KEY HIGHLIGHTS
Closing Bell: Markets Take A Pause
Indian equity markets chose to take a breather in today's trading session after strong gains over the last two days, that nearly erased all of last week's losses.
The S&P BSE Sensex and the NSE Nifty 50, ended 8 and 5 points lower at 37,973 and 11,222 respectively.
Banks were the major laggards in today's trading session. The Nifty Bank fell 1.2% while the PSU Bank index ended 2.2% lower.
The other underperformers of the day included FMCG stocks, with the index ending 1.5% lower. The Nifty Realty fell 1.2% while the Nifty Pharma index fell 0.7%.
The outperformers of the day were metal stocks. The Nifty Metal index ended with gains of nearly 2%.
Broader markets too had a subdued session. The midcap index ended 0.1% lower while the smallcap index declined 0.3%
India Volatility Index ended 1% higher, near the mark of 20 at 19.77.
1,004 stocks on the National Stock Exchange ended with losses while 817 stocks posted gains.
How Did The Sectoral Indices Fare
Stock Reaction: KNR Construction
The company has informed the exchanges that it has transferred 100% stake of its subsidiary company - KNR Walayar Tollways Pvt. Ltd. to Cube Highways.
The Enterprise Value for this transaction is Rs 511.78 crore, the company said in a notice to the exchanges.
The Enterprise Value for this transaction excludes claims receivable from the National Highways Authority of India and other governmental instrumentalities.
The company will receive a total payout of Rs 384.68 crore.
The share purchase agreement for this was executed on January 9, 2020.
Shares gained as much as 3% to Rs 257.95, before cooling off. The stock is up for the third straight day.
India Considering Selling 25% Stake In LIC
The government is planning to seek the cabinet's approval to sell 25% stake in Life Insurance Corporation of India, people with knowledge of the matter told Bloomberg News.
The government is planning to amend the act of parliament under which LIC was set up to prepare for the sale, sources said.
The sale is likely to be done in tranches while the timing of the IPO will depend on market conditions.
A Finance Ministry spokesperson was not immediately available for a comment.
The Struggle For Oxygen Supply
Buzzing Stock: Page Industries
- Among top gainers on the BSE Midcap index
- Gains as much as 4.7% to Rs 21,581
- Trades at the highest level in over six months
- Up for the third straight day
- Longest winning streak in a month
- Has gained in four out of the last five trading sessions
- Up 17% in the last five trading sessions
- Breakout above its 200-Day Moving Average of 20,186 in Monday's trading session
- Today's volumes are 46% below its 20-day average
- One month implied volatility at 33%
- Stock nearing overbought territory with Relative Strength Index (RSI) at 69
- Trading 20% below its 52-week high of Rs 26,891 on January 24, 2020
- Six out of the 20 analysts tracking the stock have a buy recommendation; 9 sell calls
- The stock trades 10.4% higher than its 12-month consensus price target of Rs 18,970, implying a negative return potential
IPO Subscription Update: Day 1
Mazgaon Dock Shipbuilders:
- Overall subscription: 1.02 times
- Institutional subscription: 0
- Non-institutional subscription: 0.18 times
- Retail subscription 2.87 times
UTI Asset Management Company:
- Overall subscription: 0.15 times
- Institutional subscription: Zero
- Non-Institutional subscription: 0.04 times
- Retail subscription: 0.28 times
Subscription update as of 2 P.M.
Active Stock Options
- Hero MotoCorp's 3,200 Call: Premium up 63.6% to Rs 138. The contract has added 73,200 shares in Open Interest.
- Bata India's 1,400 Call: Premium up 30.8% to Rs 40.55. The contract has added 1.5 lakh shares in Open Interest.
- HDFC's 1,700 Call: Premium up 30.3% to Rs 70.45. The contract has shed 91,000 shares in Open Interest.
