KEY HIGHLIGHTS
Closing Bell: Fourth Day Of Losses
Indian equity markets ended off the lowest point of the day but ended with declines for the fourth straight session, in-line with the global sentiment.
The S&P BSE Sensex ended 0.8% lower at 37,734 while the NSE Nifty 50 index fell 0.9% to 11,153.
This is the longest losing streak for the benchmark indices in nearly two months. Both Sensex and the Nifty have ended at their lowest level since August 5 this year.
I.T. and Pharma stocks cushioned the losses seen by the benchmark indices. Both sectoral indices were the only sectoral gainers in today's trading session. Both the indices ended with gains of 0.7% each. Top three gainers on the Nifty 50 index were I.T. stocks.
The top sectoral laggard today was the media index, ending lower by 2.6%, led by losses in Zee Entertainment, which was also the top laggard on the Nifty 50 index.
Other laggards were the Nifty Realty and the Nifty Auto index which ended over 1.5% lower. The Nifty Bank and Nifty Metal fell over 1%, while the FMCG index declined 0.8%.
Broader markets too recovered from the day's low but underperformed the benchmark indices yet again. The midcap index fell 1.5% while the smallcap index ended with losses of 1.7%.
India Volatility Index ended 4.9% lower at 21.1.
Market breadth remained in favour of the laggards. 1,382 stocks on the NSE ended with cuts while 458 managed to buck the trend.
How Did The Sectoral Indices Fare
Stock Reaction: Hindustan Zinc
The company's committee of directors have considered and approved offering up to 40,000 unsecured, rated, listed, redeemable Non-Convertible Debentures (NCDs).
The NCDs will be of face of Rs 10 lakh each and will be issued on a private placement basis, the company said in an exchange filing.
The total issuance is worth Rs 4,000 crore, including the option to retain oversubscription of up to Rs 1,000 crore, the company said.
Shares gained as much as 2.4% to Rs 211 and have snapped a six-day losing streak.
Buzzing Stock: Manappuram Finance
- Falls as much as 7.5% to Rs 144.65
- Biggest single-day drop in nearly two months
- Down for the second straight day
- Has declined 10% in the last two trading sessions
- Breaks below 100 and 200-Day Moving Average at 149.1 and 149.8 respectively
- Today's volumes are 46% higher than its 20-day average
- Has declined 26% from its 52-week high of Rs 194.8 on January 29, 2020
- Nine out of the 13 analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential of the stock as per Bloomberg data is 31.7%
Stock Reaction: Blue Dart Express
The company has announced that a General Price Increase (GPI), effective January 1, 2021.
The average shipment price will increase by 9.6% as compared to that in 2020 and dependant on the shipping profile, the company said in a statement.
Customers signing up from October 1 to December 31, 2020 will not be impacted by the price rise, the company said.
"The General Price Increase will account for the cost we have incurred and invested in our infrastructure and technology to provide our customers with the best experience," Balfour Manuel, the company's Managing Director said in a statement.
Shares rose as much as 6.1% to Rs 2,754, before cooling off. The stock currently trades 2% higher at Rs 2,647.
Stock Reaction: Power Finance Corporation
The company has released an FAQ where it talks about some of the recent developments pertaining to itself.
It has clarified that it has no plans to launch any Follow On Public Offer (FPO) in the near future. "We believe that PFC's capital levels are adequate to take care of our asset side risks and future growth," the statement said.
The company also clarified that it has not introduced any new buyback or exit option, nor has it appointed any agency to offer such a buyback / exit option on its bond issuances, including infrastructure bonds.
The company has estimated additional funding requirement to the tune of Rs 30,000 crore to Rs 35,000 crore in the near future.
Shares are off the day's low, after falling as much as 3% to Rs 85.90. The stock is down for the fourth straight day and trading at the lowest level in over a month.
Active Stock Options
- Reliance Industries' 2,300 Call: Premium down 65.3% to Rs 6.45. The contract has shed 42,925 shares in Open Interest.
- TCS' 2,500 Call: Premium up 121.6% to Rs 47.65. The contract has shed 3.5 lakh shares in Open Interest.
