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All You Need To Know Going Into Trade On October 13

Asian equity gauges were largely flat after the S&P 500 Index edged lower, following a run of gains in global stocks that’s seen historic highs hit this week.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, declined 0.23 percent to 10,102 as of 6:55 a.m.

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

Global Cues

  • U.S. shares were weighed down by declines in JPMorgan Chase & Co. and Citigroup Inc. on concerns about consumer credit and a plunge in revenue from trading.
  • The pound rallied overnight as Handelsblatt reported Europe’s top negotiator may offer the U.K. a two-year transition to stay in the single market as long as Britain meets financial obligations.
  • The euro remained about a cent above the seven-week low it hit last Friday after a report on plans under discussion at the European Central Bank to cut quantitative purchases in half next year.
  • Bitcoin surged to a fresh record, climbing above $5,300, while oil traded around $51 and gold was flat.

Asian Cues

  • Japan’s Nikkei 225 was flat, after closing at the highest since 1996 on Thursday. Fast Retailing Co., the gauge’s biggest component, climbed 3.2 percent as overseas sales rose. The broader Topix index was down 0.2 percent.
  • Australia’s S&P/ASX 200 Index advanced 0.2 percent, while futures on Hong Kong’s Hang Seng Index were little changed.
  • Futures on the S&P 500 Index were down less than 0.1 percent .

What’s coming up this week:

  • China’s export growth is forecast to pick up to 10 percent in September from 5.6 percent the previous month, on robust U.S. and EU demand. Import growth is also expected to accelerate, with the trade surplus narrowing to $38 billion. The central bank may also release monthly loan and money-supply data.
  • The active Atlantic hurricane season will probably figure prominently in U.S. data on retail sales and consumer prices. U.S. wholesale prices jumped in September by the most in five months as gasoline costs spiked after Hurricane Harvey. The producer-price index rose 0.4 percent.

Commodity Cues

  • West Texas Intermediate crude added 0.3 percent to $50.75 a barrel. It declined 1.4 percent in Thursday’s session, but is still on course for a weekly advance.
  • Gold was steady at $1,294.54 an ounce. It’s up 1.4 percent this week, snapping four weeks of losses.
  • ICE sugar snapped three-day winning streak, trades lower at 14.28 cents a pound; down 0.14 percent

Shanghai Exchange

  • Steel trades higher for second day; up 3.1 percent
  • Aluminium trades higher; up 1.13 percent
  • Zinc snaps three-day losing streak; up 1.53 percent
  • Copper trades higher for third day; up 0.93 percent
  • Rubber trades higher; up 1.55 percent

Indian ADRs

Nifty Results Today

  • Reliance Industries Ltd.

Other Results Today

  • Bhansali Engineers
  • GNA Axles
  • Karnataka Bank
  • Kirloskar Oil Engines
  • MCX
  • Reliance Naval

Results Announced On Thursday

Tata Consultancy Services (Q2FY18, QoQ)

  • Total income rose 3.2 percent to Rs 30,451 crore
  • EBIT grew 10.8 percent to Rs 7660 crore
  • EBIT margins at 25.1 percent versus 23.4 percent
  • Profit up 8.4 percent to Rs 6,446 crore

Reliance Industrial Infrastructure (Q2FY18, QoQ)

  • Revenue fell 14.8 percent to Rs 19.85 crore
  • EBITDA declined 32.4 percent to Rs 3.65 crore
  • EBITDA margins at 18.4 percent versus 23.2 percent
  • Profit down 20.6 percent to Rs 2.7 crore

Stocks To Watch

  • Tata and Bharti Airtel to combine consumer telecom business in cash-free, debt-free deal
  • Piramal Enterprises approves raising Rs 2,000 crore through a rights issue
  • Sun Pharma to increase shareholding in Ranbaxy Malaysia to 79.5 percent from 71.2 percent
  • Shriram EPC: Wins Rs 349 crore of multiple orders
  • M&M, Shapoorji, Liberty House view for ABG Shipyard; offer Rs 3,000-3,500 crore for assets. Lenders face a haircut of 70 percent (Economic Times)

Circuit Revisions

  • GM Breweries circuit filter changed to 10 percent.

IPO Watch

  • General Insurance Corporation of India continues on day 3. The issue was subscribed 0.9 times at end of day 2.
  • Reliance Nippon Life Asset Management IPO at Rs 247-252 a share starting October 25

Bulk Deals

Atul Auto

  • Goldman Sachs India sold 2.94 lakh shares or 1.3 percent stake at Rs 463.05 each
  • Birla Sun Life MF bought 1.75 lakh shares or 0.8 percent stake at Rs 463 each

Sterlite Technologies

  • Adar Cyrus Poonawalla sold 40.46 lakh shares or 1 percent stake at Rs 263.63 each
  • Serum Institute of India bought 40.46 lakh shares or 1 percent stake at Rs 263.63 each

Som Distilleries

  • Ranjeet Singh Pawar sold 2.01 lakh shares or 0.7 percent stake at Rs 164.83 each
  • Santosh Bhadoriya sold 2.43 lakh shares or 0.9 percent stake at Rs 165.13 each
  • Param Capital bought 2 lakh shares or 0.7 percent stake at Rs 163.85 each

Singer Ltd

  • Promoter Singer (India) B.V. sold 1.35 lakh shares or 1.3 percent stake at Rs 240.69 each

Who’s Meeting Whom?

