KEY HIGHLIGHTS
Closing Bell: Six-Day Rally Ends
India's benchmark indices witnessed their biggest single-day fall in over a month after tensions between India and China escalated yet again at the Ladakh border.
The S&P BSE Sensex ended 2.1% lower at 38,628 while the NSE Nifty 50 index ended 2.2% lower at 11,387. The six-day winning streak for both Sensex and Nifty came to a halt with today's decline.
There was heavy selling witnessed across sectoral indices. The Nifty Media index was the top sectoral laggard, ending with losses of over 6%. The Nifty Pharma and PSU Bank indices ended lower by 5% each while the Nifty Bank and the Nifty Auto saw declines of over 3.5%.
The Nifty Bank fell over 800 points this session. It made a failed attempt to cross its 200-Day Moving Average at 25,083.
Broader markets too were not immune to the selling pressure. Both midcap and smallcap index fell over 4% in today's session. The 10-day winning run of the midcap index came to an end today.
Volatility surged in today's session. The India Volatility Index snapped a three-day losing streak, ending 27% higher at 23.32.
Market breadth was firmly in favour of the laggards. 1,608 stocks on the NSE posted losses while only 268 managed to gain.
All Sectoral Indices Decline
Buzzing Stock: Sun Pharma
- Top laggard on the Nifty 50 index
- Falls as much as 7.1% to Rs 516
- Biggest single-day drop in five months
- Snaps three-day gaining streak
- Heads towards its 50-Day Moving Average of Rs 505 on the downside
- Today's volumes are 90% higher than its 20-day average
- Down 8% from its 52-week high of Rs 565 on August 28, 2020
- 25 out of the 39 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 6.3%
Phoenix Mills Builds A War Chest
Buzzing Stock: Navin Fluorine
- Worst performing stock on the Nifty 500 index
- Falls as much as 11.7% to Rs 1,883
- Biggest single-day drop since February 2016
- Falls to the lowest level in three weeks
- Today's volume are 34% higher than its 20-day average
- Falling towards its 50-Day Moving Average of 1,831
- Down 12% from its 52-week high of Rs 2,207 on August 25, 2020
- Nine out of the 15 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 1.6%
Earnings Reaction: NHPC Q1FY21
- Revenue up 4% to Rs 2,518.9 crore
- Net profit down 18% Rs 722.5 crore
- Ebitda down 5% to Rs 1,420.5 crore
- Ebitda margin at 56.4% from 62.1%
- One-time rebate of Rs 185 crore to Discoms as per directions of the ministry of power
- All numbers are standalone and compared on a year-on-year basis
Shares fell as much as 5.3% to Rs 21.5, post the announcement.
PSU Bank Index Snaps A Six-Day Gaining Streak
Active Stock Options
- IndusInd Bank's 700 Call: Premium down 45.6% to Rs 20.6. The contract has added 661 shares in Open Interest.
- ICICI Bank's 420 Call: Premium down 34.3% to Rs 8. The contract has added 129 shares in Open Interest.
- HDFC Bank's 1,160 Call: Premium down 1.3% to Rs 19.4. The contract has added 230 shares in Open Interest.
Bucking The Trend: ONGC
- Top gainer on the Nifty 50 index
- Gains as much as 6.4% to Rs 85.5
- Trades at the highest level in nearly two months
- Up for the second straight day
- Today's volumes are more than six times higher than its 20-day average
- Taking support at its 50-Day Moving Average at 80.18
- Has gained more than 50% from its 52-week low of Rs 50 on March 13, 2020 while it remains 43% below its 52-week high of Rs 149.6, on November 4, 2019
- 23 out of the 34 analysts tracking the stock have a buy recommendation; six sell calls
- Return potential of the stock as per Bloomberg data is 20.3%
Markets At 2:10 P.M.
- Benchmark indices trade near the day's low
- Nifty down 1.76% at 11,439
- Sensex down 1.7% at 38,796
- Nifty Bank down 3.1% at 23,750
- Nifty Midcap index down 3.3%
- Nifty Smallcap index down 4.5%
- India Volatility Index up 21% to 22.21
- All sectoral indices trade with losses
- Nifty Media remains the top sectoral loser; down 5.1%
- Nifty Pharma is the other major sectoral laggard; down 4.2%
- Nifty Metal, Nifty PSU Bank, Nifty Realty down over 3% each
- Nifty I.T. and Nifty FMCG down 1% each
- ONGC remains the top Nifty gainer; up 3.2%
- Sun Pharma is the top Nifty laggard; down 6%
- 43 out of the 50 Nifty constituents decline
Money Market Update
The rupee snapped a three-day winning streak in today's session, ending with losses spurred by the volatility in the equity markets.
