KEY HIGHLIGHTS
Closing Bell: Second Day Of Gains
Indian equity markets ended higher for the second straight day, with gains led by Auto, Pharma and real estate stocks.
The S&P BSE Sensex ended 0.66% higher at 39,302 while the NSE Nifty 50 gained 0.7% to end at 11,604. Both Sensex and Nifty ended at the highest level in nearly three weeks.
Among the sectoral indices, the Nifty Bank recovered 350 points from the day's low to end with gains of 0.5%.
The Nifty Realty index was the top sectoral gainer, ending with gains of 2.3% while a late surge in Dr Reddy's Laboratories, led the Nifty Pharma index to end with gains of 2%. Dr Reddy's was also the top gainer on the Nifty 50 index.
Among other sectors that did well was auto. The Auto index, though off the day's high, ended with gains of 1.5%.
Media and PSU Banking stocks were the only laggards in today's session with their respective indices ending 1.6% and 0.5% lower respectively.
Broader markets were subdued in today's session after two days of outperformance. The midcap index ended 0.3% higher while the Smallcap index was flat.
India Volatility Index ended 4.7% lower, below the mark of 20, at 19.62.
Market breadth remained in favour of the gainers. 957 stocks on the NSE ended with gains while 838 declined.
How Did The Sectoral Indices Fare
Buzzing Stock: Lincoln Pharma
- Trades at the highest level since November 2018
- Gains as much as 10.7% to Rs 260.8
- Biggest single-day gain since September 2019
- Up for the third straight day
- Has gained 12% in the last three trading sessions
- Today's volumes are 38% higher than its 20-day average
- Stock nearing overbought territory with Relative Strength Index (RSI) at 66
- Has more than tripled from its 52-week low of Rs 85 on March 19, 2020
- The stock has gained 63% this year
Stock Reaction: Dr Reddy's Laboratories
The drugmaker informed the exchanges that it will co-operate with the Russian Direct Investment Fund (RDIF), Russia's sovereign wealth fund on clinical trials and distribution of the Sputnik V vaccine in India.
RDIF will supply 100 million doses of the vaccine to the company, the exchange filing said.
Deliveries of the vaccine can potentially begin in late 2020, subject to completion of successful trials and registration of the vaccine by regulatory authorities in India.
"We will be conducting Phase-III trials in India, to ensure safety and efficacy for the Indian population and to meet the demand of the regulators," GV Prasad, Co-Chairman and Managing Director of Dr Reddy's was quoted as saying.
Shares gained as much as 4.5% to Rs 4,640. The stock is up for the second straight day and is trading at the highest level in a month.
Chemcon Specialty Chemicals IPO
The chemicals company based in Vadodara in Gujarat plans to raise Rs 320 crore through its IPO, Bloomberg reports citing an advertisement in a newspaper.
The company has set the price band for its IPO at Rs 338-340 per share. The founders of the company will sell as many as 45 lakh shares in an Offer for Sale as part of the IPO.
Investors can bid for a minimum of 44 shares of face of Rs 10 in the IPO. The issue opens on September 21 and closes on September 23.
Intensive Fiscal Services and Ambit Capital are managing the sale.
Buzzing Stock: Birlasoft
- Trading at an all-time high
- Gains as much as 9.2% to Rs 195.6
- Has gained in four out of the last five trading sessions
- Up 18% in the last five trading sessions
- Today's volumes are 48% higher than its 20-day average
- Stock enters overbought territory with Relative Strength Index (RSI) at 70.5
- Has quadrupled from its 52-week low of Rs 46.7 on March 24, 2020
- All five analysts tracking the stock have a buy recommendation
- The stock trades 8.3% higher than its 12-month consensus price target of Rs 178, implying a negative return potential
Active Stock Options
- Reliance Industries' 2,400 Call: Premium up 17.3% to Rs 32.9. The contract has added 907 shares in Open Interest.
- Bajaj Finance's 3,600 Call: Premium unchanged at Rs 70. The contract has added 236 shares in Open Interest.
- HDFC Bank's 1,100 Call: Premium up 24.5% at Rs 18.3. The contract has shed 321 shares in Open Interest.
Earnings Reaction: Sterling & Wilson Solar Q1FY21
- Revenue down 14% to Rs 1,068 crore
- Net profit down 66% to Rs 16.4 crore
- Ebitda down 75% to Rs 16.7 crore
- Ebitda margin at 1.6% from 5.3%
- Order inflow during the quarter at 1 GW, which is 40% of FY20 order inflow
- Current year order booking to date is Rs 5,696 crore as compared to Rs 828 crore during the same period last year.
