Friday, 18 May 2018

US stocks slip as dollar gains; Brent hits $80-mark after 3 years

US stocks edged lower in early trading and the 10-year Treasury yield pushed above 3.1% as global markets continue to grapple with the outlook for the world’s largest economy. Brent crude punched through the $80 per barrel-mark.

The S&P 500 index fell as disappointing results from Cisco Systems weighed on technology shares. The dollar added to its highest levels of the year after data on manufacturing and employment showed economic strength. West Texas oil climbed above $72 a barrel and Brent hit its highest in four years.

In Europe, the common currency euro was slightly weaker and Italian bonds dropped as party leaders sealed an agreement to form a populist government. The pound jumped but then pared gains amid conflicting reports over Britain’s future in the EU customs union. The Stoxx Europe 600 index advanced. Earlier in Asia, equities rose in Japan and fell in Australia and Korea.

Recent evidence that the world’s largest economy will continue to pick up steam is currently just a consolation prize for investors, who are having to adjust to the highest US bond yields in years as well as second-guess issues stretching from peace on the Korean peninsula to Italian populists forming a government. Looming over it all are trade talks between the US and China, the outcome of which could cement the global growth story -- or derail it.

Thursday, 17 May 2018

US stocks rise as 10-year yield slips from high@HIGHLIGHT INVESTMENT

US stocks advanced as consumer shares got a boost from Macy’s results and Treasuries rebounded from Tuesday’s selloff. The euro fell amid political uncertainty in Italy.

The S&P 500 index pushed above its average price for the past 100 days, with Macy’s results providing more insight into the strength of the American consumer. The 10-year note yield slipped from a seven-year hit after retail sales data bolstered bets the Federal Reserve may step up its tightening plans.

Europe’s common currency fell as Italy moved closer to a populist government and the German chancellor cautioned that the region’s central bank will eventually ease stimulus.

Emerging-market equities were slightly stronger following Tuesday’s plunge, but developing currencies turned lower. The Turkish lira reversed a drop after the central bank said it was monitoring markets and would take necessary steps.

In Asia, stocks nudged lower, with shares in Japan and Hong Kong declining while Australia’s main gauge eked out a gain and Korean stocks were little changed. The Malaysian ringgit fell for a sixth day.

Wednesday, 16 May 2018

TVS Motor Company Q4FY18E result expectation

Expectations (Standalone) for Q4FY18E*:
  • Revenue: Rs3,988cr; up 40% yoy, led by 32% yoy volume growth and 7-8% yoy realization growth. Realization improvement due to better product mix – increasing share of premium motorcycles to the total volume mix and export contribution of 18% to total volumes in Q4FY18 vs. 16% in Q4FY17.
  • EBITDA: Rs342cr; up 111% yoy
  • EBITDA margin: 8.6%; expansion of 289bps yoy. The margin expansion will be led by lower raw material costs (as % of sales) and steady operating expenses. It is unlikely that exit EBITDA margins will reach the double-digit mark that the management has been guiding for quite a few quarters. However, the overall trajectory remains upward and we could see double digit margins in the ensuing quarters.
  • PAT: Rs197cr; up 55% yoy
*Numbers based on consensus estimates

Q3FY18 performance highlights:

  • Revenue: Rs3,685cr; up 24% yoy led by 15% yoy volume growth and 7% yoy realization growth. Realization growth during the quarter (7% yoy) was aided by a better product mix. The company sold a higher proportion of scooters (32.5% vs. 31%) and 3Ws (3% vs. 2%) in Q3FY18 compared to Q3FY17.
  • EBITDA: Rs287cr; up 31% yoy
  • EBITDA margin: 7.8%; expansion of 46bps yoy, due to higher realization, better product mix
  • PAT: Rs154cr; up 16% yoy
  • While double-digit exit EBITDA margin for Q4FY18 looks unlikely, management commentary on the same will be keenly watched.
  • Customer response to Ntorq (scooter) and the new version of Apache (motorcycle) has resulted in better realization for the company.
  • Capex guidance for FY19 will be watched for.

Tuesday, 15 May 2018

Gold futures slide on global cues@HIGHLIGHT UPDATES

Gold prices dipped in futures trade today as speculators trimmed their positions post a weak overseas trend. Analysts said off-loading of positions by participants in line with a weak trend overseas on a firm dollar and outlook for further interest rate hikes in the United States, mainly influenced gold prices at the futures trade.

At the MCX, gold futures for June 2018 contract is trading at Rs 31343 per 10 grams, down by 0.51 per cent, after opening at Rs 31450 against a previous close of Rs 31504. It touched the intra-day low of Rs 31319 .

MCX PREMIUM CALL: SELL GOLD BELOW 31350 TARGETS 31280 / 31200 / 31100 STOPLOSS 31460 

All eyes on Karnataka election results, markets to stay volatile

SGX Nifty is currently trading flat down 3 points at 10,805.

Volatility in the market is expected to surge during the session, as the counting for the crucial Karnataka assembly poll gets underway. Britannia Industries, Crompton Greaves Consumer, Karnataka Bank, Lupin, PNB, and Reliance Communications are some of the large-cap companies set to announce their Q4 results today.

