.
  • Opening net worth lower by Rs 740 crore due to IND AS.
  • Management optimistic on pickup and expects consolidation to continue.
  • Expect Godrej to continue to deliver on new project acquisitions.
  • Expect new launch momentum in the ensuing quarter.

Brokerages On Nestle

UBS

  • Maintained ‘Neutral’ with a price target of Rs 10,750.
  • June quarter was a strong quarter where profit surpassed estimates and volume were in line.
  • New launches continue; management warns about raw material inflation.
  • Margins to come under pressure in the near term.
  • Strong performance priced in; limited upside.

CLSA

  • Maintained ‘Outperform’; raised price target to Rs 11,700 from Rs 10,200.
  • June quarter results were ahead of estimates.
  • Good growth with strong margin expansion.
  • Input costs are inching up but strong pricing power allays margin concerns.
  • Believe Nestle is on a good growth trajectory.

Brokerages On Titan

CLSA

  • Maintained ‘Outperform’ with a price target of Rs 1,050.
  • June quarter results ahead of estimates; Massive margin gains in watches.
  • Jewellery: Higher Ebit, but weaker revenues.
  • Management sounded positive and maintained its guidance for above 25 percent jewellery growth.
  • Sustained pick-up in growth is critical for stock-price performance.

Morgan Stanley

  • Maintained ‘Overweight’ with a price target of Rs 1,080.
  • June quarter reported in line earnings.
  • Key positive for the quarter is the watch business margin.
  • Key disappointment during the quarter was the jewellery business margin.

. Read more on Markets by BloombergQuint.