- Currently operating at efficiencies of 80-85% which will be gradually ramped-up to 100%
- H2FY21 will transform the overall financial outlook for the year, leading to an anticipated revenue growth compared to last year.
- European market has grown substantially and has excellent growth potential
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 3.9% to Rs 244.65, post the announcement.
Stock Reaction: Aurionpro Solutions
The technology solutions provider has announced that it has won a strategic order from one of the largest state-run company, the company said.
The order is for the installation, implementation and maintenance of the smart surveillance system for the government agencies.
The order is d at more than Rs 25 crore, includes implementation of the system within 10 months, followed by maintenance and support of up to five years.
Shares gained as much as 6.7% to Rs 68.75, post the announcement. The stock is up for the third straight day.
Markets At 2:10 P.M.
- Benchmark indices trade near the day's high
- Nifty up 0.47% at 11,575
- Sensex up 0.5% at 39,222
- Nifty Bank unchanged at 22,465
- Nifty Midcap index up 0.1%
- Nifty Smallcap index down 0.3%
- India Volatility Index down 2.5% to 20.1
- Nifty Auto remains the top sectoral gainer; up 1.8%
- Nifty Realty is the other sectoral gainer; up 1.5%
- Nifty Media remains the top sectoral laggard; down 1.6%
- PSU Bank index is the other sectoral laggard; down 1%
- Mahindra & Mahindra remains the top Nifty gainer; up 4.6%
- Top three gainers on the Nifty remain auto stocks
- NTPC is the top Nifty laggard; down 1.7%
- 924 stocks on the NSE trade with gains while 838 decline
Money Market Update
The currency ended with gains in today's session, after recovering nearly 30 paise from the day's low.
The rupee ended at 73.52 against the U.S. Dollar, as compared to Tuesday's close of 73.64.
It staged a 25 paise recovery from the day's low of 73.77. Sentiment was also boosted by comments from the RBI Governor Shaktikanta Das that the RBI will ensure that no large shadow banks fail.
Despite the gains today, seven other currencies managed to outperform the rupee.
Yield on the 10-year government bond ended at 5.993% as compared to Tuesday's close of 6.03%.
Shadow Banks Ride Out Of The Crisis
The health of India's shadow banks remained resilient in August, suggesting that the record stimulus steps by the nation's authorities are helping the crisis-hit sector during the pandemic, Bloomberg News reports.
Premiums on the bonds of non-bank lenders narrowed to a two-year low, according to an index of AAA rated five-year notes.
Three other indicators compiled by Bloomberg, covering areas such as liquidity and share performance was steady as compared to the previous month.
The Reserve Bank of India is monitoring the country's 100 Non-bank lenders 'rigorously' to avoid another crisis, Governor Shaktikanta Das said on Wednesday, adding that the regulator will ensure no major shadow lender will fail.
Earnings Reaction: ITD Cementation Q1FY21
- Revenue down 43.3% to Rs 399.4
- Net loss of Rs 17 crore from net profit of Rs 16.7 crore
- Ebitda down 60.3% to Rs 29.6 crore
- Ebitda margin at 7.4% from 10.6%
- Limited availability of workforce and disrupted supply chain
- Actual impact of Covid-19 on the group remains uncertain
- All numbers are consolidated and compared on a year-on-year basis
Shares fell as much as 5.8% to Rs 52.2, snapping a four-day gaining streak.
No Gainers On The PSU Bank Index
European Markets Open Higher
Benchmark indices in Europe have opened mixed and are aiming for a fresh two-week high.
The Stoxx 600 index has opened 0.2% higher led by gains in retail and technology stocks. Mining stocks are the top laggards.
Asian markets have ended flat ahead of the FOMC meet later tonight, while futures on the Dow Jones are trading higher by 70 points.
