KEY HIGHLIGHTS
Closing Bell: Negative Start To Expiry Week
Indian equity markets ended the first day of the September series expiry week, ending with steep cuts, in-line with the sour global sentiment.
The S&P BSE Sensex 2.1% lower at 38,034 while the NSE Nifty 50 index fell 2.2% to end at 11,250. Only 3 out of the 50 index constituents ended the day with gains.
All sectoral indices ended with losses, including the Nifty I.T. index which traded with gains for most parts of the session. The index snapped a seven-day gaining streak.
The Nifty Bank ended over 700 points lower, declining 3.5%. Barring Kotak Mahindra Bank, all constituents of the index, ended with losses.
The Nifty Realty index was the top laggard in today's session, ending 6% lower, followed by the Nifty Metal index, which declined 5.5%.
Indices like Nifty Pharma, Nifty PSU Bank, Nifty Media and Nifty Auto fell over 4% each. The FMCG index too declined 3.3%.
Investors took profits off the table from the broader markets as well. The midcap index ended 4.1% lower while the smallcap index fell 4.2%.
India Volatility Index rose 13% to end at 22.65.
Market breadth turned adverse with 1,597 stocks on the NSE ending with gains while only 293 managed to end with gains.
How Did The Sectoral Indices Fare
HDFC Bank Issues Clarification On The Lawsuit
Metal Index Falls Over 5%
Developers Face Labour Woes
Stock Reaction: Canara Bank
The state-run lender has informed the exchanges that it will consider raising funds through a Qualified Institutional Placement (QIP) at its board meeting.
The board meeting will take place on September 25, the bank said in its exchange filing.
The board had earlier shared its capital raising plans for FY21, in July.
Shares fell as much as 3.1% to Rs 95.6 and are down for the fourth straight day. The stock trades at the lowest level in nearly four months.
Buzzing Stock: Tata Consumer Products
- Worst performing stock on the Nifty FMCG Index
- Falls as much as 5.5% to Rs 510.8
- Biggest single-day drop in six months
- Trades at the lowest level in nearly two months
- Down for the second straight day
- Today's volumes are 17% below its 20-day average
- Nearing its 50-Day Moving Average on the downside at 499.5
- Has declined 14% from its 52-week high of Rs 591.9, on September 3, 2020
- 12 out of the 13 analysts tracking the stock have a buy recommendation; 0 sell calls
- The stock still trades 1.5% higher than its 12-month consensus price target of Rs 506.5
Active Stock Options
- Dr Reddy's 5,600 Call: Premium down 58.6% to Rs 28. The contract has added 3 lakh shares in Open Interest.
- Reliance Industries' 2,400 Call: Premium down 48% to Rs 7.7. The contract has shed 33,835 shares in Open Interest.
- State Bank of India's 200 Call: Premium down 66.7% to Rs 0.7. The contract has added 2.6 lakh shares in Open Interest.
Buzzing Stock: Muthoot Finance
- Among worst performing stock on the Midcap index
- Falls as much as 5.7% to Rs 1,041.6
- Biggest single-day fall in four months
- Trades at the lowest level in three months
- Down for the third straight day
- Declines 9% in the last three trading sessions
- Today's volumes are 27% below its 20-day average
- Falls below its 100-Day Moving Average of 1,074
- Has declined 26% from its 52-week high of Rs 1,405 on July 28, 2020
- Eight out of the 14 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 23.4%
Sectoral Indices Extend Losses
Markets At 2:10 P.M.
- Benchmark indices fall to the day's low
- Nifty down 1.1% at 11,377
- Sensex down 0.9% at 38,490
- Nifty Bank down 1.7% at 21,650
- Nifty Midcap index down 2.6%
- Nifty Smallcap index down 2.5%
- India Volatility Index up 4.5% at 20.94
- Nifty I.T. remains the only sectoral gainer; up 1%
- Nifty Realty, Nifty Metal, Nifty Media, Nifty Pharma and Nifty PSU Bank fall over 3.5% each
- Nifty FMCG, Nifty Auto decline 2.5% each
- Kotak Mahindra Bank is the top Nifty gainer; up 1.7%
- Hindalco is the top Nifty laggard; down 7%
- 42 out of the 50 Nifty constituents decline
- 1,458 stocks on the NSE decline while 379 trade with gains
Money Market Update
The rupee ended flat in today's trading session after remaining in a narrow range through the day.
The currency ended at 73.40 against the U.S. Dollar as compared to Friday's close of 73.45.