Global markets
Asian markets are trading flat, Nikkei is up 0.07%, Hang Seng is down 0.34%, while the Shanghai Composite is trading up 0.07%.

US Markets: Stocks manage to close in the green but off the high point of the day. The Dow closed 0.3% higher at 24,889.41, the Nasdaq and S&P 500 inched up 0.1% to 7,411.32 and 2,730.13 respectively.

The early strength on Wall Street came amid easing trade tensions ahead of the second round of trade talks between the US and China this week.

European markets closed marginally in the red yesterday with FTSE and DAX closing 0.18% lower, while the CAC was down 0.02%.

Monday, 14 May 2018

Markets indicate a flat opening as exit polls predict a hung assembly in Karnataka

SGX Nifty is currently trading flat down 4 points at 10,819.

The action is expected to be stock specific as traders await the results of Karnataka assembly polls, which would be announced tomorrow.

Abbott India, Hindustan Unilever and South Indian Bank are some of the large-cap companies set to announce their Q4 results later in the day.

Global markets
Asian markets are trading with a positive bias, Nikkei is up 0.16%, Hang Seng is up 1.25%, while the Shanghai Composite is trading up 0.45 %.

US Markets: Stocks witnessed a lackluster trading session on Friday, however, managed to end the week on a positive note.

The Dow surged 0.4% to 24,831.17, the S&P 500 rose 0.2% to 2,727.72, while the Nasdaq edged down less than a tenth of a percent to 7,402.88.

Trading momentum receded after initially opening on a strong note. Traders also took note of President Donald Trump's outline to reduce high drug prices, which he has previously described as a top priority for his administration.

European markets closed mixed on Friday with FTSE closing 0.31% higher, CAC was down 0.07%, while the DAX ended 0.17% lower.

FII Data: 
In Friday’s trading session, FII’s sold 325 crores stock in the cash market whereas DII’s bought 1,163 crores worth of stock.

In the derivative market, FII’s bought 863 crores of Index futures and sold 623 crores worth of Index options.

In the stock futures segment, FII’s bought 560 crores worth of stock futures and sold 149 crores stock options.

FII View: FII trading activity in Friday’s session indicate a fresh addition of long position, which is deduced by the fact that FII’s created 16,957 long contracts in Index Futures, while they simultaneously created 13,040 long contracts in Index Call options. Their net position in May series continues to remain long, which is indicated by a long short ratio of 1.4x.

% Chg
% Chg Since Expiry
Long/Short Ratio
Long/Short Since Expiry
Future Index Long
Future Index Short
Option Index Call Long
Option Index Call Short
Option Index Put Long
Option Index Put Short

Support / Resistance: Intraday
Nifty: 10806
S1 – 10720
R1- 10880
R2 -11000

Support / Resistance: Intraday
Bank Nifty: 26413
S1 – 26200
R1 - 26520
R2 -26700

Saturday, 12 May 2018

Walmart says Flipkart could go public in as early as four years

Walmart Inc said on Saturday in a filing with a U.S. regulator that it may take India's Flipkart public in as early as four years, detailing for the first time a potential listing timeline for Walmart's largest-ever acquisition.

Minority investors holding 60 percent of Flipkart's shares "acting together, may require Flipkart to effect an initial public offering" (IPO) four years after the close of the Walmart-Flipkart transaction, the Bentonville, Arkansas-based retailer said in a May 11 filing with the U.S. Securities and Exchange Commission.

The IPO should be done at no less a valuation than that at which Walmart invested in the Indian firm, the filing said.

Walmart announced earlier this week that it will pay $16 billion for a roughly 77 percent stake in Flipkart in what is the U.S. retail giant's largest-ever deal and a move to take on arch rival Inc in a key growth market.

The investment implies a valuation of nearly $21 billion for Bengaluru-headquartered Flipkart.

Minority shareholders after the deal include co-founder Binny Bansal, China's Tencent Holdings, U.S. hedge fund Tiger Global Management and Microsoft Corp.

Friday, 11 May 2018

SoftBank still undecided on exiting Flipkart

Japan's SoftBank Group Corp has not yet decided to sell its 20-22 percent stake in Flipkart to US retailer Walmart Inc, sources with direct knowledge of the development said. 

SoftBank's Masayoshi Son will take a call in the next 7-10 days on whether to exit India's biggest online retailer or say invested for some more time, they said.

Walmart had on Wednesday announced that it will pay about USD 16 billion to buy 77 percent stake in Flipkart.

A statement issued by Walmart that day identified Flipkart co-founder Binny Bansal, Tencent Holdings Ltd, Tiger Global Management LLC and Microsoft Corp as the investors who would hold the remaining 23 percent, implying SoftBank had agreed to sell its 20-22 percent stake.

Thursday, 10 May 2018

Punjab, Haryana wheat procurement nearly 208.5 lakh tonnes

Making it another bumper Rabi crop, food grain states Punjab and Haryana have procured over 208.5 lakh tonnes of wheat this season, officials in both states said on Wednesday.

