KEY HIGHLIGHTS
Closing Bell: Second Day Of Gains
Indian equity markets outperformed their Asian peers in today's session with the benchmark indices ending at the highest point of the day.
The S&P BSE Sensex ended 1.26% higher at 38,528 while the NSE Nifty 50 index ended with gains of nearly 150 points at 11,385, up 1.23%. Both benchmark indices ended higher for the second day in a row.
Banks were the top performers in today's session. The Nifty Bank ended with gains of over 2%, as did the Nifty Media index.
Nifty Realty was the top sectoral gainer, ending the day's trade with gains of 4%.
Nifty Pharma was the only sectoral laggard, ending little changed but with a negative bias.
Broader markets were in-line with the benchmarks. The midcap index ended with gains of 1.2% while the smallcap index ended 1.5% higher.
The India Volatility Index ended lower for the second straight day, down 4.1% at 20.42.
Market breadth remained in favour of the gainers. 1,294 stocks on the NSE ended with gains while 518 declined.
How Have The Sectoral Indices Fared Today
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Buzzing Stock: Cholamandalam Investment & Finance
- Third best performer on the BSE Midcap index
- Gains as much as 9.6% to Rs 232.6
- Biggest single-day gain in two months
- Trades at the highest level in five months
- Snaps two-day losing streak
- Today's volumes are 82% higher than its 20-day average
- Nearing 200-Day Moving Average at 239.4
- Has doubled from its 52-week low of Rs 117.4 on April 7, 2020
- 27 out of the 31 analysts tracking the stock have a buy recommendation; 2 sell calls
- Return potential of the stock as per Bloomberg data is 9%
Populism A Key Risk To Indian Economy, Says JPMorgan
India is likely to see a surge in populist policies as it battles the world's third-highest Covid-19 cases. This will be a key risk for companies who's fortunes are closely tied to the economy, Bloomberg News reports citing a note from JPMorgan Chase & Co.
"Populism is a justifiable concern for investors," analysts led by James Sullivan wrote in a note.
The S&P BSE Sensex's 12-month price-to-earnings ratio hit a record earlier this month after the gauge rebounded nearly 50% from its March lows.
"We advise minimal or reducing exposure to sectors linked to growth and investment cyclicals like financials, material and energy except Reliance Industries," Sullivan said in the note.
The brokerage has advised focusing on consumer services and healthcare-oriented companies instead.
Buzzing Stock: Adani Enterprises
- Gains as much as 8.7% to Rs 215
- Biggest single-day gain since May 2019
- Trades at the highest level in five 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 nearly triple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 78
- Has gained 85% from its 52-week low of Rs 116 on March 24, 2020
- The stock trades 4.8% higher than its 12-month consensus price target of Rs 204, implying a negative return potential
Nifty Bank Recovers 400 Points From Day's Low
Earnings Reaction: KNR Constructions Q1FY21
- Revenue up 3% to Rs 479.4 crore
- Net profit down 17% to Rs 39.8 crore
- Ebitda up 5% to Rs 94.4 crore
- Ebitda margin at 19.7% from 19.4%
- Net profit declines due to lower other income
- Other income down 64% to Rs 6.1 crore
- All numbers are standalone and compared on a year-on-year basis
Shares ended 5.6% higher at Rs 240 - the highest level in five months.
Markets At 2:10 P.M.
- Benchmark indices extend gains to trade at the day's high
- Nifty up 1.1% at 11,372
- Sensex up 1.1% at 38,474
- Nifty Bank up 1.7% at 22,063
- Nifty Midcap index up 1.2%
- Nifty Smallcap index up 1.5%
- India Volatility Index down 3% to Rs 20.7
- Nifty Realty remains the top sectoral gainer; up 4.5%
- Nifty Media is the other major sectoral gainer; up 2.2%
- Nifty Auto and Nifty Metal gain over 1% each
- Nifty Pharma remains the only sectoral laggard; down 0.2%
- Grasim remains the top Nifty gainer; up 7.5%
- BPCL is the top Nifty laggard; down 1.3%
- 1,265 stocks on the NSE trade with gains while 521 decline
Money Market Update
The rupee managed to post gains in today's session after staging a recovery from the lowest point of the day.
The currency ended at 74.76 against the U.S. Dollar as compared to Monday's close of 74.88, which was also the intra-day low in today's trading session.