The rupee made an intraday low of 73.44 and an intraday high of 73.26, implying a 18 paisa range through the session.
Four of the rupee's emerging market peers managed to outperform it in today's trading session.
Yield on the 10-year government bond ended at 6.011% as compared to Friday's closing of 6.015%.
Buzzing Stock: Apollo Hospitals
- Trading at a record high
- Gains as much as 3.9% to Rs 1,900
- Up for the eighth straight day
- Longest winning streak since January 2019
- Has gained 17% in the last eight trading sessions
- Today's volumes are 95% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 76
- Broke out above its 50-Day Moving Average at 1,644 on September 15, has surged over Rs 230 since then
- Has nearly doubled from its 52-week low of Rs 1,047.5, on March 31, 2020
- 21 out of the 22 analysts tracking the stock have a buy recommendation; 1 sell call
- The stock crossed its 12-month consensus price target of Rs 1,861 in today's trading session
Buzzing Stock: Nestle India
- Among top laggards on the Nifty 50 index
- Down as much as 3.5% to Rs 15,531
- Biggest single-day drop in four months
- Trades at the lowest level in over five months
- Down for the third straight day
- Has declined in six out of the last seven trading sessions
- Today's volumes are 84% higher than its 20-day average
- Breaks below its 200-Day Moving Average support at 16,110
- Has declined over 15% from its 52-week high of Rs 18,369 on April 17, 2020
- 16 out of the 42 analysts tracking the stock have a buy recommendation; 12 sell calls
- Return potential of the stock as per Bloomberg data is 8.1%
European Markets Trade Lower
Benchmark indices in Europe are trading lower, in line with their peers in Asia and U.S. equity futures.
The Stoxx 600 trades 1.1% lower with all sectors trading with losses. Banks, travel stocks are the biggest laggards.
Asian market other than Japan (which was shut due to holiday) have ended lower while futures on the Dow Jones are down nearly 300 points.
Brent crude trades 1.5% lower at $42.53 per barrel while Gold is unchanged at $1,950/Oz.
Let's take a look at how benchmark indices are trading:
- Euro Stoxx 50 down 1.6% at 3,231
- DAX down 1.7% at 12,891
- CAC down 1.5% at 4,901
- FTSE 100 down 2% at 5,889
- IBEX 35 down 1.6% at 6,816
Stock Reaction: RITES
The company has informed the exchanges that it has been awarded a contract for railway electrification works on a competition basis.
The order amounts to Rs 474.92 crore, the company said in a filing.
The turnkey contract majorly covers sections of Mavli-B.Sadri, Udaipur City-Himmatnagar, Bhatinda-Firozpur and Gulbarga-Bidar.
Shares remain lower by 1% at Rs 253.03, post the announcement.
Stock Reaction: Mold-Tek Packaging
The company has informed the exchanges that it will raise Rs 90 crore through a rights issue.
The board has appointed Emkay Global Financial Services as the lead manager to the rights issue, and also constituted a Committee of Directors for the rights issue, to decide on the other terms and conditions along with the record date, it said in an exchange filing.
Shares currently trade flat, up 0.4% at Rs 289.4.
How Are The Sectoral Indices Faring
Saurabh Mukherjea's Filters For Investing
Nifty Auto Among Top Sectoral Laggards
Markets At Noon
- Benchmark indices continue to trade in a range
- Nifty down 0.1% at 11,492
- Sensex unchanged at 38,822
- Nifty Bank down 0.5% at 21,926
- Nifty Midcap index down 0.8%
- Nifty Smallcap index down 0.6%
- India Volatility Index up 0.4% at 20.12
- Nifty I.T. remains the only sectoral gainer; up 1.9%
- Nifty Realty is the top sectoral laggard; down 1.5%
- Nifty Metal, Nifty FMCG and Nifty Auto down 1.3% each
- Nifty PSU bank, Nifty Pharma down 1%
- HCL Technologies remains the top Nifty gainer; up 3.7%
- Four out of the top five Nifty gainers are I.T. stocks
- Tata Motors remains the top Nifty laggard; down 3.1%
- 596 stocks on the NSE trade with gains while 1,167 stocks decline
Buzzing Stock: Prince Pipes & Fittings
- Among top performers on the Nifty 500 index
- Gains as much as 7.3% to Rs 242.8
- Trades at a record high
- Up for the third straight day
- Longest winning streak in nearly a month
- Has gained 18% in the last three trading sessions
- Today's volumes are 79% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 75
- Has more than tripled from its 52-week low of Rs 75 on May 22, 2020
- All six analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 2.9%
Stock Reaction: Essel Propack
The promoter of the company - Epsilon Bidco sold 7.26 crore shares of the company, amounting to 23% of the total equity in several large trades on Friday.
