Oil prices fall amid economic slowdown, despite ongoing OPEC supply cuts

Oil prices fell on Tuesday amid a global economic slowdown that is starting to hit oil demand, triggering calls in producer club OPEC for supply cuts to be extended.

Front-month Brent crude futures, the international benchmark for oil prices, were at $60.88 at 0038 GMT. That was 40 cents, or 0.7%, below last session's close.

U.S. West Texas Intermediate (WTI) crude futures were at $52.94 per barrel, down 31 cents, or 0.6%.

Crude oil futures are now around 20% below their 2018 peaks reached in late April.

"Slowing economic activity now threatens to derail our base case of robust cyclical (oil) demand growth," said Bank of America Merrill Lynch in a note.

South Korea's economy shrank by 0.4% in the first quarter while core inflation slowed to a near 20-year low in May, data showed on Tuesday, pointing to a further economic slowdown in Asia.

"We project Brent and WTI to average $70 per barrel and $59 per barrel respectively in 2019, and $65 per barrel and $60 per barrel in 2020," Bank of America said.

Oil prices were under downward pressure as "the tight supply focus (is) switching to increased risk of lower growth and demand," said Ole Hansen, head of commodity strategy at Saxo Bank.

"An escalation of the U.S.-China trade war has added further downside risks to already slowing economies," he said.

ANZ bank said the price falls came "despite OPEC strongly hinting at further production cuts."

The Middle East dominated producer club of the Organization of the Petroleum Exporting Countries (OPEC), together with some allies including Russia, has been withholding supply since the start of the year to prop up the market.

The group plans to decide later this month or in early July whether to continue withholding supply. OPEC's de-facto leader Saudi Arabia said on Monday a consensus was emerging for continued cuts in the second half of the year to ensure market stability.

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Market Live: Nifty starts June series near 12k, Sensex gains 100 points; Coal India up 3%

Market Opens: It is firm start for the June series as Indian indices opened on higher note with Nifty above 12,000 level.

At 09:17 hrs IST, the Sensex is up 149.96 points or 0.38% at 39981.93, and the Nifty up 60.40 points or 0.51% at 12006.30. About 530 shares have advanced, 311 shares declined, and 46 shares are unchanged. 

Bharti Airtel, HDFC Bank, JSW Steel, Coal India, HPCL, Berger Paints, IndiGo and Tata Steel are some of the major gainers on the indices in the early trade, while losers are ONGC, HUL, Kotak Mahindra Bank and 

All the sectoral indices are trading higher led by metal, pharma, bank, IT, auto, FMCG, pharma and infra.

Rupee Opens: The Indian rupee gained in the early trade on Friday. It has opened higher by 11 paise at 69.76 per dollar versus Thursday's close 69.87.

Market at pre-open: Benchmark indices are trading higher in the pre-opening session with Nifty test 12,000 level.

At 09:01 hrs IST, the Sensex is up 128.01 points or 0.32% at 39959.98, and the Nifty up 55.70 points or 0.47% at 12001.60.

Brokerages View: Source: CNBC-TV18

Citi on Coal India

Buy rating, target raised to Rs 320 from Rs 300 per share

Valuations at 9x 1-yr forward PE discount uncertainty on volume trends

CLSA on Coal India

Maintain buy rating, target raised to Rs 290 from Rs 275 per share

Q4 EBITDA higher than estimate, led by better-than-expected realisations

CLSA on Glenmark Pharma

Q4 below estimates due to a miss on US rev & higher R&D/SG&A spends

Expect investment phase to remain high over the next two years 

CLSA on IPCA Labs

Maintain sell call, target raised to Rs 780 from Rs 730 per share

Q4 EBITDA up 50% despite modest 7% revenue growth

CLSA on ONGC

Reiterate buy call, target raised to Rs 285 from Rs 240 per share

Slew of one-offs cause a big miss in Q4

Macquarie on ONGC

Outperform call, target at Rs 210 per share

Q4 EBITDA-EPS significantly below consensus & estimates

Nomura on Alkem Labs

Upgrade to buy from neutral, target raised to Rs 2,230 from Rs 1,965 per share

Q4 below estimates; but commentary suggests improved outlook

Nomura on Ujjivan Financial

Maintain reduce call, target at Rs 315 per share

Asset quality was steady, with GNPAs of 0.92% 

Nomura on KNR Construction

Maintain buy call, target at Rs 305 per share

Results beat both on revenue & EBITDA margin

Macquarie on Jagran Prakashan

Maintain outperform, target cut to Rs 146 from Rs 150 per share

Cut FY20/FY21 EPS estimates by 16%/12

Trump plans 5% tariff on Mexican imports: President Donald Trump, struggling to stem a surge of illegal immigrants across the southern border, vowed on Thursday to impose a tariff on all goods coming from Mexico starting at 5% and ratcheting higher until the flow of border-crossers ceases.

