KEY HIGHLIGHTS
Closing Bell: Sixth Day Of Gains
Indian equity markets ended higher for the sixth straight day as benchmark indices ended at their highest level in six months.
The S&P BSE Sensex ended 0.9% higher at 39,467 while the NSE Nifty 50 index ended below the mark of 11,650 - up 0.76% at 11,647.
Both Sensex and Nifty posted their second straight weekly advance.
Banks - both private and PSU were the outperformers in today's session. The PSU Bank index ended 5.1% higher while the Nifty Bank gained nearly 1,000 points, ending with gains of 4.2%. The Nifty Bank has gained over 2,500 points in the last six trading sessions.
The Nifty Media index was the other major sectoral gainer; ending 1.8% higher.
Nifty Auto was the top sectoral laggard, ending 0.8% lower. FMCG and Metal indices were the other underperformers.
Broader markets were mixed in today's session. The midcap index (up 0.6%) ended higher for the 10th straight day - its longest winning streak since August 2018. However, the Smallcap index ended 0.2% lower, snapping a nine-day winning run.
India Volatility Index fell another 3.4% to end at 18.25.
Market breadth turned adverse with 1,084 stocks on the NSE posting losses while 745 stocks ended with gains.
Decoding The Markets This Week
Buzzing Stock: PVR
- Trades at a five-month high
- Gains as much as 10% to Rs 1,469
- Biggest single-day gain in nearly three months
- Up for the fifth straight day
- Today's volumes are 74% higher than its 20-day average
- Breaks above its 200-Day Moving Average of 1,389
- Stock in overbought territory with Relative Strength Index (RSI) at 81
- Has doubled from its 52-week low of Rs 705 on May 19, 2020
- 18 out of the 28 analysts tracking the stock have a buy recommendation; 4 sell calls
- The stock trades 14.3% higher than its 12-month consensus price target of Rs 1,236, implying a negative return potential
Future Group Stocks Buzzing
- Future Retail: Gains as much as 7.9% to Rs 140.3. The stock trades at the highest level in nearly two months.
- Future Enterprises: Locked in an upper circuit of 5% at Rs 20.2. Trades at the highest level in five months. Up for the fourth straight day.
- Future Lifestyle: Locked in an upper circuit of 5% at Rs 145.7. Up for the fourth straight day and trades at the highest level in nearly two months.
- Future Consumer: Gains as much as 4.8% to Rs 11.5. Up for the fourth straight day.
Buzzing Stock: Mahindra Logistics
- Among top performers on the BSE Smallcap index
- Gains as much as 9.1% to Rs 398
- Trades at the highest level in six months
- Has declined only twice in the last 10 trading sessions
- Up 35% in the last ten trading sessions
- Broke above its 200-Day Moving Average at 330 on August 20, up 20% since then
- Today's volumes are 60% below its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 78
- Has doubled from its 52-week low of Rs 199 on March 25, 2020
- 11 out of the 15 analysts tracking the stock have a buy recommendation; 1 sell call
- The stock trades 13.7% higher than its 12-month consensus price target of Rs 322.7, implying a negative return potential
Gold Rebounds As Investors Weigh Fed's New Approach
Gold prices recovered from Thursday's drop as the U.S. Dollar weakened and investors weighed the impact of the Federal Reserve's new approach to setting U.S. Monetary policy.
"Higher inflation tolerance and low interest rates should see U.S. real yields fall in the medium to long-term, which is supportive for gold," according to Vivek Dhar of Commonwealth Bank of Australia.
Gold currently trades 1.5% higher at $1,960/Oz, while the Bloomberg Dollar Spot Index fell as much as 0.7% to the lowest since May 2018.
Buzzing Stock: Sun Pharma
- Third best performer on the Nifty 50 index
- Gains as much as 6% to Rs 564
- Biggest single-day gain in four months
- Trades at the highest level since November 2018
- Gains for the third straight day
- Longest winning streak in a month
- Today's volumes are nearly triple its 20-day average
- Set for third straight weekly gain
- 20% of the 1.8 crore shares traded on the stock are marked for delivery as of 2 P.M.