Most other Emerging Market currencies managed to outperform the U.S. Dollar in today's session. The rupee ended as the third-best performer in Asia today.
Yield on the 10-year government bond ended at 5.955% as compared to Monday's close of 5.951%.
Active Stock Options
- TCS' 2,300 Call: Premium up 4.1% to Rs 39.45. The contract has added 1,404 shares in Open Interest.
- Maruti's 7,000 Call: Premium up 33.1% to Rs 97.5. The contract has added 116 shares in Open Interest.
- IndiGo's 1,200 Call: Premium up 91.6% to Rs 53.45. The contract has added 255 shares in Open Interest.
Sixth Day Of Gains In The Last Seven Sessions For The Media Index
Earnings Reaction: Fertilisers & Chemicals Travancore Q1FY21
- Revenue up 57% to Rs 551.8 crore
- Net loss narrows to Rs 17.5 crore from Rs 80.1 crore
- Ebitda gain of Rs 34.5 crore from Ebitda loss of Rs 11.2 crore
- Net worth of the company has been fully eroded
- Cash & cash equivalents and other bank balances at Rs 873.8 crore
- No material uncertainty which may cast significant doubt on the company's ability to continue as a going concern.
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 6.6% to Rs 52.45, post the announcement. The stock trades higher for the second straight day.
Buzzing Stock: Ashok Leyland
- Top gainer on the Nifty Auto Index
- Gains as much as 9.7% to Rs 68.8
- Trades at the highest level in five months
- Up for the ninth straight day
- Longest winning streak since March 2019
- Has gained in 11 out of the last 12 trading sessions
- Up 40% in the last 12 trading sessions
- Today's volumes are more than double its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 83
- Breaks above its 200-Day Moving Average of 63.4
- Has doubled from its 52-week low of Rs 33.7 on March 25, 2020
- 28 out of the 45 analysts tracking the stock have a buy recommendation; 5 sell calls
- The stock trades 2.3% higher than its 12-month consensus price target of Rs 65.95, implying a negative return potential
European Markets Open Weak
Markets in Europe have opened lower in response to concerns over virus-related economic threats, including rising cases in Germany.
The Stoxx 600 has opened with declines of 0.6% with all the sectors trading with losses. Banks, Auto, Healthcare are the top laggards.
Asian markets have ended mixed while futures on the Dow Jones are trading lower by 100 points.
Brent crude trades 0.4% lower at $45.2 per barrel while Gold is back at the $2,000/Oz mark, gaining 0.7% to $2,000/Oz.
Let's take a look at how benchmarks across Europe have opened:
- Euro Stoxx 50 down 0.7% at 3,283
- DAX down 0.7% at 12,835
- CAC down 0.7% at 4,939
- FTSE 100 down 0.65% at 6,086
- IBEX 35 down 0.75% at 7,037
How Are The Sectoral Indices Faring
Earnings Estimates: Zee Entertainment Q1FY21
- Revenue seen 34% lower at Rs 1,321 crore
- Net profit seen 38% lower at Rs 331 crore
- Ebtida seen 36% lower at Rs 463 crore
- Ebitda margin seen at 35% from 36%
- All estimates are consolidated and compared on a year-on-year basis
Factors At Play For Zee Entertainment:
- Ad revenue likely to see one of the sharpest ever decline
- Subscription revenue likely to see growth
- Decline in operational revenue to impact margins
Shares are recovering from the day's low, after declining as much as 2.8% to Rs 165.3.
Auto Index Gains In 10 Out Of Last 11 Sessions
F&O Snapshot: Active Options Contracts
- Nifty August futures add 8.65% and 8.7 lakh shares in Open Interest.
- Nifty Bank August futures add 16.9% and 2.3 lakh shares in Open Interest.
Nifty: August 20 Expiry
- 11,300 Put: Premium down 32% to Rs 67.9. The contract has added 21.54 lakh shares in Open Interest.
- 11,300 Call: Premium up 12.4% to Rs 71.2. The contract has added 7.23 lakh shares in Open Interest.
- 11,200 Call: Premium up 24.6% to Rs 138.2. The contract has shed 81,450 shares in Open Interest.
Nifty Bank: August 20 Expiry
- 22,000 Call: Premium down 34.2% to Rs 123.7. The contract has added 4.3 lakh shares in Open Interest.