Brent crude is trading 1.9% higher at $41.3 per barrel while Gold trades at $1,963,9/Oz, up 0.5%.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 up 0.1% at 3,334
- DAX up 0.1% at 13,226
- CAC unchanged at 5,069
- FTSE 100 down 0.4% at 6,082
- IBEX 35 up 0.3% at 7,053
How Are The Sectoral Indices Faring
Buzzing Stock: Indostar Capital Finance
- Top gainer on the Nifty 500 index
- Gains as much as 10.6% to Rs 287.7
- Biggest single-day gain in three weeks
- Has gained in four out of the last five trading sessions
- Today's volumes are double its 20-day average
- Breaks above its 50 and 100-Day Moving Average at 265 and 271 respectively
- Has gained 72% from its 52-week low of Rs 166 on December 10, 2019 but remains 13% below its 52-week high of Rs 331.2 on August 26, 2020
- Two out of the six analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 16.1% higher than its 12-month consensus price target of Rs 239, implying a negative return potential
Markets At 12:20 P.M.
- Benchmark indices continue to remain rangebound
- Nifty up 0.3% at 11,555
- Sensex up 0.2% at 39,134
- Nifty Bank down 0.7% at 22,318
- Nifty Midcap index up 0.2%
- Nifty Smallcap index down 0.2%
- India Volatility Index down 1.2% at 20.36
- Nifty Auto remains the top sectoral gainer; up 1.8%
- Nifty Pharma is the other major sectoral gainer; up 1.1%
- Nifty Media is the top sectoral laggard; down 1.4%
- Nifty PSU Bank is the other major sectoral laggard; down 1.1%
- Mahindra & Mahindra is the top Nifty gainer; up 5.2%
- IndusInd Bank is the top Nifty laggard; down 2.2%
- 910 stocks on the NSE trade with gains while 827 decline
Gold In Wait-and-See Mode
Gold steadied as investors await the outcome of a key Federal Reserve meeting to gauge whether the U.S. central bank will extend more support to bolster the economic recovery and for any clues on how policy makers will approach their new target of delivering average inflation.
- Spot gold +0.3% to $1,959.61/oz; -0.1% on Tuesday; +29% YTD
- Spot silver +0.4% to $27.2385/oz
- Platinum +0.2%; palladium -0.8%
- The Bloomberg Dollar Spot Index little changed
Large Trade Alerts
- Infosys: 10.2 lakh shares of the I.T. major exchanged hands in a single large trade on the National Stock Exchange. The deal amounts to Rs 100 crore.
- Tata Motors: 10.4 lakh shares worth Rs 16 crore exchanged hands in a single large trade.
- Embassy Office Parks REIT: Over 25 lakh units exchanged hands in two large trades. The first trade saw 16.28 lakh units worth Rs 59 crore exchange hands while the second trade saw 10.46 lakh units worth Rs 37.97 crore exchange hands.
- Jindal Steel: Around 23 lakh shares changed hands in a single trade.
Buyers and sellers in all the trades remain unknown as per Bloomberg data.
Auto Index Is The Top Sectoral Gainer
Vedanta Wins Case Against The Government
A three-judge Superme Court Panel headed by Justice S Abdul Nazeer, rejected the government's petition challenging enforcement of the award in Vedanta's favour.
The government had claimed that Vedanta cannot recover more than $198.5 million, for the development of oil and gas fields in Rajasthan.
The court said that enforcement of the award in favour of Vedanta will not be contrary to India's public policy, as claimed by the government. It also said that an Indian court cannot re-examine evidence recorded by a foreign arbitration tribunal.
Shares fell from the day's high, after gaining as much as 2.2% to Rs 134.5, post the announcement.
Source: Bloomberg
Buzzing Stock: Kaveri Seed
- Top gainer on the Nifty Smallcap index
- Gains as much as 6% to Rs 583
- Biggest single-day gain in nearly a month
- Up for the third straight day
- Has gained 11% in the last three trading sessions
- Longest winning streak in two months
- Today's volumes are more than double its 20-day average
- Nearing its 50-Day Moving Average of 594.3
- Has more than doubled from its 52-week low of Rs 273.7, on March 24, 2020, but remains 14.5% below its 52-week high of Rs 682.5 on August 7, 2020
- Eight out of the 10 analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential of the stock as per Bloomberg data is 25.5%
Stock Reaction: Lakshmi Vilas Bank
The lender informed the exchanges on Tuesday that the mutual due diligence between the bank and Clix group is substantially complete and that the parties are in discussion on the next steps.
The bank in June had signed a preliminary, non-binding Letter of Intent (LoI) with Clix Capital and Clix Finance with respect to the proposed amalgamation of the Clix Group with the bank.
The exclusivity period between both the parties was extended to September 15, due to the prevailing pandemic situation.