Buzzing Stock: Bank of Baroda
- Worst performing stock on the Nifty Next 50 index
- Declines as much as 6.1% to Rs 40.7
- Biggest single-day drop in four months
- Snaps two-day gaining streak
- Had declined for seven straight sessions before the two-day gaining streak
- Remains below its key Daily Moving Averages
- Today's volumes are 42% higher than its 20-day average
- Stock nearing oversold territory with Relative Strength Index (RSI) at 38
- Trading near its 52-week low of Rs 36 on May 20, 2020
- 15 out of the 37 analysts tracking the stock have a buy recommendation; 8 sell calls
- Return potential of the stock as per Bloomberg data is 39.8%
Buzzing Stock: Hero MotoCorp
- Second best performer on the Nifty 50 index
- Gains as much as 4.3% to Rs 3,222
- Biggest single-day gain in a month
- Trades at the highest level since December 2018
- Up for the third straight day
- Has gained 10% in the last three trading sessions
- Rebounds from 50-Day Moving Average support of 2,905
- Today's volumes are more than double its 20-day average
- Relative Strength Index (RSI) of the stock at 66
- Has more than doubled from its 52-week low of Rs 1,475 on March 24, 2020
- 33 out of the 52 analysts tracking the stock have a buy recommendation; 8 sell calls
- The stock trades 5% higher than its 12-month consensus price target of Rs 3,048, implying a negative return potential
Markets At 2:10 P.M.
- Benchmark indices trade in a narrow range
- Nifty up 0.1% at 11,243
- Sensex up 0.15% at 38,040
- Nifty Bank down 1.2% at 21,399
- Nifty Midcap index down 0.2%
- Nifty Smallcap index unchanged
- India Volatility Index up 3.1% to 20.2
- Nifty PSU Bank index remains the top sectoral laggard; down 2.5%
- Nifty FMCG, Nifty Realty are the other sectoral laggards; down 0.9% and 0.6% respectively
- Nifty Metal is the top sectoral gainer; up 1.3%
- Nifty I.T. is the other sectoral gainer; up 1%
- Hindalco remains the top Nifty gainer; up 5.1%
- IndusInd Bank remains the top Nifty laggard; 3.6%
- 1,015 stocks on the NSE trade with losses while 780 are gaining
Money Market Update
The rupee ended lower for the second straight day, posting modest losses in a rangebound session.
The currency ended at 73.86 against the U.S. Dollar, as compared to Monday's close of 73.79. It made an intraday low of 73.91 while 73.75 acted as the highest point of the day.
Today's performance made rupee the fourth worst performing currency in Asia.
Yield on the 10-year government bond ended at 6.04% as compared to Monday's close of 6.057%.
Third Day Of Gains For The I.T. Index
Buzzing Stock: Delta Corp
- Top gainer on the Nifty Smallcap index
- Gains as much as 7.4% to Rs 114.65
- Biggest single-day gain in over a month
- Trading at the highest level in a month
- Up for the third straight day
- Longest winning streak in a month
- Has gained 11% in the last three trading sessions
- Nearing 200-Day Moving Average at 116.5
- Today's volumes are more than triple its 20-day average
- Relative Strength Index (RSI) of the stock at 57
- Trading 50% below its 52-week high of Rs 224.8 on December 2, 2019
- All four analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 32%
F&O Snapshot: Active Options Contracts
- Nifty October futures add 7.2% and 6.1 lakh shares in Open Interest.
- Nifty Bank October futures add 17.7% and 2.7 lakh shares in Open Interest.
Nifty: October 1 Expiry
- 11,300 Call: Premium down 33.2% to Rs 28.5. The contract has added 18.7 lakh shares in Open Interest.
- 11,200 Put: Premium up 2% to Rs 66.85. The contract has added 12.6 lakh shares in Open Interest.
- 11,400 Call: Premium down 40.1% to Rs 9.5. The contract has added 18.3 lakh shares in Open Interest.
Nifty Bank: October 1 Expiry
- 22,000 Call: Premium down 69% to Rs 44.6. The contract has added 3.4 lakh shares in Open Interest.
- 21,500 Put: Premium up 59% to Rs 301.35. The contract has added 59,700 shares in Open Interest.