- 21,700 Put: Premium down 45.5% to Rs 209.95. The contract has added 3.45 lakh shares in Open Interest.
- 21,800 Put: Premium down 45.2% to Rs 258.2. The contract has added 2.7 lakh shares in Open Interest.
Markets At Noon
- Benchmark indices hold on to gains
- Nifty up 0.6% at 11,311
- Sensex up 0.5% at 38,246
- Nifty Bank up 0.6% at 21,825
- Nifty Midcap index up 1%
- Nifty Smallcap index up 1.2%
- India Volatility Index down 2% to 20.88
- Nifty Realty extends gains as the top sectoral gainer; up 3.8%
- Nifty Auto index extends gains; up 1%
- Nifty I.T. gives up gains to trade flat
- Grasim remains the top Nifty gainer; up 7.6%
- Zee Entertainment remains the top Nifty laggard; down 1%
- 1,223 stocks on the NSE trade with gains while 523 decline
Buzzing Stock: GNA Axles
- Among best performing stocks on the BSE Smallcap index
- Gains as much as 12.9% to Rs 234
- Trades at the highest level in six months
- Up for the second straight day
- Has gained 13.5% in the last two trading sessions
- Today's volumes are more than six times higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 72
- Breaks above its 200-Day Moving Average at 214.5
- Has gained 86% from its 52-week low of Rs 126 on March 23, 2020
- Two out of the three analysts tracking the stock have a buy recommendation; 1 sell call
- The stock trades 12.7% above its 12-month consensus price target of Rs 200, implying a negative return potential
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Buzzing Stock: Jindal Stainless
- Trades at the highest level since November 2018
- Gains as much as 5.3% to Rs 50
- Up for the third straight day
- Has declined only once in the last 12 trading sessions
- Up 39% in the last 12 trading sessions
- Today's volumes are nearly triple its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 82
- Has more than doubled from its 52-week low of Rs 21.4 on March 27, 2020
- All four analysts tracking the stock have a buy recommendation
- The stock trades 6.8% higher than its 12-month consensus price target of Rs 46.3, implying a negative return potential
Realty Index Is The Top Sectoral Gainer
Stock Reaction: Birlasoft
The company has announced a strategic cloud alliance with microsoft to help its clients accelerate their digital journey.
The collaboration puts Birlasoft in a strategic position to support its enterprise clients with their cloud transformation needs, according to its exchange filing.
The company has plans to scale its current Microsoft cloud business to $100 million. It will focus on delivering end-to-end services on Microsoft Azure, Microsoft 365 and Microsoft Dynamics 365 to its clients.
Shares gained as much as 15.4% - the most since May 2012 to Rs 173.4, post the announcement. The stock trades at the highest level since September 2018.
Madras High Court Rejects Vedanta's Plea
Vedanta Ltd. will have to keep its plans to resume operations at its Thoothukudi unit on hold for long after the Madras High Court rejected an appeal to restart the plant.
Vedanta can now appeal to the Supreme Court, Bloomberg News reports.
Operations at the plant were stalled for maintenance in March 2018 and later extended due to mounting opposition from villagers against pollution caused by the plant.
The Supreme Court last year stalled the reopening of the plant, overruling an order from the National Green Tribunal, stating that the NGT did not have the jurisdiction to decide on the matter.
Shares fell as much as 6.1% to Rs 120.1, before recovering. The stock currently trades 0.9% lower at Rs 126.85.
Buzzing Stock: Grasim
- Top gainer on the Nifty 50 index
- Gains as much as 7.6% to Rs 672.9
- Biggest single-day gain in four months
- Trades at the highest level in five months
- Snaps two-day losing streak
- Today's volumes are seven times higher than its 20-day average
- Breaks above its 200-Day Moving Average at 653.2
- The stock has recovered 77% from its 52-week low of Rs 380 on March 25, 2020
- 8 out of the 12 analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential of the stock as per Bloomberg data is 7.4%
Stock Reaction: Steel Strips Wheels
The company has informed the exchanges that it has won export orders for over 1.1 lakh wheels for the U.S. Caravan Trailer market.
The order is worth $1.7 million or Rs 13 crore, according to the company's exchange filing.
The order will be executed in the month of September and October from its Chennai plant.
The company also said that production at the Chennai steel wheel plant will be 100% for the passenger car and truck lines from the month of September.