Wall Street ends higher: US stocks showed signs of stabilizing on Thursday, but gains were kept in check by conflicting comments on trade talks from President Donald Trump and Beijing that reinforced concerns about a potentially lengthy battle harming global growth.

Asian markets trades lower: Asian shares extended a month-long slide and sovereign bonds surged on Friday after US President Donald Trump ramped up trade tensions globally by suddenly slapping tariffs on all goods from Mexico, sending the peso tumbling.

SGX Nifty: Trends on SGX Nifty indicate a positive opening for the broader indices in India, a gains of 22.50 points or 0.19 percent. Nifty futures were trading around 11,998.50-level on the Singaporean Exchange.

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Stock Market News- Bharti Airtel gains, SJVN gains 6%.

Bharti Airtel gains over 1% - SingTel completes subscription of 17 cr shares in the rights issue of a company worth Rs 3,740 crore. Bajaj Auto, Powergrid shares have emerged among the biggest gainers, jumping up to 1.5%.

SJVN gains 6% on strong Q4 nos - Profit jumps to Rs 458.9 crore versus Rs 132.2 crore; revenue spikes to Rs 805.2 crore versus Rs 344.8 crore (YoY).

Rupee opening - Rupee opens stronger at 69.72/$ vs Wednesday's close of 69.83 against the US dollar

Aban Offshore gains almost 5% on fundraising plan - Board approves raising up to $400 million overseas and raising up to Rs 2,500 crore via QIP.

Crude Update: Oil prices climbed on Thursday after an industry report showed a decline in US crude inventories that exceeded analyst expectations.

Top gainers in the Sensex pack include NTPC, Coal India, Bharti Airtel, Bajaj Auto, TCS, Asian Paints, PowerGrid, Tata Motors, RIL, and ITC, rising up to 2 percent.

On the other hand, M&M, Vedanta, ONGC, Sun Pharma, HDFC, Maruti, Tata Steel, and ICICI Bank were among the losers in the index, shedding up to 1.29 %.

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Market Live: Sensex trades lower, Nifty around 11,900; metal, pharma under pressure

Among the sectors, except IT and Pharma all other indices are trading lower

Crude Update: Oil prices fell on Wednesday on concerns the Sino-US trade war could trigger a global economic downturn, but relatively tight supply amid OPEC output cuts and political tensions in the Middle East offered some support.

Gold Update: Gold held steady on Wednesday as worries about the global economic outlook kept investors focused on safe-haven assets, with no signs of an easing in the Sino-US trade-war.

Market Opens: Benchmark indices opened lower on May 29 with Nifty around 11,900 level.

At 09:17 hrs IST, the Sensex is down 47.14 points at 39702.59, while Nifty is down 11.50 points at 11917.30. About 418 shares have advanced, 418 shares declined, and 29 shares are unchanged. 

Zee Entertainment, Vedanta, Bharti Airtel, ICICI Bank, SBI and UltraTech Cement are among major losers on the Indices in the opening trade, while gainers are HDFC, TCS, Gail, Eicher Motors, HDFC Bank and L&T.

Among the sectors, except IT and Pharma all other indices are trading lower.

Rupee Opens: The Indian rupee opened lower at 69.75 per dollar on Wednesday versus previous close 69.69.

Market at pre-open: Benchmark indices are trading flat in the pre-opening session.

At 09:01 hrs IST, the Sensex is up 21.59 points or 0.05% at 39771.32, and the Nifty down 12.50 points or 0.10% at 11916.30.

Asian markets trade lower: Asian shares stumbled on Wednesday and global bonds rallied as investors fretted over the outlook for world growth with trade tensions between Washington and Beijing showing no signs of abating.

