KEY HIGHLIGHTS
Closing Bell: Second Day Of Gains
Indian equity markets ended higher for the second straight day, led by a swift recovery in the banking index towards the final minutes of trade.
The S&P BSE Sensex ended 0.5% higher at 39,086 while the NSE Nifty 05 index ended 0.56% higher at 11,535. Both indices traded in a narrow range throughout the session.
Among sectoral indices, the Nifty bank recovered 400 points from the lowest point of the day to end 0.3% higher. The index was trading with losses of over 1% at one point.
Among the gainers, the Media index was the outperformer, ending 3.5% higher, led by gains in Zee Entertainment.
The Nifty I.T. and Nifty Metal indices ended with gains of over 1.5% each, with all constituents of the I.T. index advancing in today's session.
PSU Bank index too recovered from the lowest point of the day to end 0.2% lower. The index was down close to 2% during the day.
Broader markets outperformed in today's session. The midcap and smallcap index ended with gains of over 1.5% each.
The India Volatlity Index ended 3.5% lower at 21.03.
Market breadth remained in favour of the gainers. 1,210 stocks on the NSE ended with gains while 616 declined.
How Did The Sectoral Indices Fare
Stock Reaction: Lupin
The drugmaker informed the exchanges that it has launched Leflunomide tablets 10 mg and 20 mg, after receiving approval from the U.S. FDA.
The product will be manufactured at the company's Pithampur facility, the exchange filing stated.
The drug is used in the treatment of adults with rheumatoid arthritis.
The Leflunomide tablets had annual sales of nearly $42 million in the U.S. as per IQVIA data for the 12-months ending June 2020.
Shares gained as much as 1.6% to Rs 964.8 and are up for the second straight day.
All Stocks On The I.T. Index Gain
Buzzing Stock; Whirlpool
- Among best performers on the Nifty Midcap index
- Gains as much as 4.6% to Rs 2,203.5
- Snaps four-day losing streak
- Today's volumes are 36% below its 20-day average
- Breaks above 200 and 50-Day Moving Average at 2,133 and 2,140 respectively
- Has recovered 64% from its 52-week low of Rs 1,343 on March 24, 2020
- Four out of the 12 analysts tracking the stock have a buy recommendation; 6 sell calls
- The stock trades 14% higher than its 12-month consensus price target of Rs 1,861, implying a negative return potential
Active Stock Options
- ICICI Bank's 400 Call: Premium down 4.5% to Rs 13.75. The contract has added 1,031 shares in Open Interest.
- Bharti Airtel's 560 Call: Premium up 2.5% to Rs 18.75. The contract has added 86 shares in Open Interest.
- Axis Bank's 500 Call: Premium down 11.6% to Rs 16.8. The contract has added 377 shares in Open Interest.
Stock Reaction: NCC
The construction company informed the exchanges that it won six new orders in the month of August worth Rs 1,548 crore.
Out of the six new orders, one order worth Rs 959 crore pertains to the water division and the second order worth Rs 262 crore pertains to the building division, the company said in an exchange filing.
The four remaining orders pertain to the electrical division and are worth Rs 327 crore.
The orders won are from state government agencies and do not include any internal orders, the company said.
Shares gained as much as 3.6% to Rs 34.9, post the announcement. The stock snapped a two-day losing streak.
PSU Bank Index Is The Top Sectoral Laggard
Markets At 2:20 P.M.