- Dr Reddy's 5,300 Call: Premium down 50.4% to Rs 30.1. The contract has added 37,750 shares in Open Interest.
Buzzing Stock: Astral Poly Technik
- Down for the sixth straight day
- Longest losing streak since May 2019
- Falls as much as 6.8% to Rs 1,026
- Biggest single-day drop in six months
- Has declined 12% in the last six trading sessions
- Today's volumes are 26% below its 20-day average
- Breaks below its 200-Day Moving Average of 1,037
- Has declined 22% from its 52-week high of Rs 1,314.7 on September 8, 2020
- 11 out of the 23 analysts tracking the stock have a buy recommendation; 6 sell calls
- The stock is 6.3% higher than its 12-month consensus price target of Rs 1,019.9, implying a negative return potential
Stock Reaction: GE Power India
The company's parent General Electric announced that it intends to exit the new build coal power market, subject to applicable consultation requirements.
GE said that it will continue to focus on and invest in its core renewable energy and power generation business.
GE Power India said that it is currently examining the implications of General Electric's decision. The company will continue to focus on its efforts on maintaining its business in India aligned with the local market dynamics.
Shares fell as much as 9.5% to Rs 410.8, down for the fifth straight day. The stock is trading at the lowest level in three months.
Markets At 2:25 P.M.
- Benchmark indices resume declines after paring losses in mid-day trade
- Nifty down 1% at 11,134
- Sensex down 0.93% at 37,681
- Nifty Bank down 1.3% at 21,098
- Nifty Midcap index down 1.8%
- Nifty Smallcap index down 2%
- India Volatility Index down 1.2% at 21.92
- Nifty I.T. remains the only sectoral gainer; up 0.8%
- Nifty Media is the top sectoral laggard; down 3%
- Nifty Realty, Nifty Auto decline 2% each
- Nifty PSU Bank, Nifty Metal down close to 2% each
- Nifty FMCG, Nifty Pharma down 1.2% and 0.8% respectively
- TCS is the top Nifty gainer; up 2.3%
- Three out of the top four Nifty gainers are I.T. stocks
- Zee Entertainment remains the top Nifty laggard; down 6%
- 44 out of the 50 Nifty constituents decline
- 1,469 stocks on the NSE trade with losses while 346 buck the trend
Reliance Plans Big Smartphone Push
Reliance Industries has asked local suppliers to ramp up production capacity in India, so that they can make as many as 200 million smartphones over the next two years, people familiar with the matter told Bloomberg News.
The company is in talks with domestic assemblers to make a version of its Jio Phone, that will run on Google's android and cost about Rs 4,000.
The phones will be marketed with low-cost wireless plans from Reliance Jio. Reliance is also aligning itself with the government's plan to build more domestic manufacturing, a possible boost for local assemblers like Dixon Technologies, Lava International & Karbonn Mobiles.
Representatives of Reliance Industries refused to comment on the story.
Shares of Reliance Industries fell as much as 2.42% to Rs 2,201 and are down for the second straight day.
Money Market Update
The currency ended with losses in today's session, in-line with the volatility seen in the equity markets.
The rupee ended at 73.58 against the U.S. Dollar as compared to Monday's close of 73.40. It ended near its intraday low of 73.63.
Seven other currencies managed to outperform the rupee in today's session.
Yield on the 10-year government bond ended at 6.004% as compared to Monday's close of 6.016%.
I.T. Index Resumes Gains
Tata Group Open To Buying Mistry Group Shares
Tata Group is open to buying the shares in Tata Sons held by the Shapoorji Pallonji Group to aid the latter's fund raising efforts, the Tata Group's counsel told the Supreme Court.
The Shapoorji Pallonji group hold close to 18% stake in Tata Sons. The offer to buy Mistry Group's shares will help stave off the possibility of Tata Sons' shares being pledged that run the potential risk of falling in the hands of unfriendly investors, Bloomberg News reports.
The Supreme Court will next hear the case on October 28.
F&O Snapshot: Active Options Contracts
- Nifty September futures add 10.8% and 8.8 lakh shares in Open Interest.
- Nifty Bank September futures add 20.1% and 3.1 lakh shares in Open Interest.