Shares gained as much as 3.8% to Rs 439, post the announcement.
July Crude Steel Output Drops 20%: Government
India's output of crude steel fell 20% as compared to the previous year, Bloomberg News reports, citing a statement from India's Steel Ministry.
The Ministry however has not provided the latest output and consumption figures. Consumption of crude steel declined 29% in July as compared to the previous year, according to the statement.
In July 2019, India had produced 9.2 million tonnes of crude steel and consumed 8.4 million tonnes.
Exports of finished steel rose 'significantly' year-on-year to 1.38 million tonnes while imports fell 63% to 0.29 million tonnes.
China and Vietnam combined to contribute 55% of India's total steel exports.
Inventories at the end of July stood at 13 million tonnes, down 3% month-on-month.
Buzzing Stocks: PNB Housing Finance
- Top performer on the Nifty Midcap index
- Gains as much as 11.6% to Rs 268.85
- Biggest single-day gain since October 2019
- Trades at the highest level in over five months
- Up for the third straight day
- Has gained in five out of the last seven trading sessions
- Gains 23% in the last seven trading sessions
- Today's volumes are six times higher than its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 77
- Trades above its 50 and 100-Day Moving Average
- Has nearly doubled from its 52-week low of Rs 145 on March 26, 2020
- Six out of the 17 analysts tracking the stock have a buy recommendation; 3 sell calls
- The stock trades 8.6% higher than its 12-month price target of Rs 244.1, implying a negative return potential
Markets At 10:10 A.M.
- Benchmark indices trade near the day's high
- Nifty up 0.6% at 11,311
- Sensex up 0.57% at 38,251
- Nifty Bank up 0.2% at 21,744
- Nifty Midcap index up 0.6%
- Nifty Smallcap index up 1.1%
- India Volatility Index down 2.5% to 20.77
- Nifty Realty is the top sectoral gainer; up 3.4%
- Nifty Auto, Nifty I.T. and Nifty Metal gain 0.6% each
- Nifty Media index is the top sectoral laggard; down 0.8%
- Grasim is the top Nifty gainer; up 5.6%
- Zee Entertainment is the top Nifty laggard; down 2%
- 1,208 stocks on the NSE trade with gains while 470 decline
Money Market Update
The rupee has opened stronger in today's trading session, in-line with the gains in India's equity markets.
The currency opened at 74.74 against the U.S. Dollar as compared to Monday's close of 74.88.
Religare Broking believes that the currency traders will eye minutes of the latest meeting of the U.S. Federal REserve for further cues.
Within the bond markets today, states like Bihar and Haryana plan to sell bonds worth over Rs 10,000 crore.
Overseas funds have sold Indian corporate and government bonds worth $14.6 billion this year, the most among other Emerging-Asian nations, according to data compiled by Bloomberg.
Stock Reaction: GPT Infraprojects
The company informed the exchanges on Monday that it has won an order worth Rs 196.3 crore from the Rail Vikas Nigam.
The order involves construction of Metro Railway viaduct from P276 to P314, including Mominpur and Majerhat stations, in connection with the Joka-Esplande Metro Railway project in Kolkata.
The company has an overall market capitalisation of Rs 88 crore as per data on the exchanges.
Shares rose as much as 12% to Rs 31.1 and are up for the second straight day.
Earnings Reaction: Petronet LNG Q1FY21
The city gas distributor reported a 43% decline in its net profit for the April-June period.
Net profit for the company rose 46% as compared to the previous quarter to Rs 520.2 crore, mainly on account of lower expenses.
Operational performance of the company was strong with Ebitda rising 30% as compared to the previous quarter while margins improved to 18.6% from 8.1%.
Brokerage firm Morgan Stanley believes that demand recovering to Pre-Covid levels implies that start of an upgrade cycle for the company. It has maintained its overweight rating on the stock with a price target of Rs 321.
Shares rose as much as 5.3% to Rs 267.8 - its highest level in over a month.
Coronavirus India Updates
- First instance of recoveries being higher than new cases reported
- 55,079 new cases reported over the last 24 hours
- Total confirmed cases now at 27,02,742
- Active cases now at 6,73,166
- Patients cured / discharged / migrated at 19,77,779
- Death toll rises to 51,797
- 876 deaths reported over the last 24 hours
- 57,937 patients recovered over the last 24 hours
Stock Reaction: Bandhan Bank
The Kolkata-based private lender informed the exchanges on Monday evening that the Reserve Bank of India has lifted its regulatory restrictions after promoters complied with its shareholding norms.