Brokerages View: Source: CNBC-TV18

Citi on Sun Pharma

Buy rating, target at Rs 540 per share

Reported Q4 numbers impacted by one-time adjustment 

Underlying numbers & trends indicate improvement QoQ 

Nomura on Sun Pharma

Buy rating, target at Rs 536 per share

Adjusted Q4 sales 2.5% below our estimate

Jefferies on Sun Pharma

Buy rating, target cut to Rs 520 from Rs 540 per share

Weak quarter led by investment in Ilumya

FY20 guidance is mixed

Credit Suisse on Sun Pharma

Maintain neutral, target at Rs 470 per share

Weak investment case with upside dependent on Ilumya

Investment phase not over; high promotion spend expected in FY20 too

CLSA on Sun Pharma

Maintain buy call, target cut to Rs 520 from Rs 560 per share

FY20 a critical year for US specialty product ramp-up 

Morgan Stanley on Sun Pharma

Underweight call, target at Rs 470 per share

Generic business is stabilising

UBS on Sun Pharma

Buy rating, target cut to Rs 500 from Rs 515 per share

Foresee a valuation discount for co to other large cap Indian pharma peers

CLSA on IRB Infra

Maintain buy rating, target at Rs 250 per share

FY19 earnings in-line despite economic slowdown led by construction 

Deutsche Bank on IRB Infra

Buy rating, target raised to Rs 185 from Rs 215 per share

Q4 result misses estimate on lower EPC margin

Citi on IRB Infra

Sell rating, target at Rs 139 per share

Profit fell due to increase in effective tax rate & higher interest costs

CLSA on Info Edge

Buy rating, target raised to Rs 2,400 from Rs 2,070 per share

All cylinders continued to fire for company in Q4

Jefferies on Info Edge

Hold rating, target at Rs 1,715 per share

Q4 revenue largely in-line across key businesses 

Morgan Stanley on PNB

Underweight call, target at Rs 75 per share

Balance sheet is weak given CET-I ratio at just 6.2%

PPoP is weak; any improvement will be gradual

Morgan Stanley on Prestige Estates

Overweight rating, target raised to Rs 347 from Rs 320 per share

Co a strong real estate brand in South India with steady growth visibility

CLSA on Prestige Estates

Maintain buy rating, target raised to Rs 345 from Rs 268 per share

Q4 strong both operationally & financially; pre-sales at 18-qtr high 

Citi on NMDC

Buy rating, target cut to Rs 120 from Rs 127 per share

Cut FY20-21 EBITDA estimates by 8-16% on lower volumes

SGX Nifty: Trends on SGX Nifty indicate a flat to negative opening for the broader index in India, a fall of 16.50 points or 0.14 percent. Nifty futures were trading around 11,912.50-level on the Singaporean Exchange.

Wall Street ends lower: US stocks closed lower on Tuesday, with initial gains giving way to declines as the likelihood of a prolonged trade war between the United States and China once again kept risk appetite in check.

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'Sustained trade above 11,950 can take Nifty beyond 12K'

Nifty closed at a record closing high on May 28 above 11,900. It witnessed selling pressure around 11,950 for the second day in a row and now a sustained trade above 11,950 can take the index higher to levels of 12,060-12,120.

On the flip side, a trade below 11,850 may trigger profit booking dragging the index towards 11,810-11,740. The Relative Strength Index (RSI) on the daily time frame suggests that the bullishness remains intact and the rally has more legs on the upside.

Here are three stocks that could give 7-15 percent return in the next 3-4 weeks:

Vedanta: Buy| LTP: Rs 169| Target: Rs 181| Stop loss: Rs 160| Upside: 7 percent

On the daily chart, Vedanta is on the verge of a breakout from a Triangle pattern neckline placed at Rs 168. A sustained trade beyond this neckline backed by healthy volumes can take the stock higher to Rs 176-181.

Moreover, it had taken support at the 78.6 percent Fibonacci retracement level in the recent correction and turned higher indicating that the bulls are actively buying at the support area to push the stock higher.

The RSI has also turned north after taking support at the 40-level forming a higher low. The stock may be bought in the range of Rs 165-167 for targets of 176-181, keeping a stop loss above 160.

Shankara Building Products: Buy| LTP: Rs 521| Target: Rs 600| Stop loss: Rs 520| Upside: 15 percent

On the daily chart, Shankara Building Products has broken out from an Ascending Triangle triggering bullish trend in the stock.

Further, the breakout was backed by high volumes confirming the strength in the breakout. The RSI has also turned higher after making a positive divergence suggesting higher levels.

The stock may be bought in the range of Rs 560-565 for targets of Rs 600-635, keeping a stop loss below 520.

Nestle India: Buy| LTP: Rs 11,147| Target: Rs 11,850| Stop loss: Rs 10,600| Upside: 11 percent

On the daily chart, Nestle India is approaching the upper end of the Ascending Triangle pattern placed at Rs 11,190. A sustained trade beyond this neckline can take the stock higher to Rs 11,600.