Buyers of those shares included Axis Mutual Fund, Aditya Birla Sun Life Mutual Fund, IDFC Mutual Fund, Nomura, Franklin Templeton, Norges Bank, DSP Mutual Fund among others.
Axis Mutual Fund acquired 1 crore shares of the company or 3.17% stake at Rs 256.3 per share. Aditya Birla Sun Life Mutual Fund acquired 58.52 lakh shares of the company or 1.9% stake at Rs 256.3 per share.
Shares gained as much as 4.2% to Rs 262.45, snapping a four-day losing streak.
Stock Reaction: Ramco Systems
The company has informed the exchanges that it has signed an agreement with CHI Aviation for delivering the full suite Ramco Aviation Software.
The software comprises of maintenance and engineering, supply chain, MRO sales, flight operations, manufacturing and finance.
CHI Aviation is a leading U.S.-based helicopter services provider for the heavy-life helicopter services, the company said.
With this order win, Ramco Aviation Suite now maintains the largest number of civilian versions of CH-47 Helicopters (Chinooks), the statement said.
Shares gained as much as 5% to Rs 397.1 and are trading at the highest level since August 2018. The stock is up for the seventh straight day, its longest winning streak in a month.
Stock Reaction: RITES
The company has approved a buyback of shares worth Rs 257 crore. The company will buyback up to 96.98 lakh shares, it said in an exchange filing.
The buyback price of Rs 265 per share is a 3.8% premium to Friday's closing price.
The record date for the buyback has been set as September 30.
Shares fell as much as 1.3% to Rs 252, snapping a two-day gaining streak.
Stock Reaction: Steel Strips Wheels
The company has informed the exchanges that it has won export orders of nearly 10,000 wheels from the U.S. Caravan Trailer market.
The order is estimated to be worth $1,33,000, the company said in an exchange filing.
The order is supposed to be executed from the company's Chennai plant during the month of October.
"Orders of similar capacity are anticipated from the same customer base," the company said.
Shares gained as much as 3.2% to Rs 465, post the announcement. The stock is up for the second straight day.
Eight Day Of Gains For The I.T. Index
Buzzing Stock: Jindal Steel & Power
- Worst performer on the Nifty Midcap index
- Falls as much as 7% to Rs 184.3
- Biggest single-day fall in over four months
- Trades at the lowest level in nearly two months
- Down for the fifth straight day
- Longest losing streak since April 2019
- Down 11% in the last five trading sessions
- Today's volumes are 16% higher than its 20-day average
- Breaks below its 50-Day Moving Average of 200
- Down 22% from its 52-week high of Rs 238.75 on August 20, 2020
- 18 out of the 21 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 42.5%
Stock Reaction: Valiant Organics
The company's promoter Dilesh Roadlines sold four lakh shares of the company at Rs 2,749.1 per share, in a large deal on Friday. The shares sold amount to 3.3% of the total equity.
The shares sold by the promoter were acquired by Nippon India Mutual Fund, which acquired 2.9 lakh shares or 2.4% stake in the company at Rs 2,749.02 per share and Goldman Sachs, which acquired 1.07 lakh shares or 0.88% stake in the company at Rs 2,749 per share.
Shares gained as much as 8.3% to Rs 2,994, its highest level in over two weeks. The stock has snapped a five-day losing streak.
Stock Reaction: Birla Corp
The company informed the exchanges over the weekend, about the order from a single-judge bench of the Calcutta High Court.
The High Court in its order, in a probate proceeding to which the company is not a party, has inter-alia restrained Harsh Lodha, the company's non-executive Director and Chairman of the company from holding any office in the company.
The cement-maker said that it is in the process of reviewing the court order.
Shares fell as much as 8% to Rs 661, post the announcement.
Markets At 10:20 A.M.
- Benchmark indices fluctuate between gains and losses during the first hour of trade
- Nifty down 0.2% at 11,486
- Sensex down 0.1% at 38,805
- Nifty Bank down 0.7% at 21,883
- Nifty Midcap index down 0.6%
- Nifty Smallcap Index down 0.5%
- India Volatility Index up 2.3% at 20.5
- Nifty I.T. is the top sectoral gainer; up 1.9% and is up for the eighth straight session. This is the longest winning streak for the index since February 2019 and is trading at an all-time high.