Nifty: September 24 Expiry
- 11,000 Put: Premium down 10.1% to Rs 25.4. The contract has added 12.7 lakh shares in Open Interest.
- 11,300 Call: Premium down 42.8% to Rs 46. The contract has added 19 lakh shares in Open Interest.
- 11,200 Put: Premium up 11.6% to Rs 84.5. The contract has added 9.4 lakh shares in Open Interest.
Nifty Bank: September 24 Expiry
- 21,000 Put; Premium up 1.5% to Rs 165.9. The contract has added 6.3 lakh shares in Open Interest.
- 21,500 Call: Premium down 20.6% to Rs 213.8. The contract has added 4 lakh shares in Open Interest.
- 22,000 Call: Premium down 33.2% to Rs 70.6. The contract has added 3.6 lakh shares in Open Interest.
Stock Reaction: UFO Moviez
The company has informed the exchanges about acquiring 100% stake in SAPJ Media and Entertainment for a sum of Rs 1 lakh.
The acquisition now makes SAPJ a subsidiary of the company.
The company has also proposed to make an additional investment of up to Rs 2.75 crore in SAPJ and a further investment of Rs 3.6 crore in PJSA, a wholly-owned subsidiary of the company.
SAPJ will launch pay-per view movies and streaming of live events along with OTT discovery for movies and web services around October 2020, the company said.
Shares gained as much as 3.75% to Rs 74.7, post the announcement. The stock has snapped a three-day losing streak.
European Markets Open Higher
Benchmark indices in Europe snapped a three-day losing streak to open higher in early trade, led by a rebound in technology shares.
The Stoxx 600 has opened 0.6% higher with retail stocks accompanying technology stocks in the gains. Travel & Leisure stocks continue to decline.
Asian markets ex-Japan have ended with losses while futures on the Dow Jones are trading lower by 60 points.
Brent crude trades 0.3% higher at $41.57 per barrel while Gold is down 0.55% at $1,900/Oz.
Let's take a look at how benchmark indices across Europe are trading:
- Euro Stoxx 50 up 0.65% at 3,181
- DAX up 0.7% at 12,628
- CAC up 0.5% at 4,813
- FTSE 100 up 0.54% at 5,835
- IBEX 35 up 0.7% at 6,738
How Are The Sectoral Indices Faring
Stock Reaction: TCS
The I.T. major has expanded its partnership with Morrisons - a leading supermarket chain in the U.K., through a five-year contract for application management services, data services and cyber security services.
As part of the expanded partnership, TCS will use AI and machine learning to augment human teams and boost productivity.
“We are using our deep contextual knowledge of Morrisons’ business and our expertise in AI and automation to reimagine their IT operating model to enable superior customer experience, greater agility, and growth,” Shekar Krishnan Head of retail in the U.K. at TCS said in the exchange filing.
Shares gained as much as 1.4% to Rs 2,498 and are among the top contributors in keeping the Nifty 50's losses in check.
Buzzing Stock: Hexaware Technologies
- Trades at a two-year high
- Gains as much as 1.7% to Rs 464.9
- Has gained in six out of the last seven trading sessions
- Has gained in nine out of the last 12 trading sessions
- Has gained 14% in the last 12 trading sessions
- Today's volumes are 59% below its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 74
- Has more than doubled from its 52-week low of Rs 201.7 on March 23, 2020
- 10 out of the 25 analysts tracking the stock have a buy recommendation; 3 sell calls
- The stock trades 13.9% higher than its 12-month consensus price target of Rs 398.7, implying a negative return potential
All But Two Stocks Of The Media Index Decline
Markets At Noon
- Benchmark indices off the day's low but trade with losses
- Nifty down 0.75% at 11,167
- Sensex down 0.66% at 37,782
- Nifty Bank down 0.4% at 21,281
- Nifty Midcap index down 1.5%
- Nifty Smallcap index down 1.8%
- India Volatility Index flat at 22.16
- Nifty Pharma is the only sectoral gainer; up 0.6%
- Nifty Media is the top sectoral laggard; down 2.9%
- Nifty Auto, Nifty Realty are other major sectoral laggards; down 2% each
- Nifty FMCG, Nifty Metal, Nifty PSU Bank fall between 1.1% to 1.8%
- Cipla is the top Nifty gainer; up 1.8%
- Zee Entertainment remains the top Nifty laggard; down 5.5%
- 35 out of the 50 Nifty constituents trade with losses
- 307 stocks on the NSE trade with gains while 1,479 stocks decline
Stock Reaction: Strides Pharma
The drugmaker announced that its step-down wholly-owned subsidiary Strides Pharma Global Pte., Singapore, has received the U.S. FDA approval for the Butalbital, Actaminophen and Caffeine Tablets USP, 50 mg / 325 mg and 40 mg.