The currency ended at 73.62 against the U.S. Dollar as compared to Friday's close of 73.40.
It made an intraday high of 73.23, which was the level at which it commenced trading while its intraday low was 73.69.
Today's losses made Rupee the second worst performing currency in Asia, behind the Japanese Yen.
Yield on the 10-year government bond ended at 6.117% as compared to Friday's close of 6.143%.
Earnings Reaction: Arvind Q1FY21
- Revenue down 68% to Rs 599.3 crore
- Net loss of Rs 95.3 crore from net profit of Rs 24.1 crore
- Ebitda loss of Rs 29 crore from Ebitda gain of Rs 154.5 crore
- Exceptional gain of Rs 6.2 crore in the base quarter
- Deferred tax credit of Rs 60 crore this quarter cushions net loss
- Textile segment revenue down 73% to Rs 435.6 crore
- Advanced Material segment revenue down 37% to Rs 106.5 crore
Management Commentary:
- Denim volumes have recovered to around 70% in July
- Export volumes have fully recovered while domestic are still lagging
- Monthly garment volumes recovered to ~60% by June
- Multi-pronged program resulted in long-term fixed cost reduction of 15%
- Net borrowing likely to return back to end-March levels by Q2FY21
Shares fell as much as 6% to Rs 33.4, post the announcement. The stock is down for the third straight day.
Earnings Reaction: Apex Frozen Foods Q1FY21
- Revenue down 1.6% from Rs 218.3 crore
- Net profit up 2.4% to Rs 8.5 crore
- Ebitda up 52% to Rs 18.7 crore
- Ebitda margin at 8.6% from 5.5%
- Lower raw material costs aid margins
- U.S. business contributed 65.8% to overall revenue while China and Europe contributed 20.4% and 13.8% respectively
- Sharp decline in demand from restaurants and catering was only partly offset by retail demand
- Processed and ready-to-cook products saw increased demand
- Demand from U.S. and Europe improving gradually while China's imports are growing steadily.
- Witnessing green shoots of recovery across the growth
- Cautiously optimistic of better performance in the coming quarters
- All numbers are compared on a year-on-year basis
Shares fell as much as 9.3% - the most in five months to Rs 252. The stock is down for the third straight day.
Buzzing Stock: ICICI Prudential
- Biggest single-day drop in over three months
- Falls as much as 5.8% to Rs 425.2
- Trades at the lowest level in over a month
- Today's volumes are 86% higher than its 20-day average
- Breaks below its 50 and 200-Day Moving Average
- Has doubled from its 52-week low of Rs 221 on March 24, 2020 but remains 21% below its 52-week high of Rs 537 on November 13, 2019
- 23 out of the 32 analysts tracking the stock have a buy recommendation; 4 sell calls
- Return potential of the stock as per Bloomberg data is 13.5%
Tata Motors: The Only Gainer On The Auto Index
European Stocks Open Higher
Benchmark indices across Europe have opened with gains, looking to close out the month with gains of over 4%.
The Stoxx 600 has opened 0.4% higher, led by Oil & Gas along with Chemical stocks.
Asian markets ended the first session of the new trading week on a mixed note, while futures on the Dow Jones are off the day's high, now trading with gains of 95 points.
Brent Crude trades 1.2% higher at $46.34, while Gold is little changed at $1,962.1/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 up 0.6% at 3,334
- DAX up 0.55% at 13,104
- CAC up 0.8% at 5,043
- FTSE 100 is shut on account of a holiday
- IBEX 35 up 0.65% at 7,177
How Are The Sectoral Indices Faring
India Faces Worst Quarterly GDP Slump
Once the world's fastest growing major economy, India is set to post its steepest GDP drop as Covid-19 cases continue to remain on the rise.
The data, which will be reported later this evening is likely to show an 18% contraction in GDP, according to a survey of economists by Bloomberg. That would be the sharpest contraction since the country started publishing the quarterly figures in 1996.
Rahul Bajoria, the Mumbai-based Chief India economist at Barclays is estimating a 25.5% contraction in GDP, given the 'unprecedented blow to the economy' from the lockdown.
There is also a high level of uncertainty around last quarter's data, given the lack of field surveys conducted by the statistics office during the lockdown.