  • Capacite Infra to meet Goldman Sachs, Emkay and Kotak MF on October 13
  • TCI Express meeting a series of investors including likes of MOSL AMC, IDFC MF, Goldman Sachs, Morgan Stanley on October 13
  • Greenlam Inds to meet ASK Investment Managers on October 13
  • Finolex Inds to meet India Avenue Investment Management on October 13
  • Eris Life to meet Prabhudas Lilladhar on October 13 and Old Bridge Capital on October 16

Insider Trades

  • Panasonic Carbon promoter sold 21,438 shares in open market on October 10
  • Talwalkars promoter sold 1 lakh shares in open market on October 10
  • Digjam promoter sold 3.45 lakh shares in open market from October 9-11
  • Dish TV promoter created pledge of 5.2 lakh shares

(Reported as of October 12)

Rupee

  • Rupee closed at 65.08/$ on Thursday versus 65.14/$ on Wednesday

Top Gainers And Losers In Last 30 Days

Index Trends

F&O Cues

  • Nifty October Futures closed with a premium of 15 points versus 7.5 points at 10,111.4
  • October Futures: Nifty open interest up 4 percent; Bank Nifty open interest down 10 percent
  • India VIX closed lower by 5.8 percent at 11.04
  • October series highest Call base at 10,000 (open interest at 37.9 lakh, down 25 percent)
  • October series highest Put base at 10,000 (open interest at 65.4 lakh, up 24 percent)
  • October call strikes 10,000 10,100, 10,200 saw open interest unwinding
  • October put strikes 9900, 10,000, 10,100 saw open interest addition

F&O Ban

  • In ban: Bharat Earth Movers, DHFL, Indiabulls Real Estate, JSW Energy, Reliance Communications, Reliance Capital
  • No new stocks in or out of ban list.

Only intraday positions can be taken in stocks which are in F&O ban. There will be a penalty in case of a rollover.

Put-Call Ratio

  • Nifty PCR at 1.50 from 1.35
  • Nifty Bank PCR at 1.67 from 1.04

Stocks Seeing High Open Interest Change

  • NBCC saw open interest addition of 53 percent on long side
  • Nestle saw open interest addition of 18 percent on long side
  • Hindalco saw open interest addition of 16 percent on long side
  • Britannia saw open interest addition of 16 percent on long side
  • PFC saw open interest addition of 14 percent on short side
  • NIIT Tech saw open interest addition of 13 percent on long side
  • Nalco saw open interest addition of 13 percent on long side
  • Bharti Infratel saw open interest addition of 12 percent on long side
  • TCS saw open interest addition of 12 percent on long side

Fund Flows

Brokerage Radar

Credit Suisse on Bharti Airtel

  • Upgraded to Neutral from Underperform; hiked price target to Rs 400 from Rs 320
  • Expect significant cost and network synergies from Tata deal
  • Deal adds value accretion of Rs 80 per share
  • Deal to place Bharti neck-to-neck with Idea + Vodafone
  • Risk from Jio’s aggressive positioning prevents from turning more constructive on the stock

UBS on Bharti Airtel

  • Maintain Buy Rating with price target of Rs 495
  • Tata Tele acquisition will likely be EBITDA accretive for Airtel from the start
  • Airtel will take 30-40 percent of spectrum liabilities (Rs 8,000-8,500 crore), essentially getting spectrum at a lower price
  • Bharti will be key long-term winner given its scale, spectrum footprint and network head-start

AnandRathi on Sanghi Industries

  • Initiates Buy with price target of Rs 147; Potential Upside 28 percent
  • One of the lowest-cost producers of cement
  • Strong pricing and demand in western markets, along with savings to drive its EBITDA/tonne
  • Plans to double cement and power capacities over FY19-20
  • Expect volume and revenue to grow at CAGR of 8 percent and 18 percent over FY17-20
  • Utilisation in next two years to improve to 82 percent versus 70 percent

Kotak Securities on Bharti Airtel

  • Upgraded to Add from Reduce; hiked price target to Rs 470 from Rs 430
  • Deal with Tata is positive for Bharti
  • Bharti likely to surrender a bulk of the 107.25 MHz administered spectrum
  • Bharti would take close to Rs 3,000 crore of spectrum liability

CLSA on IndusInd Bank

  • Maintain Buy with price target of Rs 2,060
  • Q2FY18 was tad ahead of estimates; Operating profit grew aided by healthy topline and efficiencies from digitisation
  • Expect 25 percent CAGR in profit over FY17-20 as it leverages deposit franchise
  • IndusInd top picks in the sector

UBS on IndusInd Bank

  • Maintain Neutral with price target of Rs 1,800
  • Bank continues to report strong growth across all parameters
  • Net interest income, loan book and asset quality largely stable
  • Likely merger announcement with Bharat Financial to be positive; EPS and ROE accretive

CLSA on TCS

  • Maintain Buy; hiked price target to Rs 2,970 from Rs 2,880
  • Q2FY18 was mixed, with third successive quarter of soft CC revenue growth
  • Expect growth recovery in insurance and retail to precede a recovery in banking
  • Expect growth acceleration from Q4FY18

Credit Suisse on TCS

  • Maintain Neutral; hiked TP to Rs 2,350 from Rs 2,250
  • Impressive growth in digital demonstrates that TCS has been able to make the transition
  • TCS to likely fall short of its targeted 26-28 percent margin level in FY18

Morgan Stanley on TCS

  • Maintain Underweight; hiked price target to Rs 2,250 from Rs 2,100
  • Results were a miss on revenues, beat on margins and net income
  • EPS estimates for FY18, FY19 and FY20 by 1.5 percent, 2.1 percent and 1.5 percent respectively on better margin performance
  • Strong margin performance led by currency and cost initiatives

Macquarie on TCS

  • Maintain Neutral; hiked price target to Rs 2,375 from Rs 2,224
  • FY18/19 EPS estimates slightly increased to factor in 8 percent (YoY) growth in $ revenue
  • Expect FY18 margins to be at 25 percent below company estimate of 26–28 percent
  • Pecking Order: HCL Tech > Infosys > TCS > Wipro and TechM

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