- Benchmark indices continue to fluctuate between gains and losses
- Nifty up 0.3% at 11,503
- Sensex up 0.2% at 38,984
- Nifty Bank down 0.3% at 23,736
- Nifty Midcap index up 0.6%
- Nifty Smallcap index up 1%
- India Volatility index up 0.3% to 21.87
- Nifty Media remains the top sectoral gainer; up 1.9%
- Nifty I.T. is the other major sectoral gainer; up 1.3%
- Nifty PSU Bank index is the top sectoral laggard; down 1.4%
- Zee Entertainment remains the top Nifty gainer; up 5.7%
- Bajaj Auto remains the top Nifty laggard; down 3.2%
- 1,052 stocks on the NSE trade with gains while 708 decline
Earnings Reaction: Jubilant Foodworks Q1FY21
- Revenue down 59% to Rs 388.4 crore
- Net loss of Rs Rs 74.5 crore from net profit of Rs 71.5 crore
- Ebitda down 89% to Rs 24.6 crore
- Ebitda margin at 6.3% from 23%
- All numbers are consolidated and compared on a year-on-year basis
Management Commentary:
- Same Store Sales decline of 61.4% during the quarter
- Opened 24 new stores and added six new cities
- Strong system sales recovery in July and August at 69.8% and 84.6% respectively
- Delivery and takeaway channels recovered fully by August to deliver a year-on-year growth
- Delivery channel saw growth of 110.9% like-for-like while takeaway saw 161% growth
- Strong cash position and debt-free balance sheet
Shares recovered from the day's low to gain as much as 3.3% to Rs 2,219 post the announcement. The stock trades at an all-time high.
Money Market Update
The currency ended with modest losses in today's session after ending at a six-month high on Tuesday.
The rupee ended at 73.03 against the U.S. Dollar as compared to Tuesday's close of 72.87.
Today's trade saw rupee end as the third worst performing currency in Asia.
Yield on the 10-year government bond ended at 5.919% as compared to Tuesday's close of 5.942%.
Buzzing Stock: United Breweries
- Among top performers on the Nifty 500 index
- Gains as much as 9.3% to Rs 1,096
- Biggest single-day gain since April 2015
- Trading at the highest level in five months
- Snaps a five-day losing streak
- Today's volumes are quadruple its 20-day average
- Breaks above its 200-Day Moving Average at 1,088
- Has gained 45% from its 52-week low of Rs 749 on March 19, 2020 but remains 22% below its 52-week high of Rs 1,396 on September 23, 2019
- Brokerage firm Emkay added it to its high-conviction large-cap Overweight portfolio
- Stock offers long-term growth opportunity in beer segment and is best placed to emerge stronger post the crisis and gain from a weaker competition, as per Emkay in its note
- 10 out of the 13 analysts tracking the stock have a buy recommendation; 3 sell calls
- The stock trades at its 12-month consensus price target level of Rs 1,087
Axis, SBI Lead Losses On The Nifty Bank
Buzzing Stock: Godrej Industries
- Trades at the highest level since August 2019
- Gains as much as 4.3% to Rs 470.8
- Biggest single-day gain in three weeks
- Up for the second straight day
- Has gained in six out of the last seven trading sessions
- Up 14% in the last seven trading sessions
- Today's volumes are 34% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 79
- Has doubled from its 52-week low of Rs 233 on May 7, 2020
- Return potential on the stock as per Bloomberg data is 7.2%
Gautam Adani On Mumbai Airport Acquisition
European Markets Open Higher
Benchmark indices in Europe opened higher and are poised to snap their longest losing streak since June.
The Stoxx 600 index has opened 0.6% higher with all sectors opening in the green. Miners and retail were the top gainers while F&B along with insurance stocks dragged.
Asian markets have ended mixed while futures on the Dow Jones are trading higher by over 110 points.
Brent crude is trading 1% higher at $46 per barrel while Gold is 0.5% lower at $1,960.5/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 up 0.5% at 3,294
- DAX up 0.7% at 13,067
- CAC up 0.44% at 4,959
- FTSE 100 up 0.6% at 5,894
- IBEX 35 up 0.3% at 6,983
How Are The Sectoral Indices Faring
Stock Reaction: Cosmo Films
The company informed the exchanges on Tuesday that the board has approved resuming further investment into the new line for specialised BOPET film.
The line will be commissioned at the company's Aurangabad plant with a capacity of 30,000 MT per annum, the company said in an exchange filing.
The new production line is likely to complement the existing BOPP capacity of 2,00,000 MT per anum.