The product is bioequivalent and therapeutically equivalent to the Reference Listed Drug (RLD), Butalbital, Actaminophen and Caffeine Tablets USP, of Actavis Laboratories.
The company will market the products in the U.S. market. As per IQVIA data of July 2020, the U.S. Market for the said tablets stood at $40 million.
Shares recovered from the day's low to gain as much as 1.5% to Rs 669, post the announcement.
Buzzing Stock: Adani Ports & SEZ
- Among the top laggards on the Nifty 50 index
- Declines as much as 6% to Rs 327.1
- Biggest single-day drop in over four months
- Trades at the lowest level in over a month
- Down for the second straight day
- Has declined in three out of the last four trading sessions
- Today's volumes are 10% higher than its 20-day average
- Trading around all important moving averages. 50-Day Moving Average at 337.5, 100-Day Moving Average at 333.3 and 200-Day Moving Average at 333.7.
- Currently seeking support at its 100 and 200-Day Moving Average
- Has declined 24% from its 52-week high of Rs 429 on October 22, 2019
- All 27 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 20.3%
SEBI Chairman Ajay Tyagi Addresses AMFI
Buzzing Stock: KPIT Technologies
- Among top gainers on the Nifty Smallcap index
- Gains as much as 9% to Rs 113.3
- Trades at the highest level since April 2019
- Has gained in three out of the last four trading sessions
- Today's volumes are quadruple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 75
- Has gained 13% in the last four trading sessions
- Trading around its record high level of Rs 118.9 made during Monday's trading session
- All seven analysts tracking the stock have a buy recommendation
- The stock trades 18.3% higher than its 12-month consensus price target of Rs 92, implying a negative return potential
JPMorgan On Indian Markets
Stock Reaction: Pearl Polymers
The company's Board of Directors have approved the sale and transfer of its B2B business on a going concern basis through a slump sale for a lump sum consideration to Manjushree Technopack.
The B2B business is engaged in manufacturing, marketing and sale of rigid plastic packaging solutions for sale, gift or supply to other business entities for packaging of products.
The company's B2B business contributed Rs 125 crore to the total turnover in FY20 which was 89.6% of its total turnover.
The cash consideration that the company will receive is Rs 92.5 crore, according to the exchange filing.
Shares are locked in an upper circuit of 5% at Rs 17.95.
Auto Index Down For The Second Day
Buzzing Stock: Alkyl Amines
- Among top laggards on the Nifty 500 index
- Falls as much as 10.7% to Rs 2,885
- Biggest single-day fall in six months
- Trades at the lowest level in over a month
- Down for the second straight day
- Has declined over 10% in the last two trading sessions
- Today's volumes are nearly triple its 20-day average
- Trades at its 50-Day Moving Average support of 2,840
- Has declined 20% from its 52-week high of Rs 3,600 on August 26, 2020
- All three analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 32.8%
Stock Reaction: Sun Pharma Advanced Research Company
The company this morning announced the grant of an exclusive license to Tripoint Therapeutics LLC, U.S.A (Tripoint) to commercialise the Elepsia XR 1000 mg and Elepsia XR 1500 mg tablets.
Under the terms of the agreement, SPARC will be eligible to receive tiered royalties, ranging from 15% to 50% on net sales, the company said in an exchange filing.
Tripoint will be responsible for all U.S. regulatory submissions and payment of annual PDUFA fees for Elepsia XR 1000 mg and Elepsia XR 1500 mg.