- Heads towards overbought territory with Relative Strength Index (RSI) at 69
- Has gained 79.5% from its 52-week low of Rs 312 on March 30, 2020
- 25 out of the 39 analysts tracking the stock have a buy recommendation; 9 sell calls
- The stock trades 1.1% higher than its 12-month consensus price target of Rs 555.9
- Alert: Shares of subsidiary Sun Pharma Advanced Research Company too are trading at a six-month high, gaining as much as 7.1% to Rs 195.45.
Media Index Poised For Fourth Straight Weekly Gain
Buzzing Stock: Ramco Systems
- Trades at the highest level since January 2019
- Locked in an upper circuit of 5% at Rs 270.6
- Up for the ninth straight day
- Longest winning streak since January 2014
- Seven out of the last nine days of gains have been 5% upper circuits
- Has declined only once in the last 18 trading sessions
- Has doubled in the last 18 trading sessions
- Has more than quadrupled from its 52-week low of Rs 64 on March 25, 2020
- The stock trades 7.6% higher than its 12-month consensus price target of Rs 250, implying a negative return potential
Markets At 2:10 P.M.
- Benchmark indices hold gains; set for second straight weekly gain
- Nifty up 0.73% at 11,644
- Sensex up 0.9% at 39,452
- Nifty Bank up 2.9% at 24,290
- Nifty Midcap index up 0.65%
- Nifty Smallcap index down 0.15%
- India Volatility Index down 0.6% to 18.79
- PSU Bank index remains the top sectoral gainer; up 3.8%
- Nifty Media is the other major sectoral gainer; up 1.4%
- Nifty Auto, Nifty FMCG and Nifty Metal are the sectoral laggards
- Axis Bank remains the top Nifty gainer; up 6.6%
- JSW Steel remains the top Nifty laggard; down 2.9%
- 762 stocks on the NSE trade with gains while 1,016 stocks decline
Money Market Update
The currency saw yet another day of strong gains, falling below its 200-Day Moving Average for the first time in a year.
The rupee ended at 73.40 against the U.S. Dollar as compared to Thursday's close of 73.81.
This was the third straight day of gains for the currency. The rupee was the best performing currency in Asia for the second straight day.
On a weekly basis - the 2% gain in the currency was the best week since December 2018. It was also the best performing currency in Asia for the week.
The rupee now trades at the highest level in six months.
Yield on the 10-year government bond ended at 6.185% as compared to Thursday's close of 6.153%.
Active Stock Options
- Axis Bank's 500 Call: Premium up 112% to Rs 26. The contract has added 295 shares in Open Interest.
- ICICI Bank's 420 Call: Premium up 75.2% to Rs 10.9. The contract has added 51 shares in Open Interest.
- IndusInd Bank's 640 Call: Premium up 41.4% to Rs 38.6. The contract has shed 115 shares in Open Interest.
Stock Reaction: ITI
The state-run company has informed the exchanges that it is mulling various options in order to comply with SEBI's minimum 25% public shareholding guidelines.
The deadline for the company to comply with the guidelines is August 3, 2021, according to its exchange filing.
The press statement said that it is exploring feasibility of various options including offer of shares to the public within the prescribed time limit.
Shares gave up gains of as much as 5.4% to trade 1% higher at Rs 137.4, post the announcement.
F&O Snapshot: Active Options contracts
- Nifty September futures add 13.3% and 20,830 shares in Open Interest.
- Nifty Bank September futures add 37.9% and 19,292 shares in Open Interest.
Nifty: September 3 Expiry
- 11,700 Call: Premium up 29.5% to Rs 55.8. The contract has added 9,147 shares in Open Interest.
- 11,600 Put: Premium down 31.8% to Rs 81.55. The contract has added 22,243 shares in Open Interest.
- 11,600 Call: Premium up 26.1% to Rs 107.5. The contract has added 5,430 shares in Open Interest.