- 21,000 Put: Premium up 43.6% to Rs 100.7. The contract has added 2.4 lakh shares in Open Interest.
Stock Reaction: SBI Cards & Payment Services
The credit card issuer has entered into a strategic partnership with American Express, to offer a powerful mix of global benefits and exclusive privileges for Indian consumers.
SBI Card's premium products - SBI Card Elite and SBI Card Prime will be available on the global network of American Express, the company said in a statement.
"This alliance is another step in our efforts to bolster our premium portfolio, making our diverse portfolio of mass to premium more comprehensive and robust," MD & CEO of SBI Card was quoted as saying.
Shares gained as much as 1.1% to Rs 851.2, post the announcement. The stock is up for the second straight day.
European Stocks Open Lower
Benchmark indices opened lower, reversing some of the gains on Monday. The stocks had gained the most in three months on Monday.
The Stoxx 600 index opened 0.5% lower, with banks, auto, energy stocks dragging.
Asian markets have ended mixed, while futures on the Dow Jones have turned negative, currently trading lower by 40 points.
Brent crude trades 0.7% lower at $42.15 per barrel while Gold trades little changed at $1,879.1/Oz.
Let's take a look at how markets in Europe are trading:
- Euro Stoxx 50 down 0.3% at 3,212
- DAX down 0.4% at 12,815
- CAC down 0.3% at 4,829
- FTSE 100 down 0.1% at 5,919
- IBEX 35 down 0.5% at 6,758
How Are The Sectoral Indices Faring
Stock Reaction: Shree Cement
The company's Board of Directors have approved setting up a clinker unit in Raipur, having a capacity of up to 12,000 tonnes per day (TPD).
The proposed capacity is likely to have an investment of approximately Rs 1,000 crore and is likely to be added by the quarter ending September 2022, the company said in a statement.
The capex will be funded through a mixture of internal accruals and debt.
The existing cement capacity of the company is at 40.4 million tonnes per annum. The utilisation rate for the company in 2019-20 stood at 64%.
Brokerage firm Morgan Stanley upgraded the stock to overweight from equalweight this morning. However, the price target on the stock was cut to Rs 22,750 from the earlier Rs 23,450.
Shares are currently trading little changed at Rs 19,522, post the announcement.
Buzzing Stock: Natco Pharma
- Second best performer on the Nifty Midcap index
- Gains as much as 5.3% to Rs 988.7
- Trades at the highest level since January 2018
- Up for the fourth straight day
- Longest winning streak in nearly two months
- Has gained 14% in the last four trading sessions
- Today's volumes are nearly quadruple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 74
- Trading near its record high of Rs 996
- 10 out of the 16 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 10.6% higher than its 12-month consensus price target of Rs 865.5, implying a negative return potential
Metal Index Is The Top Sectoral Gainer
Markets At Noon
- Benchmark indices consolidate after two days of strong gains
- Nifty unchanged at 11,236
- Sensex unchanged at 38,012
- Nifty Bank down 1.1% at 21,416
- Nifty Midcap index down 0.3%
- Nifty Smallcap index unchanged
- India Volatility Index up 0.2% at 19.62
- Nifty PSU Bank index remains the top sectoral laggard; down 2.3%
- Nifty Metal is the top sectoral gainer; up 1.2%
- Nifty I.T. is the other sectoral gainer; up 0.7%
- Hindalco is the top gainer on the Nifty; up 4.2%
- IndusInd Bank is the top Nifty laggard; down 3.3%
- 997 stocks on the NSE trade with losses while 739 are gaining
Buzzing Stock: GMM Pfaudler
- Gains as much as 4.5% to Rs 3,775
- First day of gains after nine straight sessions of losses
- Nine-day drop was the biggest losing streak on record
- The nine-day losing streak had two lower circuits of 10% each and three lower circuits of 5% each
- Had declined 40% in the last nine trading sessions
- Today's volumes are nearly 60 times its 20-da average
- Relative Strength Index (RSI) remains in oversold territory at 24
- Has nearly halved from its 52-week high of Rs 6,913 on August 12, 2020
- 1 out of the five analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 4.7%
Buzzing Stock: IndusInd Bank