The initial term of the agreement shall be five years and may be further extended as per mutual agreement between the parties, the company said.
Shares rose as much as 3.4% to Rs 174.65 and are among the few stocks gaining on the Nifty Smallcap index.
Stock Reaction: Aarti Drugs
The drugmaker has set October 1 as the record date for eligible shareholders to issue bonus shares of the company.
The board in August had approved issue of bonus shares in the ratio of 3:1 or three shares of Rs 10 each for every one fully paid-up equity share of Rs 10 each.
The company has set the record date on approval from shareholders through a postal ballot.
Shares rose as much as 5% to Rs 2,985, post the announcement.
Markets At 10:10 A.M.
- Benchmark indices have a volatile first hour of trade
- Nifty, Sensex, Nifty Bank recover from day's low
- Nifty down 0.8% at 11,157
- Sensex down 0.7% at 37,769
- Nifty Bank down 0.1% at 21,334
- Nifty Midcap index down 2.7%
- Nifty Smallcap index down 3.7%
- India Volatility Index up 0.6% at 22.31
- Nifty Media and Nifty Realty are the top sectoral laggards; down 3.7% each
- Nifty Metal, Nifty PSU Bank and Nifty Auto down over 2%
- Nifty FMCG, Nifty I.T. and Nifty Pharma decline over 1% each
- TCS is the top Nifty gainer; up 0.7%
- Zee Entertainment is the top Nifty laggard; down 5.7%
- 44 out of the 50 Nifty constituents decline
- 1,570 stocks on the NSE decline while 146 trade with gains
Money Market Update
The rupee has opened weaker in today's session, in-line with the weakness seen in the equity markets.
The currency began trading at 73.47 against the U.S. Dollar as compared to Monday's close of 73.40. The currency ended little changed on Monday.
Marginal inflows in the debt & equity markets, as well as excitement over IPOs will be supportive of the rupee, Bloomberg News reports citing a note from CR Forex.
Yield on the 10-year government bond opened at 6.02% as compared to Monday's close of 6.016%.
11 states plan to sell bonds worth Rs 13,000 crore in today's session.
Stock Reaction: JSPL
A report from Steel Mint has suggested that the Ministry of Environment has asked Sarda mines to half operations, stating that the environment clearance given to it is invalid.
Sarda mines has long-term arrangements with the company.
In other news, the company also issued a clarification on Monday about news reports suggesting various transactions that it undertook between 2014-2016, saying that the transactions are routine business process and that it complied with all regulatory guidelines.
BloombergQuint has reached out to the company for a comment. The company is yet to revert on the same.
Shares fell as much as 8.5% to Rs 159.6, down for the sixth straight day. This is the longest losing streak for the stock since November 2018.
Stock Reaction: HSIL
The Board of Directors at a meeting held on Monday approved the buyback of equity shares.
The company will buyback a maximum of 66.67 lakh equity shares, which is 9.22% of the total equity shares of the company.
The buyback price of Rs 105 per share is a 47% premium to Monday's closing price.
The aggregate buyback offer is worth Rs 70 crore, the company said in an exchange filing.
Shares gained as much as 10.2% to Rs 78, before cooling off. The stock currently trades 3.5% higher at Rs 73.25.
Stock Reaction: GMM Pfaudler
Shares of the glass-lined reactor manufacturer fell after the company's promoters announced plans to sell up to 28% stake through an Offer For Sale.
The promoters plan to sell up to 40.93 lakh shares, worth Rs 1,433 crore, the company said in an exchange filing.
Floor price of the OFS has been set at Rs 3,500 per share, a 33% discount to Monday's closing price. The base offer was for 25.71 lakh shares with an oversubscription option of another 15.22 lakh shares.
The OFS for non-retail investors opens today while that for retail participants opens tomorrow.
Promoters Pfaudler Inc, Millars Machinery and Urmi Patel are sellers in the OFS.
Shares are locked in a lower circuit of 10% - the biggest single-day fall in six months, at Rs 4,682.7. The stock is down for the fifth straight day and is trading at the lowest in over a month.
Opening Bell: A Steady Start
Indian equity markets have witnessed a minor rebound at the start of trade after benchmark indices fell over 2% on Monday. Global cues however, continue to remain subdued.