Nifty Bank: September 3 Expiry
- 24,500 Call: Premium up 205.1% to Rs 213.9. The contract has added 14,862 shares in Open Interest.
- 25,000 Call: Premium up 179% to Rs 82.1. The contract has added 18,815 shares in Open Interest.
- 24,000 Call: Premium up 159.5% to Rs 459. The contract has shed 5,449 shares in Open Interest.
Buzzing Stock: Sundaram Finance
- Among top performers on the Nifty 500 index
- Gains as much as 10.6% to Rs 1,665
- Biggest single-day gain in two months
- Trading at the highest level in six months
- Up for the second straight day
- Has gained in four out of the last five trading sessions
- Today's volumes are seven times higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 86
- Broke above its 200-Day Moving Average of 1,425 on Monday; up 17% since then
- Up 69% from its 52-week low of Rs 982 on March 25, 2020
- Four out of the six analysts tracking the stock have a buy recommendation; 1 sell call
- The stock trades 11.5% higher than its 12-month consensus price target of Rs 1,460.6, implying a negative return potential
European Stocks Open Higher
Markets in Europe opened flat but with a positive bias. Banking and auto stocks are leading the gains.
The Stoxx 600 has opened 0.2% higher and is poised for weekly gains. Retail and technology stock are the top laggards.
Asian markets have ended mixed, while futures on the Dow Jones are trading higher by 150 points.
Brent crude trades 0.2% lower at $45 per barrel while gold is trading 1% higher at $1,950.1/Oz.
Let's take a look at how benchmarks across Europe have opened:
- Euro Stoxx 50 up 0.2% at 3,336
- DAX up 0.2% at 13,117
- CAC up 0.2% at 5,027
- FTSE 100 up 0.4% at 6,022
- IBEX 35 up 0.4% at 7,114
How Are The Sectoral Indices Faring
41st GST Council Meet
Buzzing Stock: Shriram Transport Finance
- Among top performers on the Nifty 500 index
- Gains as much as 8% to Rs 777.85
- Biggest single-day gain in four months
- Trades at the highest level in four months
- Set for third straight weekly advance
- Today's volumes are more than double its 20-day average
- 50-Day Moving Average of 686 acting as strong support
- Heading towards overbought territory with Relative Strength Index (RSI) at 69
- Has gained 79% from its 52-week low of Rs 428.7 on March 23, 2020
- 32 out of the 40 analysts tracking the stock have a buy recommendation; 2 sell calls
- Return potential of the stock as per Bloomberg data is 7%
Nifty Bank Up 2,500 Points In Six Sessions
Markets At Noon
- Benchmark indices surge to the day's high
- Nifty up 0.94% at 11,668
- Sensex up 1.04% at 39,521
- Nifty Bank up 3.4% at 24,397
- Nifty Midcap index up 0.9%
- Nifty Smallcap index up 0.3%
- India Volatility Index down 1.6% to 18.59
- Nifty PSU Bank remains the top sectoral gainer; up 4.1%
- Nifty Media is the other sectoral gainer; up 1.6%
- Nifty Auto is the only sectoral laggard; down 0.43%
- Axis Bank remains the top Nifty gainer; up 7%
- JSW Steel is the top Nifty laggard; down 1.7%
- 943 stocks on the NSE trade with gains while 780 decline
Buzzing Stock: Federal Bank
- Top gainer on the Nifty Bank index
- Gains as much as 9% to Rs 61.1
- Biggest single-day gain in four months
- Trades at the highest level in five months
- Set for second straight weekly gain
- Today's volumes are five times higher than its 20-day average
- Moving towards its 200-Day Moving Average at 65.3
- Stock in overbought territory with Relative Strength Index (RSI) at 72
- Has gained 71% from its 52-week low of Rs 35.7 on March 25, 2020
- 34 out of the 40 analysts tracking the stock have a buy recommendation; 3 sell calls
- Return potential for the stock as per Bloomberg data is 8.5%
Stock Reaction: Dr Reddy's Laboratories
The drugmaker has informed the exchanges that it has addressed the violations and deviations highlighted by the U.S. FDA in its warning letter for three of its facilities.