- Top laggard on the Nifty 50 index
- Falls as much as 4.8% to Rs 528.6
- Has declined in nine out of the last 12 trading sessions
- Today's volumes are 73% higher than its 20-day average
- One-month implied volatility at 60%
- Breaks below its 50-Day Moving Average at 555
- Relative Strength Index (RSI) of the stock at 43
- Has declined 67% from its 52-week high of Rs 1,596
- 35 out of the 57 analysts tracking the stock have a buy recommendation; 8 sell calls
- Return potential of the stock as per Bloomberg data is 15.1%
Buzzing Stock: Kajaria Ceramics
- Top gainer on the Nifty Smallcap index
- Gains as much as 5.5% to Rs 549.8
- Biggest single-day gain in two months
- Trades at the highest level in seven months
- Up for the third straight day
- Has gained 11% in the last three trading sessions
- Today's volumes are more than triple its 20-day average
- One-month implied volatility on the stock was 91%
- Stock in overbought territory with Relative Strength Index (RSI) at 71
- Trades 8% below its 52-week high of Rs 595.9 on February 1, 2020
- 20 out of the 31 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 13.5% higher than its 12-month consensus price target of Rs 474.1, implying a negative return potential
Stock Reaction: Intellect Design Arena
The company has informed the exchanges that it will steward the digital transformation of Myanmar's state-owned lender Myanma Foreign Trade Bank (MFTB).
The company will power MFTB's digital transformation with Intellect Digital Core 19.2 - a fully integrated solution, the company said.
The solution, according to the company is past-compatible and future-proof, giving MFTB the ability to integrate with its existing system seamlessly and to respond to new market demands and scale progressively, the statement said.
"With the comprehensive IDC suite and 'core in 24/7 mode,' we are confident of powering measurable growth for MFTB," Rajesh Saxena, CEO of the Intellect Design's Global Consumer Banking business was quoted as saying.
Shares gained as much as 3.6% to Rs 213.1, post the announcement and are up for the third straight day.
All Stocks In The PSU Bank Index Decline
Buzzing Stock: Adani Green Energy
- Trades at an all time high
- Second best performing stock on the Nifty 500 index
- Locked in an upper circuit of 5% at Rs 714.1
- Up for the fourth straight day
- Fourth straight day of upper circuit
- Up 22% in the last four trading sessions
- Today's volumes are 87% below its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 74
- Has multiplied over 13 times from its 52-week low of Rs 55 on October 3, 2019
Stock Reaction: Shalby
The company's Board of Directors have passed an enabling resolution to reduce the promoter holding in the company to 75% from the earlier 79.45%.
The resolution was also passed to increase the company's public shareholding to at least 25%, subject to shareholder approval.
The Board of Directors also approved issuance of equity shares or other convertible securities for an amount aggregating up to Rs 117.1 crore.
A fund raising committee has also been constituted for the same.
Shares have gained as much as 11.7% to Rs 89.5 and are trading at the highest level in a month.
Buzzing Stock: Bata India
- Second best performing stock on the Nifty Midcap index
- Gains as much as 4.4% to Rs 1,404
- Biggest single-day gain in two weeks
- Trades at the highest level in four months
- Up for the third straight day
- Longest winning streak in a month
- Has gained 8% over the last three trading sessions
- Nearing 200-Day Moving Average on the upside at 1,434.5
- Today's volumes are nearly five times higher than its 20-day average
- Relative Strength Index (RSI) of the stock at 63
- Has gained 40% from its 52-week low of Rs 1,000 on March 19, 2020 but remains 22% below its 52-week high of Rs 1,895 on February 7, 2020
- Seven out of the 15 analysts tracking the stock have a buy recommendation; five sell calls
- The stock trades 7% above its 12-month consensus price target of Rs 1,307, implying a negative return potential
Stock Reaction: Steel Strips Wheels
The company has informed the exchanges that it has received orders to export nearly 9,000 wheels for the trailer market in the European Union.