The cost of the project is estimated to be Rs 300 crore which will be financed through internal accruals and loans.
"The debt-Ebitda and other financial ratios are likely to remain in a comfortable range even post the capex," CEO Pankaj Poddar was quoted as saying.
Shares gained as much as 5.9% to Rs 402, snapping a three-day losing streak.
Earnings Reaction: Shalimar Paints Q1FY21
- Revenue down 48% to Rs 44.5 crore
- Net loss widens to Rs 14.8 crore from Rs 6.1 crore
- Ebitda loss of Rs 5.3 crore from Ebitda gain of Rs 0.1 crore
- Operations were significantly impacted due to Covid-19
- Residential business has managed to recover faster as compared to industrials
- Reduction in sales revenue significantly impacted bottomline
- All numbers are standalone and compared on a year-on-year basis
Shares gained as much as 7.22% to Rs 73.5, snapping a four-day losing streak.
Government Mulls Share Sale In IDBI Bank
The government is planning an Offer for Sale of IDBI Bank's shares, people with knowledge of the matter told Bloomberg News.
The proposal is to sell shares worth Rs 7,500 crore or $1 billion, sources said.
Other than the government, state-run Life Insurance Corporation, which has a majority stake in the lender will also sell some of its stake in the offering.
The plan will help improve the bank's public shareholding before another attempt to offer a majority stake to a strategic partner, the source said.
A Finance Ministry spokesperson was not available for a comment.
Shares gave up gains of as much as 6% to now trade 1.3% higher at Rs 39.35.
Markets At Noon
- Benchmark indices trade little changed
- Nifty unchanged at 11,476
- Sensex unchanged at 38,898
- Nifty Bank down 0.8% at 23,618
- Nifty Midcap index up 0.3%
- Nifty Smallcap index up 1%
- India Volatility Index up 0.8% to 21.97
- Nifty Media is now the top sectoral gainer; up 1.5%
- Nifty PSU Bank is the top sectoral laggard; down 1.5%
- Nifty I.T. and Nifty Metal gain over 0.5% each
- Zee Entertainment is the top gainer on the Nifty; up 4.5%
- Bajaj Auto is the top laggard on the Nifty; down 3.1%
- 1,051 stocks on the NSE trade with gains while 653 decline
Brokerage Reaction: Karur Vysya Bank
Shares of the mid-sized private lender are rising in today's trade after Kotak Institutional Equities maintained its buy rating on the stock after a conversation with its new MD & CEO Ramesh Babu Boddu.
Kotak Institutional Equities' Rationale:
- Greater emphasis on risk-adjusted growth and execution
- Strengthen liability profile and improve productivity
- Early readings on asset quality suggest negligible fresh surprises
- Course correction strategy is already in place
- Clarity yet to emerge on drivers of profitability
- Execution remains key focus area
- Most of the underlying concerns are getting gradually addressed
- Settling of issues may lead to re-rating of the bank
Kotak Institutional Equities has maintained its price target on the stock at Rs 65. Shares gained as much as 6.1% to Rs 40.7 and are up for the second straight day. The stock is among the top performers on the Nifty Smallcap index.
Stock Reaction: Coal India
The state-run miner reported its first rise in monthly shipments in six months. Offtake for the month of August rose 9.3% year-on-year to 44.34 MT. This was the first rise in offtake since February.
In other news, Coal Minister Prahlad Joshi said that the company will invest over Rs 1 lakh crore in various projects pertaining to coal evacuation, development, exploration and clean coal technologies by 2023-24.
Shares gained as much as 3% to Rs 137.5. The stock has snapped a four-day losing streak and is among the top performers on the Nifty 50 index.
Earnings Reaction: Anant Raj Q1FY21
- Revenue flat at Rs 81.7 crore
- Net profit down 9% to Rs 10.5 crore
- Ebitda up 3% to Rs 20.9 crore
- Ebitda margin at 25.6% from 24.8%
- All numbers are standalone and compared on a year-on-year basis
Shares gained as much as 9.1% to Rs 32.9, snapping a four-day losing streak.