The U.S. FDA in November 2015 had issued a warning letter to the company's API manufacturing facilities at Srikakulam, Miryalguda and Duvadda.
Shares briefly recovered from the day's low, after declining as much as 1.1% to Rs 4,389.
Refiners Stop Buying Oil From Chinese Companies
India's state refiners have stop buying crude from Chinese companies following new trade curbs after relations deteriorated between the two countries, people familiar with the matter told Bloomberg.
The government gave refiners a directive to ban Chinese companies from participating in tenders for crude purchases unless they are registered with the Ministry of Commerce.
The crude supplied by Chinese firms is usually sourced from other regions such as the middle east and West Africa.
Spokespersons for the three refiners - HPCL, BPCL and IOC refused to comment on this story.
Buzzing Stock: Vodafone Idea
- Stock back in double digits
- Top performer on the Nifty 500 index
- Gains as much as 16.4% to Rs 10.3
- Biggest single-day gain in two months
- Trades at the highest level in two months
- Snaps three-day losing streak
- Today's volumes are seven times higher than its 20-day average
- Breaks above its 50-Day Moving Average at 9.1
- 2 out of the 19 analysts tracking the stock have a buy recommendation; 10 sell calls
- The stock trades 27.7% higher than its 12-month consensus price target of Rs 7.3, implying a negative return potential
Brokerage Reaction: Indian Hotels
Shares of the hotel company are surging in today's session after Antique Stock Broking initiated coverage on the stock with a buy rating and a price target of Rs 150.
Antique’s Rationale:
- Best play to navigate the current uncertainty
- Strong support from parent protects downside risk for the company
- Better placed structurally - should gain market share amid slowdown
- Balance sheet discipline remains strong
- Expect to maintain a valuation premium to peers due to strong brand
Shares gained as much as 5.4% to Rs 112.5. The stock is up for the fifth straight day and is trading at the highest level in five months.
Sixth Day Of Gains For The PSU Bank Index
Stock Reaction: Wendt
Shares of the product manufacturer for the diamond processing industry are rising in today's session after Plutus Wealth Management bought stake in the company.
The fund house acquired 13,040 shares in the company, amounting to a 0.65% stake at Rs 3,800.12 per share.
Shares gained as much as 10% to Rs 4,275.7, before cooling off. The stock is up for the tenth straight day, its longest winning streak since July 2017.
The stock is trading at the highest level since January 2018.
Buzzing Stock: Axis Bank
- Top gainer on the Nifty 50 index
- Gains as much as 7.7% to Rs 509.7
- Biggest single-day gain in three months
- Trades at the highest level in five months
- Gains for the sixth straight day
- Longest winning streak since October 2017
- Up 17% in the last six trading sessions
- Today's volumes are almost triple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 72
- Has nearly doubled from its 52-week low of Rs 285 on March 25, 2020
- 43 out of the 57 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 8.1%
Stock Reaction: Steel Strips Wheels
The company informed the exchanges that it has received an order of nearly 37,000 wheels from the EU Caravan Trailer market.
The order is worth 2.53 lakh Euros, according to the company's exchange filing.
The order will be executed in the months of November and December from its Chennai plant.
Shares gained as much as 3.85% to Rs 495 and are rising for the third straight day. The stock is trading at the highest level in over five months.
Stock Update: ICICI Bank
The private lender has informed the exchanges that it has completed the sale of 64.42 lakh shares of its subsidiary ICICI Securities through an open market sale.
The 2% stake in the company was sold by ICICI Bank for a total consideration of Rs 310 crore, according to the bank's exchange filing.
The lender had to pare stake in ICICI Securities in order to comply with minimum public shareholding norms.
The bank said that its stake in its subsidiary now stands at 77.22%, post the divestment.
Shares of ICICI Bank gained as much as 2.6% to Rs 402.6 and are rising for the sixth day in a row. The stock is trading at the highest level in five months.