Shares are locked in an upper circuit of 10% at Rs 22.4. The stock has snapped a two-day losing streak, and is trading at the highest level in two months.
Markets At 10:20 A.M.
- Benchmark indices in a range in the first hour of trade
- Nifty up 0.2% at 11,544
- Sensex up 0.2% at 39,112
- Nifty Bank down 0.1% at 22,438
- Nifty Midcap index up 0.4%
- Nifty Smallcap index down 0.2%
- India Volatility Index down 0.8% at 20.44
- Nifty Auto is the top sectoral gainer; up 2.2%
- Nifty Media is the top sectoral laggard; down 1.2%
- Most other sectoral indices trade flat
- Mahindra & Mahindra is the top Nifty gainer; up 5.1%
- Top three gainers on the Nifty 50 index are auto stocks
- Asian Paints is the top Nifty laggard; down 1.1%
- 1,025 stocks on the NSE trade with gains while 644 decline
Stock Reaction: Divi's Laboratories
The company has issued a clarification over various media reports doing the rounds that it intends to acquire stake in SMS Pharmaceuticals.
The drugmaker has denied the news, stating that neither the company, nor its promoters have any intentions, plans, or held any discussions to acquire any stake in SMS Pharma or any of its group companies.
"The company has always been relying on organic growth," it said in an exchange filing.
Shares of Divi's Labs trade little changed, up 0.3% at Rs 3,195 post the announcement. The stock is up for the third straight day.
On the other hand, shares of SMS Pharma have halved from the day's high gains of 12.3%. The stock now trades 6% higher at Rs 94.4, and is up for the fourth straight day.
Money Market Update
The currency opened little changed today after ending as the worst performer in Asia on Tuesday.
The rupee opened at 73.68 against the U.S. Dollar as compared to Tuesday's close of 73.64.
India's trade deficit widened to $6.8 billion in August, led by higher imports of Gold.
Yield on the 10-year government bond opened at 6.027% as compared to Tuesday's close of 6.032%.
Bond market traders will watch out for the sale of treasury bills worth Rs 35,000 crore.
Reserve Bank of India governor Shaktikanta Das will also be addressing the FICCI National Executive Committee Meeting at 11 a.m. today.
Earnings Reaction: Proctor & Gamble Health
- Revenue down 13.9% to Rs 201.2 crore
- Net profit up 11% to Rs 48.9 crore
- Net profit aided by a tax reversal of Rs 8 crore in the current quarter
- Ebitda down 2.6% to Rs 53.1 crore
- Ebitda margin at 26.4% from 23.3%
- Declared final dividend of Rs 230 per share, including a one-time special dividend of Rs 188 per share
- Had strong double-digit growth for four straight quarters until the onset of the pandemic.
- Performance driven by sales growth coupled with strategic choices in managing opex during the quarters impacted by Covid-19
- All numbers are consolidated and compared on a year-on-year basis
Shares fell as much as 4.2% to Rs 5,410, snapping a two-day gaining streak. The stock had gained 7% each during Monday and Tuesday's trading sessions.
Earnings Reaction: VA Tech Wabag Q1FY21
- Revenue down 5.6% to Rs 430.9 crore
- Net profit up 96.2% to Rs 5.1 crore
- Ebitda down 22.7% to Rs 29 crore
- Ebitda margin at 6.7% from 8.2%
- Lower taxes in the current quarter contribute to profit
- Tax incidence this quarter at 22.6% as compared to 90% in the base quarter
- Order book, including framework orders at Rs 11,100 crore
- Order intake of Rs 440 crore
- EPC revenue deferred on account of slower project progress due to lockdowns
- O&M continued to operate at full capacity
- Revenues have started to pick-up as progress seen on new projects in order book
- O&M business contributed 77% to overall revenue
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 3.2% to Rs 214. The stock is up for the third straight day.
Coronavirus India Update
- Total confirmed cases in India cross the 5 million mark
- 90,123 cases reported in the last 24 hours
- Total confirmed cases now at 50,20,359
- Active cases now at 9,95,933
- Patients cured / discharged / migrated at 39,42,360
- Death toll rises to 82,066
- 1,290 deaths reported in the last 24 hours
- 82,961 patients recovered in the last 24 hours
Stock Reaction: Sterlite Tech
The company on Tuesday announced a partnership with Bharti Airtel, to build a modern optical fibre network for the telecom operator across 10 telecom circles.