The order is worth 2.29 lakh Euros, the company said in an notice to the exchanges.
The order will be executed from the company's Chennai unit during the months of October and November.
Shares gained as much as 2.8% to Rs 445.2, post the announcement, up for the second straight day.
Markets At 10:10 A.M.
- Benchmark indices give up gains after opening higher for the third straight day
- Nifty up 0.1% at 11,239
- Sensex up 0.1% at 38,022
- Nifty Bank down 1.1% at 21,432
- Nifty Midcap index down 0.5%
- Nifty Smallcap index down 0.1%
- India Volatility Index down 0.6% to 19.45
- Nifty I.T. is the top sectoral gainer; up 1.6%
- Nifty Metal is the only other sectoral gainer; up 0.6%
- Nifty PSU Bank is the top sectoral laggard; down 2%
- Nifty Media is the other major sectoral laggard; down 1%
- Tata Consultancy Services is the top Nifty gainer; up 3.4%
- Three out of the top five Nifty gainers are I.T. stocks
- IndusInd Bank is the top Nifty laggard; down 4.1%
- 807 stocks on the NSE are trading with gains while 851 decline
Money Market Update
The rupee has opened little changed in today’s session, after ending with losses on Monday
The currency opened at 73.78 against the U.S. Dollar as compared to Monday's close of 73.79. It was the second worst performing currency in Asia on Monday.
Yield on the 10-year government bond opened at 6.053% as compared to Monday's close of 6.04%.
State governments intend to sell bonds worth Rs 25,440 crore in today's session. Bond market traders will also await clarity on the next meeting details of the Monetary Policy Committee.
The next meeting of the Monetary Policy Committee was scheduled to begin today, but was postponed as three external positions are yet to be filled.
Also Read: MPC Meeting To Be Rescheduled, Says RBI
Stock Reaction: Defence Stocks
Defence stocks are gaining traction in today's trading session after the government scrapped a rule on Monday that forced foreign suppliers of weapons, aircraft or military hardware to invest in the country.
Bloomberg News reported that the off-set requirement was done away with as the policy did not work, quoting Director General of Acquisition Apurva Chandra.
The new Defence Procurement policy, effective October 1, also allows military to lease equipment and weapons systems, instead of buying them.
Chandra said that this move will reduce costs considerably. "The type of equipment and weapon system to be leased is for the military to decide," he said.
- Shares of Bharat Dynamics gained as much as 4.4% to Rs 311.35.
- Shares of BEML gained as much as 3.75% to Rs 634.25, and are up for the second straight day.
- Shares of Hindustan Aeronautics gained as much as 2.6% to Rs 798.65 and are up for the second straight day.
Stock Reaction: Anuh Pharma
The company has informed the exchanges that it has received an approval from the World Health Organisation - Geneva, for prequalification for Pyrimethamine API.
The said API is used as anti-malarial drugs, the company said in an exchange filing.
Shares gained as much as 5% to Rs 207.8 and are up for the third straight day.
Coronavirus India Update
- India reports lowest new virus cases in over a month
- 70,589 new cases reported in the last 24 hours
- Total confirmed cases at 61,45,291
- Active cases at 9,45,576
- Patients cured / discharged / migrated at 51,01,397
- Death toll rises to 96,318
- Lowest single-day deaths reported in nearly two months
- 776 deaths reported in the last 24 hours
- 84,877 patients recovered in the last 24 hours
Stock Reaction: BPCL
The company at its AGM on Monday said that the capex for the year 2021 is pegged at Rs 8,000 crore, as diesel consumption is still below pre-Covid-19 levels.
It also said that the new Kochi gasoline unit will end shortage by next year. The company is also in talks with Bharat Oman Refinery for acquiring the remaining stake in the venture.
The chairman said that GRMs for the second quarter of FY21 are likely to be higher than that in the first quarter.