Shares of ICICI Securities pared some intraday gains and are now trading 1% higher at Rs 496.3.
Markets At 10:10 A.M.
- Benchmark indices gain for the sixth straight day
- Nifty up 0.47% at 11,613
- Sensex up 0.5% at 39,309
- Nifty Bank up 1.44% at 23,939
- Nifty Midcap index up 0.8%
- Nifty Smallcap index up 0.6%
- India Volatility Index down 2.8% to 18.36
- Nifty PSU Bank is the top sectoral gainer; up 3.4%
- Nifty Media is the other major sectoral gainer; up 1.6%
- Nifty Metal, Nifty Realty up 1% each
- Axis Bank is the top Nifty gainer; up 4.2%
- Tata Motors is the top Nifty laggard; down 1.6%
- 1,078 stocks on the NSE trade with gains while 574 decline
Money Market Update
The currency opened flat in today's trading session after it ended at the highest level in five months on Thursday.
The rupee opened at 73.84 against the U.S. Dollar as compared to Thursday's close of 73.81. The currency was the best performer in Asia on Thursday.
The rupee is headed for its best week in four months as the central bank stayed away from dollar purchases amid lumpy inflows, Bloomberg News reports.
Within the bond markets, the traders are increasingly concerned that the RBI's rate cycle may be ending.
The weekly bond auction worth Rs 30,000 crore will take place today.
Buzzing Stock: Canara Bank
- Top gainer on the Nifty PSU Bank index
- Gains as much as 5.5% to Rs 111.4
- Biggest single-day gain in two months
- Trades at the highest level in two months
- Snaps two-day losing streak
- Today's volumes are more than double its 20-day average
- Stock bounces after taking support at 50-Day Moving average of 103.7
- Has gained 51% from its 52-week low of March 24, 2020
- Three out of the 18 analysts tracking the stock have a buy recommendation; 10 sell calls
- The stock trades 17% higher than its 12-month consensus price target of Rs 91.5, implying a negative return potential
Earnings Reaction: NMDC Q1FY21
The mining company reported a 41% decline in its June-quarter revenue to Rs 1,937.5 crore. The company's net profit more than halved year-on-year to Rs 533 crore.
Ebitda fell nearly 60% while margins contracted to 39% from 57.2% last year.
The company in its post earnings release said that it lost sales of over 23 lakh tonnes due to Covid-19, resulting in an overall revenue loss of Rs 737 crore during the April-June period.
The company's revenue from the Iron Ore business fell 40% while other businesses saw a revenue decline of over 70% from the previous year.
Overall sales of the company declined 28% to 62.75 lakh tonnes.
Shares gained as much as 10% - the most since February 2016 to Rs 105.7. The stock is trading at the highest level in over six months.
Coronavirus India Update
- India reports biggest single-day increase in new cases for the second straight day
- 77,266 new cases reported over the last 24 hours
- Highest number of cases ever recorded in a day by any country since the start of the outbreak
- Total cases now at 33,87,500
- Active cases now at 7,42,023
- Patients cured / discharged / migrated at 25,83,948
- Death toll rises to 61,529
- 1,057 deaths reported in the last 24 hours
- 60,177 patients recovered in the last 24 hours
Stock Reaction: GMR Infra
The company received approval from its board to spin-off its non-airport business into a separate entity.
The aim of the move is to simplify the company's corporate holding structure, as per its exchange filing.
The company will become a pure-play airports company after the de-merger.
GMR Power and Urban Infra will have a mirror shareholding. The shareholders will get one share of GMR Power and Urban Infra of Rs 5 face for every 10 held in GMR Infra each of Re 1 face .
The company reported a net loss of Rs 834 crore for the quarter ended June.
1.65 crore shares of the company have exchanged hands in five large trades in today's session, as per Bloomberg data. Buyers and sellers in the trades remain unknown.
Shares gained as much as 9.9 to Rs 28.25. The stock is trading at the highest level since August 2014.