The densly fiberised, future-ready network will also form the foundation for many next-generation services like 5G, IoT and Industry 4.0, the company said in an exchange filing.
"Sterlite Tech, with its diverse capabilities across all network layers, is uniquely positioned to deliver significant for digital service providers," KS Rao, CEO of Network Services and Software at Sterlite Technologies was quoted as saying.
Shares gained as much as 5.5% to Rs 165.95 and are up for the third straight day.
Opening Bell: A Quiet Start
Indian equity markets opened flat, in-line with the sentiment across global markets as investors look forward to commentary from the U.S. Federal Reserve.
The S&P BSE Sensex opened 0.3% higher at 39,161 while the NSE Nifty 50 gained 0.1% at the start of trade to 11,538.
All sectoral indices have opened flat. The Nifty Media and Nifty Pharma index have opened with gains of 0.5% while the Realty and Auto indices are up 0.3% in the early minutes of trade.
Broader markets have opened in-line with the benchmarks. The midcap index has gained 0.3% while the smallcap index opened 0.5% higher.
Market breadth is in favour of the gainers. 1,065 stocks on the NSE have opened with gains while 370 are declining.
Trading Ideas For The Day
- Nifty: Sell 11,450 Put for the September 17 expiry in the range of Rs 37-39. Target of Rs 23-14 and stop loss of Rs 53.
- Nifty Bank: Buy in the range of 22,500-22,600 for target of 22,800-22,900 and stop loss of 22,400
- Buy IndusInd Bank September futures for target of Rs 652 and Rs 669 with a stop loss of Rs 629.8
- Sell Maruti September futures between Rs 7,095 and Rs 7,100 for target of Rs 7,007 and Rs 6,872 with a stop loss of Rs 7,187
Source: ICICI Securities
How Did The Fund Flows Fare On Tuesday
Key Stocks In Focus
- Piramal Enterprises: Bloomberg News reports that Blackstone Group & Partners Group Holding are the only two remaining bidders vying for a controlling stake in the company's glass unit - Piramal Glass. The company is seeking a valuation of $1 billion for the unit.
- Indiabulls Housing Finance: Board approved allotment of 3.48 crore equity shares to qualified institutional buyers at an issue price of Rs 196.37 per share. Key allottees include HSBC, Tosca Group, Nomura, Think India Opportunities Master Fun, TIMF Holdings and Societe Generale.
- SpiceJet: Continues to maintain market share of 16%. Restructuring aircraft leases and early return of aircraft, thereby having long-term savings impact on costs. Likely return of Boeing 737 Max to service by Q4FY21 to boost operations. The airline also stated that Boeing has offered more compensation than it has recognised.
- InterGlobe Aviation: Civil Aviation Minister Hardeep Singh Puri stated that the company has modified engines in all of its 134 A320/321 aircrafts with Pratt and Whitney turbines.
- Aurobindo Pharma: Announced a collaboration with the Council of Scientific and Industrial Research to develop vaccines against Covid-19. The company will undertake clinical development and commercialisation of the vaccines.
- Hexaware Tech: Board has extended bid closing date for the company’s delisting to September 16.
- IRB Infra: Arm has executed concession agreement with NHAI for an expressway project in Gujarat for a bid cost of Rs 1,724 crore.
- Lakshmi Vilas Bank: Mutual due diligence with Clix group and the bank is completed.
To know more about earnings reported after market hours, key brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Gearing Up For Today's Trade
Good Morning!
Banking stocks, which caused the indices to end with losses on Monday, were instrumental in the benchmarks ending close to the day's high on Tuesday. The Sensex and Nifty 50 gained over 0.7% each, led by bank and pharma stocks.
But the Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.2% to 11,512 as of 8:05 a.m. on Wednesday.
Aviation stocks will be focus after comments from the civil aviation minister. SpiceJet may react to its June quarter results.
The street will also watch out for stocks like ITD Cementation, Future Enterprises, P&G Health, and VA Tech Wabag that reported their financials after market hours.
Asian markets are little changed as investors await the meeting of the U.S. Federal Reserve to gauge the extent of central bank support.
Benchmark indices in Japan and South Korea are flat, while those in Hong Kong and Australia trade with a positive bias.
Futures on the Dow Jones are trading with gains of 40 points. The index ended little changed on Tuesday.
West Texas Intermediate crude rose 0.7% to $38.53 per barrel, while gold was flat at $1,952.7/Oz.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
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