- All other sectoral indices - Auto, FMCG, Metal, Pharma, PSU Bank and Realty down over 1% each
- HCL Technologies is the top sectoral gainer; up 4.4%
- Top five gainers on the Nifty 50 index are I.T. stocks
- Tata Motors is the top Nifty laggard; down 2.9%
- 652 stocks on the NSE trade with gains while 1,040 are declining
Money Market Update
The currency has opened little changed in today's trading sessio after ending as the second worst performing currency in Asia last week.
The rupee opened at 73.42 against the U.S. Dollar as compared to Friday's close of 73.45.
Yield on the 10-year government bond opened at 6.006% as compared to Friday's close of 6.015%.
Sovereign bond traders today will focus on the government's plan to convert debt worth Rs 24,000 crore.
The government is looking to switch bonds maturing in 2021 and 2022 into those maturing in 2031, 2033 and 2060.
According to JM Financial, the rally isn't strong as the market is fearful of higher government borrowings going ahead.
Strong Listing: Route Mobile
Route Mobile Ltd. listed on the bourses at a 110% premium to its issue price after investors piled into share sales of companies expected to gain from rapid adoption of digital services.
The stock of the Mumbai-based email, voice, messaging and analytics services provider opened at Rs 733.95 compared with an issue price of Rs 350.
Route Mobile's initial public offering was subscribed 74.36 times on the final day of bidding on Sept. 11. The issue received 89.23 crore bids against the 1.2 crore shares on offer.
As many as 15 anchor investors, including SBI Mutual Fund, Nippon India, ICICI Prudential, Goldman Sachs, Franklin Templeton, Kuwait Investment Authority, among others, were allotted 51.43 lakh shares at Rs 350 apiece aggregating to Rs 180 crore, ahead of the IPO.
Coronavirus India Update
- Third straight day of higher recoveries compared to confirmed cases
- 86,961 new cases reported over the last 24 hours
- Lowest new virus cases in six days
- Total confirmed cases now at 54,87,580
- Active cases now at 10,03,299
- Patients cured / discharged / migrated at 43,96,399
- Death toll rises to 87,882
- 1,130 deaths reported in the last 24 hours
- 93,356 patients recovered over the last 24 hours
Brokerage Reaction: Media Stocks
Companies like Zee TV, Dish TV, Sun TV, Jagran Prakashan and DB Corp are trading with gains today after bullish commentary from brokerage firm CLSA.
CLSA in its note has pointed out that advertising revenue for companies is back to 80% of pre-covid-19 levels and is likely to see a year-on-year growth in H2FY21.
Subscription revenue for top broadcasters too witnessed growth, the note said.
The company has maintained its buy rating on Zee Entertainment over improving governance and compelling valuations, raising its price target on the stock to Rs 280 from Rs 255.
The firm has highlighted Sun TV has the other top pick from the sector, maintaining its buy rating on the stock and raising its price target to Rs 590 from Rs 490.
CLSA has also raised price targets on stocks like Dish TV, Jagran Prakashan and DB Corp.
Stock Reaction:
- Zee Entertainment: Shares gained as much as 2% to Rs 224.8.
- Sun TV: Shares gained as much as 4.6% to Rs 506.9. The stock trades at the highest level in seven months. It is also the top gainer on the Nifty Media index.
Stock Reaction: GOCL Corporation
The company has informed the exchanges that the Board of Directors of its U.K. subsidiary HGHL Holdings, decided to divest 2 lakh shares of Quaker Houghton at a price of $175 per share.
HGHL Holdings has beneficial interest of 4,27,395 shares of common stock of Quaker Chemical Corporation / Quaker Houghton, U.S.A., the company said in an exchange filing.
The total of the divestment will be $35 million or approximately Rs 257 crore. The company has pegged $1 at Rs 73.44 to arrive at the consideration in Indian rupees.
There will be no tax implication on HGHL under the transaction, the company said.
The company's investment in HGHL currently stands at 1 lakh pounds.
Shares gained as much as 12.5% to Rs 207. The stock has snapped a three-day losing streak.
Stock Reaction: HCL Technologies
The technology company announced its intent to acquire DWS Ltd. - a leading Australian I.T., business and management consulting group.
The acquisition will be done at a price of 1.20 Australian Dollars per share. The total equity payout stands at 158.2 million Australian Dollars.
The acquisition will be done by a process of Scheme of Arrangement, which will be approved by the courts in Australia.
The transaction is expected to be completed in December 2020, the company said in an exchange filing.