Deutsche Bank Finds Market Valuations Expensive
The 50% jump in the Nifty 50 since its March low amid a 22% decline in earnings estimate has resulted in the index's PE ratio for FY21 climbing to nearly 24 times, Deutsche Bank wrote in a note.
"This is a 10-year high and certainly rings a cautiounary bell for investors in the short-term," analysts wrote in a note accessed by Bloomberg News.
The note further stated that liquidity-driven markets seem to be largely ignoring fundamentals. "The market seems to be ignoring the current financial year as a blip in the long-term and are looking at FY22 where the PE looks more reasonable at 17 times," the analysts said.
Deutsche Bank said that valuations are high and not supportive. Any corrections will provide opportunities to enter.
Brokerage Reaction: SBI Life Insurance
Shares of the life insurance company are trading with gains in today's session after brokerage firm Motilal Oswal initiated coverage on the stock with a buy rating.
Motilal Oswal’s Rationale:
- Well placed to sail through challenges
- Market share gains to continue
- Banca channel provides strong distinct competitive advantage
- Uniquely placed to uphold leadership positions with best in-class cost ratios
- Expect 17% VNB CAGR over FY20-23E
- In a sweet spot given strong distribution network, cost leadership and access to its parent SBI's large customer base
- Expect operating RoEV to normalise towards 18% going ahead
Motilal Oswal has pegged a price target of Rs 1,000 on the stock, implying a 20% upside from Tuesday's closing levels.
Buzzing Stock: CDSL
- Top gainer on the Nifty 500 index
- Trades at an all-time high
- Gains as much as 10.5% to Rs 451.9
- Biggest single-day gain in eight months
- Up for the second straight day
- Has gained in eight out of the last nine trading sessions
- Up 20% in the last nine trading sessions
- Today's volumes are six times higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 78
- Has gained over two and a half times from its 52-week low of Rs 179.8 on March 23, 2020
- 1 out of the five analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 22.4% higher than its 12-month consensus price target of Rs 348.8, implying a negative return potential
Auto Sales Reaction: Hero MotoCorp
- Overall sales up 7.5% to 5,84,456 units
- Motorcycle sales up 9.2% to 5,44,658 units
- Scooter sales down 11.2% to 39,798 units
- Overall domestic sales up 8.5% to 5,68,684 units
- Exports down 18.7% to 15,782 units
- Comparisons made on a year-on-year basis
Management Commentary:
- Fourth consecutive month of growth in volume sales
- Increase in premium segment market share post launch of Xtreme 160R
- Witnessing strong retail off-take
- Rural and semi-urban centers driving demand
- Cautiously anticipate sales to continue their upward trajectory going into the festive season
- Now operating at nearly 100% production capacity
Shares fell as much as 2.7% to Rs 2,913 and are down for the fifth straight day. The stock is among the top laggards on the Nifty 50 index.
Stock Reaction: Jindal Steel & Power
The company has informed the exchanges that it its wholly-owned subsidiary Jindal Steel & Power (Mauritius) has sold 4.9 lakh shares or 48.99% of the total share capital of JSIS Oman to Vulcan Steel in the first tranche.
Vulcan Steel is a Mauritius-based private limited company and a subsidiary of Templar Investment.
The company on July 1 had informed of accepting a binding offer from Templar Investments to divest its entire stake in JSIS Oman.
The exchange filing said that JSPL intends to complete the entire sale within the specified time and as per shareholder approval.
Shares gained as much as 2.2% to Rs 222.95 and are up for the second straight day.
Stock Reaction: CG Power
The company at its board meeting held today has said that it received a letter from Tube Investments indicating their offer to infuse additional capital worth Rs 100 crore in the company.
The capital infusion will be done after Tube Investments subscribs to additional equity shares of the company on a preferential allotment basis, the exchange filing said.