Opening Bell: A Steady Start
Indian equity markets opened with gains despite mixed global cues. Benchmark indices have opened higher for the sixth straight day.
The S&P BSE Sensex opened 0.4% higher at 39,264 while the NSE Nifty 50 index opened above the mark of 11,600 - up 0.4% at 11,602.
As of closing on Thursday, both Sensex and Nifty had gains of over 1.5% each on a weekly basis.
All sectoral indices have opened with gains. The PSU Bank index has opened 1% higher, as have the Media and Pharma indices, which gained 0.9% in the early minutes of trade.
Broader markets continued their winning run. The midcap index opened 0.7% higher while the smallcap index gained 0.6%.
1,104 stocks on the NSE have opened with gains while 224 stocks are declining.
Latest On The Coronavirus
- Global cases rise to 24.3 million
- Death toll rises to 8.28 lakh
- Death toll in the U.S. crosses 1.8 lakh
- Indonesia extends social distancing rules in Jakarta after 760 cases reported
- South korea extends level-2 social distancing by one week
- 44,235 new cases reported in Brazil, 984 deaths reported
- Overall cases in the U.S. rise 0.8%
- Ireland reported 93 new cases with no deaths on Thursday
- Spain reports 3,781 new cases - the most since April 23
- Italy reports 1,411 new cases - the most since May 6
- Manchester United's Paul Pogba tests positive for Covid-19
How Did The Fund Flows Fare On Thursday
Key Stocks In Focus
- GMR Infra: Announces strategic group restructuring to separate non-airports business into a separate unit. Approves amalgamation of GMR Power Infra with itself, followed by demerging its energy, EPC and urban infra business to its wholly-owned arm GMR Power and Urban Infra. The move will make GMR Infra a pure play airports player. For every 10 equity shares of face of Re 1 held in GMR Infra, one equity share of face of Rs 5 in GMR Power and Urban Infra will be issued to shareholders. The non-airports business will be separately listed. Appointed date for this scheme is April 1, 2021. The board has also approved raising Rs 5,000 crore through issue of securities.
- HDFC Bank, Kotak Bank & IndusInd Bank will not be included by the FTSE Russel in its indices as they fail to meet the minimum foreign headroom requirement.
- Edelweiss Financial Services: Board approves divesting majority (51%) stake in the company's wealth management business to private investment firm PAGAC. The board has also given in-principle approval for the sale of whole or part of the asset management business of the group to a strategic investor and to explore fund raising opportunities, including option to raise capital from the strategic investors for the group's general insurance business. The wealth management business will be demerged and subsequently listed, subject to approvals.
- Allcargo Logistics: Board has considered the delisting proposal and has appointed Inga Ventures as the merchant banker. After receipt of the due diligence report from the merchant banker, the board will meet again to discuss the delisting proposal in detail.
- NMDC: Board has given in-principle approval for the proposal to demerge its Iron & Steel Plant in Nagarnar, Chhattisgarh.
- HCC: Won three projects worth Rs 7,402 crore which were won in a joint venture in the months of July and August. Company’s share in these orders are Rs 3,337 crore.
- Non-Nifty Earnings Today: Apex Frozen Foods, Filatex, Khadim, SJVN.
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
Another Weekly Advance In Store
Good Morning!
The Sensex and Nifty saw their third consecutive F&O series gain in August, each up nearly 4%. The Nifty Bank was the outperformer, with gains of 9%.
So far this week, the equity benchmarks have risen more than 1.5%, but broader markets have been outperforming.
Futures are indicating a flat start to the final trading day of the week. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.24% to 11,624 as of 7:00 a.m. on Friday.
Asian markets are mixed. Stocks in Japan and South Korea are rising, while those in China and Australia slipped.
Treasury yields jumped after Jerome Powell said the Federal Reserve will remain accommodative and shift to a more relaxed approach on inflation.
Futures on the Dow Jones are trading higher by 100 points. The index had ended 0.6% higher on Thursday.
West Texas Intermediate crude fell 0.4% to $42.88 per barrel, while gold was flat at $1,926.8/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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