It will also be subject to approvals of the Australian Foreign Investment Review Board, Australian Competition Commission and New Zealand's Overseas Investment Office.
The company said that this will strengthen its leadership position as the strategic innovation partner of choice in Australia and New Zealand.
Shares gained as much as 3.8% to an all-time high of Rs 841.2. The stock is up for the third straight day and is the top gainer on the Nifty 50 index.
Opening Bell: A Flat Start
Indian equity markets have opened little changed at the start of the expiry week trade for the September series. Benchmark indices are flat owing to lack of directional cues from Asia and fluctuation in the U.S. Futures.
The S&P BSE Sensex opened 0.1% lower at 38,812 while the NSE Nifty 50 was unchanged at 11,503. Both indices saw modest gains last week.
The Media index is the top sectoral gainer, opening with gains of 0.9%. Rest of the indices have opened flat. The Nifty Bank has opened 0.2% lower while the realty index has gained 0.2%.
Smallcaps are outperforming the benchmarks at the start of trade. The index has opened 0.4% higher while the midcap index has opened flat.
Market breadth is in favour of the gainers. 970 stocks on the NSE trade with gains while 538 have opened with losses.
Trading Strategies For The Day
- Nifty: Sell 11,650 Call of the September 24 expiry in the range of Rs 32-34. Target of Rs 18=10 and stop loss of Rs 48.
- Nifty Bank: Sell in the range of 21,950-22,000 for target of 21,800-21,700 and stop loss of 22,100
- Buy Grasim September futures for target of Rs 756 and Rs 771 with a stop loss of Rs 736
- Sell Bajaj Finance September futures for target of Rs 3,441 and Rs 3,387 and stop loss of Rs 3,513
- Both Grasim and Bajaj Finance are intraday recommendations
Source: ICICI Securities
How Did The Fund Flows Fare On Friday
Key Stocks In Focus
- HCL Technologies: Announces intent to acquire leading Australian I.T. solutions company DWS Ltd. This will strengthen the company's leadership position as a strategic innovation partner of choice in the markets of Australia & New Zealand. The DWS group had FY20 revenue at 167.9 million Australian Dollars. The transaction is expected to close in December 2020, subject to closing conditions including regulatory approvals.
- RITES: Board approves share buyback of up to 96.98 lakh shares or 3.88% of the total equity at Rs 265 per share. The buyback price is a 3.8% premium to Friday's closing price. Record date for the Rs 257 crore buyback is set as September 30.
- South Indian Bank: Reduces base rate by 10 basis points to 9.75%. MCLR across various tenors too has been cut from September 20. One-Month MCLR now at 7.85% while one-year MCLR at 8.2%.
- BSE: Arbitration Tribunal declares the termiation of the agreements entered into with Dow Jones as invalid and has ordered that it shall continue to remain in force and effect. The award is being reviewed and shall be dealt with suitably as per advice of the legal counsel.
- Amber Enterprises: Acquired 20% stake in Sidwal Refrigerations Industries, which has now become a wholly-owned subsidiary of the company.
- Route Mobile: To list on the bourses today.
- CAMS: IPO opens for subscription today. The company has raised Rs 666 crore from anchor investors ahead of the IPO.
- Chemcon Speciality Chemicals: Anchor allotment of 28.06 lakh shares at Rs 340 per share worth Rs 95.4 crore. The IPO opens for subscription today.
To know more about the stocks in focus, and key brokerage updates, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
September Series Expiry Week
Good Morning!
This week will mark expiry of the September F&O series. Indian equity markets have remained largely range-bound during the period. As of closing on Friday, the Sensex and the Nifty 50 were down 0.7% and 0.5%, respectively.
Futures are indicating a flat start to today's session. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,502 as of 7:15 a.m. on Monday.
A flurry of IPOs will be in focus today. After the bumper listing of Happiest Minds Technologies on Thursday, Route Mobile will debut today. The issue was subscribed 74 times on the final day of bidding.
Two new issues open for subscription—Warburg Pincus-backed Computer Age Management Services or CAMS and Chemcon Specialty Chemicals.
Asian markets are drifting at the start of trade after a weak session on Wall Street. Benchmarks in South Korea and Australia are little changed, while those in Japan are shut on account of a holiday.
Futures on the Dow Jones are fluctuating, currently trading 30 points higher. The index ended nearly 1% lower on Friday.
West Texas Intermediate crude fell 0.8% to $40.78 per barrel, while gold traded at $1,950/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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