The capital is being infused to meet the company's funding requirements, to meet the liabilities, stabilise operations and improve its liquidity position.
CG Power will now allot 6.87 crore shares of face of Rs 2 each at a price of Rs 14.55 per equity share to Tube Investments.
Shares recovered from a lower circuit of 5% to gain as much as 5% on an upper circuit to Rs 22.4, post the announcement.
Stock Reaction: Steel Strips Wheels
The company informed the exchanges that it has received a new export order from the U.S. Caravan trailer market.
The order of nearly 1.39 lakh wheels is estimated to be worth $1.17 million, according to the company's exchange filing.
The order is to be executed over a period of four months starting November 2020 from the company's Chennai plant.
The company in a statement on Tuesday reiterated its confidence of delivering 25% volume growth for FY21.
Shares gained as much as 7.7% to Rs 499.9, post the announcement and are up for the second straight day.
Markets At 10:10 A.M.
- Benchmark indices remain in a range
- Nifty up 0.1% at 11,486
- Sensex unchanged at 38,922
- Nifty Bank down 0.6% at 23,677
- Nifty Midcap index up 0.7%
- Nifty Smallcap index up 1%
- India Volatility Index little changed at 21.7
- Nifty I.T. and Nifty Metal gain over 1% each and are the top sectoral gainers
- Nifty PSU Bank is the top sectoral laggard; down 0.8%
- Nifty FMCG and Nifty Media gain over 0.5% each
- Zee Entertainment is the top Nifty gainer; up 4.3%
- Hero MotoCorp is the top Nifty laggard; down 1.9%
- 1,112 stocks on the NSE trade with gains while 475 decline
Money Market Update
The currency has opened weaker in today's session after ending at a six-month high on Tuesday.
The rupee opened at 73.05 against the U.S. Dollar as compared to Tuesday's close of 72.87. It was the best performing currency in Asia on Tuesday.
Bond market traders will look forward to the sale of treasury bills worth Rs 35,000 crore in today's session.
Yields fell the most since May on Tuesday after a slew of measures announced by the Reserve Bank of India with regards to repo operations and OMOs.
Coronavirus India Updates
- India back to reporting over 70,000 cases after a pause on Tuesday
- 78,357 new cases reported over the last 24 hours
- Total confirmed cases at 37,69,523
- Active cases at 8,01,282
- Patients cured / discharged / migrated at 29,01,908
- Death toll rises to 66,333
- 1,045 deaths reported in the last 24 hours
- 62,026 patients recovered in the last 24 hours
Stock Reaction: Parag Milk Foods
The company informed the exchanges that it received an intimation from the founders regarding further release of their pledged shares.
The founders of the company have released another 20 lakh pledged equity shares, the company said in an exchange filing.
Shares gained as much as 5.1% to Rs 109.9, post the announcement.
Stock Reaction: Vodafone Idea
The telecom operator informed the exchanges that it will hold a board meeting on September 4, to consider raising of funds.
The funds can be raised ni one or more tranches by way of a public issue, preferential allotment, private placement including a QIP among other methods, the company said in an exchange filing.
The stock had fallen as much as 20% on Tuesday after the Supreme Court asked telecom companies to repay the AGR dues over a period of 10 years as compared to the government's proposal to allow payments to be made over 20 years.
Shares gained as much as 10.4% to Rs 9.77, post the announcement.
August Auto Sales: Bajaj Auto
- Overall sales down 9% to 3,56,199 units
- Domestic sales down 11% to 1,85,879 units
- Exports down 6% to 1,70,320 units
- Domestic two-wheeler sales up 3% to 1,78,220 units
- Two-wheeler exports down 6% to 1,42,838 units
- Domestic CV sales down 78% to 7,659 units
- CV exports down 7% to 27,842 units
- Overall two-wheeler sales flat to 3,21,058 units
- Overall CV sales down 46% to 35,141
- Numbers compared on a year-on-year basis
Shares fell as much as 1.6% to Rs 2,910, post the announcement. The stock is down for the fifth straight day - its longest losing streak in over two months.