On the Numaligarh refinery, the company said that Oil India-Engineers India are interested in buying the same.
Shares gained as much as 2.3% to Rs 394 and are up for the second straight day.
Opening Bell: A Steady Start
Indian equity markets opened higher for the third straight day, extending the positive start made to the October F&O series.
The S&P BSE Sensex opened 0.5% higher at 38,176 while the NSE Nifty 50 index opened 0.54% higher at 11,288. Technical analysts have projected 11,300 to be a key resistance level for the Nifty.
The Sensex is up over 1,400 points, while the Nifty has gained over 400 points, courtesy gains made in the last two trading sessions.
All sectoral indices have opened with gains. The media index has opened 1% higher while Nifty Realty and Nifty Metal are up 0.8%. Indices like Nifty FMCG, Nifty I.T. and Nifty Pharma, along with the Nifty Bank are up 0.5% each.
Broader markets have opened with gains as well. The Midcap index has gained 0.7% while the Smallcap index is up 0.9% at the start of trade.
Trading Strategies For The Day
- Nifty: Use intraday dip towards 11,205-11,230 to create long positions for target of 11,317
- Nifty Bank: Buy in the range of 21,500-21,550 for target of 21,700-21,850 for stop loss of 21,400.
- Buy Max Financial Services for target of Rs 633.6 and Rs 640.5 with a stop loss of Rs 624.4
- Sell Torrent Pharma for target of Rs 2,701 and Rs 2,683 with a stop loss of Rs 2,725
Source: ICICI Direct
How Did The Fund Flows Fare On Monday
Key Stocks In Focus
- State Bank of India: Shuts down six floors of its corporate headquarters on September 25 after detection of a few Covid-19 cases. The lender will follow the business continuity plan accepted by the board. The floors are likely to reopen today following the sanitsation process. The top management will see full attendance today onwards while other officials will attend on alternate days.
- BPCL: Capex for FY21 seen at Rs 8,000 crore as diesel consumption is still below pre-Covid-19 levels. Management says government trying to complete privatisation by end of FY21. Decision on sale of treasury stock via bulk or block deal likely by October 15. The company is in talks with Bharat Oman Refinery for acquiring the remaining stake in the venture. GRMs for Q2FY21 likely to be superior on a sequential basis. Oil India-Enginers India are interested to buy the Numaligarh refinery, according to the company.
- IIFL Finance: Moody's downgrades corporate family rating and senior secured debt rating to B2 from B1. The rating outlook changed to stable from rating under review. The downgrade reflects expectations that the company's asset quality and profitability will deteriorate as loan delinquencies and defaults increase. The weakening will be driven by declining earnings and cash flow due to Covid-19-led economic contraction.
- Anuh Pharma: Received approval from WHO-Geneva for prequalification for pyrimcthamine APl which is used as an anti-malarial drug.
- UTI Asset Management Company: Raises Rs 644.6 crore from 67 anchor investors ahead of the IPO. Price Band has been set between Rs 552-554 per share.
- Mazgaon Dock Shipbuilders: Price band set between Rs 135-145 per share.
- Likhita Infrastructure: Price band set between Rs 117-120 per share.
To know more about the key stocks in focus, brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Consolidation Post Surge?
Good Morning!
Indian equity markets extended gains for the second straight trading session on Monday, continuing the strong start to the October series.
The Sensex gained 1,400 points, while the Nifty rose more than 400 points in the last two trading sessions. The indices have nearly erased all the losses made in the week gone by.
Futures, however, are indicating a flat start to today's trading session. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,254 as of 8:05 a.m. on Tuesday.
The street will focus on the three new IPOs opening for subscription—Mazgaon Dock Shipbuilders, UTI AMC and Likhita Infrastructure.
Most Asian markets, other than Japan, are rising in today's session. Those in Australia and South Korea, too, are gaining.
Futures on the Dow Jones are trading higher by 75 points. The index ended 1.5% higher on Monday.
West Texas Intermediate crude fell 0.4% to $40.42 per barrel, while gold was up 0.2% at $1,885/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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