On the weekly time frame, it has turned upwards after taking support at the 61.8 percent Fibonacci retracement confirming that the bullishness is intact in the stock.

Further, RSI has turned north after taking support at the 40-level suggesting that there are more legs to this rally following the bullish breakout. The stock may be bought in the range of Rs 11,000-11,050 for targets of Rs 11,500-11,850, keeping a stop loss above Rs 10,600.

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Stock Market News - Adani port gains 3%, Music Broadcast Jumps

Adani Ports gains 3% -  

Shares of Adani Ports and Special Economic Zone gained 3.6 percent in the early trade on May 28 after the company posted strong numbers for the quarter ended March 2019.

Yes Bank, Gail India, Adani Port, Zee Entertainment, Coal India, Asian Paints, SBI and Kotak Mahindra Bank are some of the major gainers in the early trade, while losers are Emami, HPCL and IOC. Among sectors, FMCG and PSU bank index is under pressure, while buying seen in the metal, auto, infra, and pharma.

Rupee Opens: 

The Indian rupee slipped in the early trade on Tuesday. It has opened lower by 15 paise at 69.65 per dollar on Tuesday versus previous close 69.50.

Music Broadcast Jumps - 

 On Acquisition Plans Shares of the Radio City FM channel operator in India rose as much as 6.2 percent to Rs 62.50. The company board approved the acquisition of the entire stake of Reliance Broadcast Network (Big FM) for Rs 1,050 crore, according to its stock exchange filing. 

Shares of Manpasand Beverages -

 hit the lower circuit of 20 percent for the second consecutive trading session. The company canceled its board meeting scheduled on May 28. Milind Babar resigned from the post of director with effect from May 27, due to the media statement issued by the GST Department.

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Commodity Outlook: How oil, gold, agri commodities may trade in Monday’s session

Gold prices climbed in futures trade on Monday, supported by pick in demand by jewellers at spot markets and favorable global sentiment.

In international markets, gold prices rose as fears of a protracted US-China trade war hurt risk sentiment, while poor economic data from the United States bolstered bets of a Us Federal Reserve rate cut, Reuters reported.

Oil prices, on the other hand, were under pressure, tracking the fall in the commodity’s prices in the international markets on concerns that the US-China trade war could trigger a broad economic slowdown.

The MCX Gold was trading at Rs 31,647 per 10 grams, up by Rs 117 around 10:45 am. The MCX Crude oil was trading at Rs 4,065 per barrel, down Rs 6 at that time.

Here is a quick check on projections of various commodities by brokerage SMC Global Securities.

Bullion: Bullion counter will trade with an upside bias, the brokerage said. MCX Gold may test Rs 31,700, taking support near Rs 31,400. MCX Silver can test Rs 36,550, taking support near Rs 36,100.

Base metals: Base metals may trade with a positive bias as industrial metals on the Shanghai Futures Exchange rose on Monday. Copper may recover towards Rs 420 on MCX. Zinc can test Rs 216, taking support near Rs 212. Lead may test Rs 128, taking support near Rs 125. Nickel may test Rs 880, taking support near Rs 850. Aluminium prices may test Rs 148, taking support near Rs 146.

Energy: Crude oil may witness some short covering at lower levels. MCX Crude oil may test Rs 4,100, taking support near Rs 4,020. Natural gas may test Rs 184, taking support near Rs 178.

Spices: Turmeric futures (June) is expected to trade with an upside bias in the range of Rs 6,950-7,100 levels, taking positive cues from the spot markets. Jeera futures (June) will probably maintain its positivity and trade in the range of Rs 17,550-17,850. Cardamom futures (June) has resistance near Rs 2,325-2,360. Coriander futures (June) is expected to take support near Rs 7,450.

Oilseeds: Soybean futures (June) is expected to test Rs 3,760 on the higher side, taking support near Rs 3,710. Soy oil futures (June) may move towards Rs 748-750. CPO futures (June) is expected to descend further towards Rs 500 if it breaks Rs 510. Mustard futures (June) is bullish and it has the potential to test Rs 3,960, hence lower level buying is recommended, the brokerage said.

Other commodities: Cotton futures (June) is likely to remain trapped in the range of Rs 21,400-21,700 level. Guar seed futures (June) might remain stable in the range of Rs 4,385-4,450. Guar gum futures (June) may consolidate in the range of Rs 8,800-8,920 with upside capped.

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