Opening Bell: A Subdued Start
Indian equity markets have opened mid-week trade little changed despite strong global cues.
The S&P BSE Sensex and the NSE Nifty 50 index opened little changed at 38,944 and 11,502 respectively.
Most sectoral indices have opened flat. The Metal index has opened 1% higher while the I.T. index has gained 0.7% at the start of trade. The Nifty Bank, PSU Bank index and the media index have opened with a negative bias.
Broader markets have opened higher with the midcap and smallcap index gaining 0.4% each in the early minutes of trade.
835 stocks on the NSE have opened with gains while 359 are trading with losses.
Latest On The Coronavirus
- Global cases cross 25.5 million
- Death toll rises to 8.52 lakh
- Texas may life restrictions on businesses as soon as next week
- Hospitalisations in Texas fall to 4,144 - the lowest since June 23
- Russia becomes the fourth nation to cross 1 milion confirmed cases
- ICU patients in Miami lowest since June
- Overall cases in the U.S. rise 0.7%
- Argentina crosses Chile to claim 10th spot in most cases globally
- Schools in Greece to open on September 14
How Did The Fund Flows Fare On Tuesday
Key Stocks In Focus
- ONGC: Reported a net profit in the June quarter, contrary to Bloomberg estimates of a net loss. Operational performance too was higher than estimates but realisations nearly halved compared to the previous quarter.
- Telecom Stocks: Supreme Court AGR judgment said that 10% upfront payment due by March 2021 is on total dues. This indicates that those telcos who have already paid 10% or more of total dues will have to make their next payment in 2022.
- Vodafone Idea: To consider raising funds in one or more tranches at its board meeting on September 4.
- Infosys: Increased U.S. hiring commitment to 25,000 jobs by 2022. It will hire 12,000 American workers over the next two years. Till date, it has created 13,000 jobs in the U.S. and will target experienced technology professionals as well as recent graduates from major universities, liberal arts colleges, and community colleges.
- Coal India: Monthly shipments rise for the first time in six months. Offtake up 9.3% to 44.34 MT. Production up 7.1% at 37.17 MT. Coal Minister Prahlad Joshi said that the company will invest over Rs 1.22 lakh crore by 2023-24 on projects related to coal evacuation, infra, exploration and clean coal technologies.
- NMDC: Iron ore sales in August up 20% to 1.79 MT from 1.49 MT last year. Iron ore production up 15% to 1.62 MT from 1.41 MT.
- Mukand: Board approved sale of upto 51% stake in company’s arm Mukand Sumi Special Tubes to the promoter group over a period of 12 months at a consideration of not less than Rs 571.91 per share aggregating to Rs 1,212.95 crore.
- Nifty Earnings Today: Coal India
- Non-Nifty Earnings Today: Arvind Fashions, Dish TV, Infibeam, Jubilant Foodworks, Sadbhav Engineering, Zuari Agrochem
To know more about Auto sales figures reported after market hours, key brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
More Volatility Ahead?
Good Morning!
Indian equity markets managed to recover some of Monday's losses in a volatile trading session that saw benchmarks ending 0.7% higher.
Futures are indicating a start with a negative bias. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.1% to 11,497 as of 7:45 a.m. on Wednesday.
Telecom and automakers will remain in focus as investors assess the Supreme Court's verdict on AGR dues and monthly sales.
Arvind Fashions, Jubilant Foodworks, Dish TV, Infibeam and Sadbhav Engineering are some non-Nifty 50 companies that are set to report their quarterly results today. Coal India is the only Nifty 50 stock to announce financials.
Asian markets have opened higher in mid-week trade after U.S. stocks ended at another record high, led by technology shares. Markets in Australia are outperforming, while those in Japan and South Korea are trading with more modest gains. Benchmarks in China and Hong Kong are fluctuating.
West Texas Intermediate crude rose 0.9% to $43.14 per barrel, while gold fell 0.3% to $1,964.25/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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