The S&P BSE Sensex opened 0.44% higher at 38,200 while the NSE Nifty 50 index opened 0.46% higher at 11,301. 47 out of the 50 Nifty constituents had declined in trade on Monday.
Most sectoral indices have opened flat but with a positive bias. Nifty Pharama has opened with gains of 0.8% while the Nifty I.T. has opened 0.4% higher. Most sectoral indices had declined between 3-4% on Monday.
Broader markets are subdued as they kickstart the trading day. Both Nifty Midcap and Nifty Smallcap have opened little changed.
429 stocks on the NSE have opened with gains while 1,123 stocks have opened with losses.
Trading Ideas For The Day
- Nifty: Sell 11,400 Call of the September 24 expiry in the range of Rs 40-42. Target of Rs 26-16 and stop loss of Rs 56
- Nifty Bank: Sell between 21,350-21,450 for target of 21,100-20,800 and stop loss of 21,550
- Buy Torrent Power September futures for target of Rs 329.5 and Rs 334 and stop loss of Rs 323.5
- Sell JSW Steel September futures for target of Rs 267 and Rs 262 and stop loss of Rs 273.6
- Torrent Power and JSW Steel are intraday recommendations
How Did The Fund Flows Fare On Monday
Key Stocks In Focus
- GMM Pfaudler: Promoters to sell up to 40.93 lakh shares or 28% stake through an Offer for Sale. Floor price of Rs 3,500 per share is a 33% discount to Monday's closing. The total share sale amounts to Rs 1,433 crore. Base offer is for 25.71 lakh shares (17.59%) with an oversubscription option of 15.22 lakh shares (10.41%). The OFS for non-retail investors opens today while that for retail investors opens tomorrow. Sellers include Pfaudler Inc, Millars Machinery and Urmi Patel.
- JSPL: Clarified on media reports over certain transactions undertaken by the company between 2014-2016. The company stated that all transactions were routine business activities and all of them had proper underlying assets. The statement also said that it had fully complied with all regulatory guidelines at the time of these transactions.
- HSIL: Board approves share buyback of 66.67 lakh shares or 9.22% of total equity. The buyback price of Rs 105 per share is a 47% premium to Monday's closing price. The total buyback aggregates to Rs 70 crore. On full acceptance of maximum buyback offer, promoter stake in the company will rise to 59.38% from 53.91%.
- Ceat: Board to consider raising funds via NCDs on September 25.
- Angel Broking: Raises Rs 180 crore from 26 anchor investors ahead of its IPO. The issue opens for subscription today.
- Chemcon Speciality Chemicals: Issue subscribed 5.2 times on the first day. Institutional subscription at zero, non-institutional subscription at 1.24 times while retail subscription at 9.86 times.
- CAMS: Issue subscribed 0.82 times on day 1. Institutional subscription at 0.25 times, non-institutional subscription at 0.3 times while retail subscription at 1.4 times.
For details on the key stocks in focus, brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Rebound After A Fall?
Good Morning!
Indian equity markets fell the most in over three weeks on Monday, tracking weak global cues. The benchmarks fell over 2% each but the cuts were steeper in the broader markets.
All constituents of Nifty Auto, FMCG, media, metal, pharma and PSU bank indices ended with losses.
But futures are indicating a steady start to today's session. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.25% to 11,272 as of 7:55 a.m. on Tuesday.
The subdued global and market sentiment has had no impact on the flurry of IPOs hitting the market. Angel Broking's Rs 600-crore IPO is the third issue that will be open for subscription. The other two — Chemcon Specialty Chemicals and CAMS — subscribed 5.2 times and 0.8 times on the first day of bidding on Monday.
Asian markets have dipped this morning, following a weak session on Wall Street. Benchmarks in Australia, South Korea, China and Hong Kong are declining, while those in Japan are shut for a holiday for the second day.
Futures on the Dow Jones are trading 70 points lower at present. The index recovered from sessions lows on Monday but ended with cuts of 1.8%.
West Texas Intermediate crude rose 0.5% after a nearly 4% decline overnight. Gold traded at $1,913/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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