In Punjab, the wheat procurement was nearly 123.5 lakh tonnes as compared to nearly 117 lakh tonnes procured in the same period last year. Over 99 per cent of the wheat has been procured by government agencies.

"Payment of more than Rs 17,767 crore has been released to the farmers through the commission agents ('arhtiyas')," a Food and Supplies Department spokesman said here.

Officials said that out of the wheat procured, nearly 109 lakh tonnes have been lifted from grain markets for storage.

In Haryana, over 85 lakh tonnes of wheat has been procured so far this season. The procurement is higher than the entire procurement done last year when 74.25 lakh tonnes wheat was procured.

Zydus Cadila gets USFDA nod for Carbidopa tablets

Zydus Cadila has received final approval from the US health regulator to market Carbidopa tablets, used for treating symptoms of Parkinson's disease. Parkinson's symptoms include shakiness, stiffness and difficulty in moving.

Zydus Cadila has received the final approval from the USFDA to market Carbidopa tablets (25 mg), the company said in a BSE filing.

The approved product will be manufactured at the group's manufacturing facility at SEZ, Ahmedabad.

The Zydus group has more than 190 approvals and so far filed over 320 abbreviated new drug applications (ANDAs) since it started filings in 2003-04.

Shares of Cadila Healthcare, the listed entity of the group, were up 0.31 per cent at Rs 401.75 per scrip on BSE today.

Wednesday, 9 May 2018

Eicher Motors Q4FY18E result expectation

Expectations for Q4FY18E (Consolidated)*:
  • Revenue: Rs2,509cr; up 33% yoy; expect growth to be strong led by 27% yoy and 33% yoy volume growth for Royal Enfield and VECV respectively; Realization gain for RE to be in the 3-5% range due to price hikes taken by the company
  • EBITDA: Rs800cr; up 37% yoy; healthy product mix in RE as proportion of higher capacity motorcycles to the total volume mix has been steadily upwards
  • EBITDA margin: 31.9%; expansion of 34bps yoy
  • PAT: Rs630cr; up 37% yoy; we expect Rs289.50cr write-off of investment in JV entity Eicher Polaris Private Limited during the quarter
*Numbers based on consensus estimates

Q3FY18 performance highlights (Consolidated):

  • Revenue: Rs2,269cr; up 24% yoy; led by 19% yoy volume growth and 4% yoy realization growth in Royal Enfield and 38% yoy volume growth (realization flat) in VECV
  • EBITDA: Rs707cr; up 23% yoy
  • EBITDA margin: 31.2%; contraction of 28bps yoy; higher operating and marketing expenses incurred for launch of its new models
  • PAT: Rs521cr; up 25% yoy
  • Over the past few months, demand for motorcycles with higher engine capacity (>350cc) has grown at a faster rate than other (<350cc) models. Sustainability of this trend will be key to margin expansion.
  • Commentary on margin trend and level of discounting for VECV will be keenly watched.
  • Commentary on capacity expansion for Royal Enfield and trend of waiting period will be keenly watched.

Tuesday, 8 May 2018

Asian stocks climb; Dollar steadies, oil retreats

Asian stocks inched higher on Tuesday as traders braced for an announcement from Washington on the nuclear accord with Iran. The dollar retreated from its strongest level this year and crude pared gains above $70 a barrel.

Japan’s equities advanced with stocks in Australia, Hong Kong and South Korea. Chinese shares were little changed as were S&P 500 Index futures. Oil, which reached its highest since November 2014 amid speculation that the U.S. would pull out of the Iran nuclear accord, fell back ahead of President Donald Trump’s scheduled decision on Tuesday. Yields on 10-year Treasuries hovered around 2.95%.

Investors are weighing the potential impact on markets of the U.S. exiting the Iran nuclear deal as well as its effect on relations with key allies, including Germany, France and the U.K., who oppose the withdrawal. Geopolitical jitters – along with the start of the summer driving season and positive jobs data -- had helped push oil above $70 a barrel.

Monday, 7 May 2018

White metal rises on strong global cues@

Silver futures were trading higher in the domestic market on Monday taking positive cues from the global market. Market analysts said a firm trend in precious metals in global market mainly attributed to the rise in silver prices at the futures trade.

At the MCX, silver futures for July 2018 contract closed at Rs 39,933 per kg, up by 0.50 per cent, after opening at Rs 39,866 against a previous close of Rs 39,734. It touched the intra-day high of Rs 40,050.

Lead futures were trading higher during the afternoon trade in the domestic market on Monday as participants created fresh positions, taking positive cues from spot market on pick-up in demand. Marketmen said building up of positions by traders backed by upsurge in demand from battery-makers at domestic spot market, supported the upside in lead prices at futures trade.
At the MCX, lead futures for May 2018 contract is trading at Rs 156.50 per kg, up by 0.61 per cent, after opening at Rs 156.30, against a previous close of Rs 155.55. It touched the intra-day high of Rs 156.80.