The promoters of the bank had sold 20% stake earlier this month to bring their overall stake to 40% in order to comply with the central bank norms.
With this, restrictions imposed on the remuneration of the bank's MD & CEO at existing levels is now lifted.
The restriction of seeking prior RBI approval for opening new branches was withdrawn in February this year.
The RBI had imposed both these restrictions on the bank in a letter dated September 19, 2018, the exchange filing said.
Shares gained as much as 2.5% to Rs 294.4. The stock has snapped a six-day losing streak.
Opening Bell: A Subdued Start
Indian equity markets opened flat, in-line with the futures and markets across the Asia Pacific.
The S&P BSE Sensex opened little changed at 38,084, as did the NSE Nifty 50 index which opened 12 points higher at 11,259. Both benchmarks ended near the day's high on Monday.
All sectoral indices have opened flat as well. The Auto and PSU bank index have opened with gains of 0.4% each while the Nifty I.T. index has opened 0.6% higher.
Broader markets are outperforming with the midcap index opening 0.4% higher while the smallcap index gaining 0.6%.
Market breadth was in favour of the gainers. 1,107 stocks on the NSE opened with gains while 387 started the day's trade with losses.
Latest On The Coronavirus
- Global cases cross 21.8 million
- Death toll rises to 7.72 lakh
- South Korea reports 246 new cases
- Overall cases in the U.S. rise 0.8%
- 6,469 new cases reported in California along with 18 deaths
- Texas becomes the fourth U.S. state to have more than 10,000 deaths. 7,368 new cases were reported on Monday.
- Florida has 2,760 new cases - the lowest since June 21
- 493 new infections reported in France
How Did The Fund Flows Fare On Monday
Key Stocks In Focus
- Bandhan Bank: RBI removes regulatory restrictions after bank complies with promoter shareholding norms. The restrictions on the CEO's pay have now been lifted while those on prior approval for new branches were lifted earlier.
- RBL Bank: To consider raising of funds by issuing equity shares on a preferential basis on August 20.
- Covid-19 Impact On Delta Corp: Temporary suspension of operations has had an impact on the revenue of casino and hospitality business but the online skill gaming business continues to operate and grow, the company said. Normalcy could be gradually restored during the financial year ending March 2021.
- Triveni Engineering: Approved Rs 65 crore buyback through the tender offer process at a price of Rs 105 per share. Buyback price is a 42% premium to Monday’s closing price.
- VRL Logistics: Bloomberg News reports that the company which owns the largest fleet of commercial vehicles in India will not buy new trucks and will get rid of old ones to rein in repair costs amid a nascent recovery in demand.
- Quess Corp: To disinvest 100% stake in its wholly-owned subsidiary Dependo Logistics Solutions Private Limited in an all-cash deal worth Rs 10 crore. The transaction is expected to be completed by August 20.
- Nifty Earnings Today: Zee Entertainment
- Non-Nifty Earnings Today: FACT, Hindustan Aeronautics, Indo Count Industries, JK Cement, KNR Constructions, Uflex
To know more about earnings reported after market hours, key brokerage updates and more, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
A Flat Start Likely
Good Morning!
India's equity benchmarks ended with gains on Monday, led by the Nifty Bank's 350-point recovery from the day's low.
But futures are indicating a flat start to Tuesday's session. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,278 as of 7:55 a.m.
Stocks like Petronet LNG and Orient Paper that reported their quarterly earnings after market hours on Monday will be in focus.
Zee Entertainment Enterprises Ltd. is the only Nifty 50 company that's set to announce its financials today. The stock has gained in nine of the last 10 trading sessions. Other non-Nifty firms to declare results include Fertiliser and Chemicals Travancore, Hindustan Aeronautics, JK Cement and KNR Constructions.
Globally, Asian markets are drifting lower this morning. Benchmarks slipped in Japan and South Korea, while those in Hong Kong, China and Australia are fluctuating.
Futures on the Dow Jones trade lower by 25 points. The index ended 0.3% lower on Monday.
West Texas Intermediate crude fell 0.3% to $42.79 per barrel, while gold was flat at $1,988.2/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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