Buzzing Stock: CSB Bank
- Second worst performer on the Nifty Smallcap index
- Declines as much as 9.7% to Rs 212
- Biggest single-day fall in five months
- Snaps four-day losing streak
- Today's volumes are 37% higher than its 20-day average
- Had gained 10% in the last four trading sessions
- Trades 30% below its 52-week high of Rs 313 and more than 130% higher than its 52-week low of Rs 95.6 on March 25, 2020
- Return potential of the stock as per Bloomberg data is 16.4%
Earnings Reaction: Wockhardt Q1FY21
- Revenue down 18% to Rs 598 crore
- Net profit of Rs 760 crore from net loss of Rs 55 crore
- Ebitda loss of Rs 72 crore from Ebitda gain of Rs 1 crore
- Exceptional gain of Rs 1,470 crore from sale of branded generics business to Dr Reddy's
- Emerging Markets business revenue flat at Rs 139 crore. EM business contributed 21% of global revenue.
- U.S. business revenue down 39% to Rs 114 crore and contributed 17% of global revenue.
- U.K. business revenue down 3% to Rs 218 crore and contributed 33% to global revenue.
- India business revenue down 48% to Rs 116 crore and contributed 18% of global revenue.
- Net debt-equity as on June 30, stood at 0.31
- All numbers compared on a year-on-year basis
Shares fell as much as 5.1% to Rs 312.55, the biggest single-day fall in five months.
Markets At Noon
- Benchmark indices see volatile moves
- Nifty down 0.8% at 11,558
- Sensex down 0.6% at 39,219
- Nifty Bank down 1.9% at 24,059
- Nifty Midcap index down 2.1%
- Nifty Smallcap index down 3.7%
- India Volatility Index up 16.7% - the most since May to 21.42.
- Nifty Media extends losses as the top sectoral laggard; down 4.4%
- Nifty Pharma, Nifty PSU Bank, Nifty Metal decline over 2% each
- Nifty Auto down 1.8%
- ONGC remains the top Nifty gainer; up 2.4%
- IndusInd Bank is the top Nifty laggard; down 5%
- 38 out of the 50 Nifty constituents are declining
Buzzing Stock: Adani Gas
- Worst performer on the Nifty Midcap index
- Declines as much as 9.8% to Rs 168.3
- Biggest single-day decline in over five months
- Has declined only twice in the last six trading sessions
- Trading volumes are at par with the stock's 20-day average
- Nearing its 50-Day Moving Average at 159.3
- Down 16% from its 52-week high of Rs 196.5 on August 26, 2020
- Both analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 9.9%
Nifty Media Index Is The Top Sectoral Laggard
Earnings Reaction: Khadim's Q1FY21
- Revenue down 72% to Rs 60.4 crore
- Net loss of Rs 23.7 crore from net profit of Rs 3.3 crore
- Ebitda loss of Rs 14.3 crore from Ebitda gain of Rs 19.9 crore
- Operations and financial results severely impacted by the pandemic
- Challenges still exists even though units have started functioning
- All numbers are standalone and compared on a year-on-year basis
Shares fell to the day's low, falling as much as 3.6% to Rs 122.3.
India-China Tensions Escalate
- India says Chinese troops violated consensus on the Ladakh border
- India says provocative military movement by China on August 29-30
- Brigade commander level flag meet in progress at Chushul
Source: Bloomberg
Buzzing Stock: IOL Chemicals & Pharma
- Worst performer on the BSE Smallcap index
- Falls as much as 12.3% to Rs 738.9
- Biggest single-day decline since January 2019
- Trades at the lowest level in a month
- Down for the second straight day
- Down 10% in the last two trading sessions
- Has declined in three out of the last four trading sessions
- Today's volumes are 6% higher than its 20-day average
- Down from its 52-week high of Rs 898.4 on August 25, 2020
Stock Reaction: Steel Strips Wheels
The company informed the exchanges that it has received an order of 3,700 wheels for the U.S. Caravan Trailer Market.
The orders are worth $46,000, the company said in an exchange filing.
The orders will be executed in the month of September from the Chennai plant, the company said.
Orders of similar capacity are anticipated from the same customer oase as businesses have picked up speed, the company said.
Shares recovered from the day's low of 2.9% declines to Rs 463.9, post the announcement.
Buzzing Stock: Bank of India
- Third best performer on the Nifty Midcap index
- Gains as much as 12.2% to Rs 59
- Biggest single-day gain in over two months
- Trades at the highest level in six months
- Up for the fourth straight day
- Longest winning streak in two months
- Up 17% in the last four session
- Today's volumes are 12 times higher than its 20-day average
- Broke above its 200-Day Moving Average at 51.6 on Friday
- Has nearly doubled from its 52-week low of Rs 30.4 on March 13, 2020
- 1 out of the 12 analysts tracking the stock has a buy recommendation; 10 sell calls
- The stock trades 32.6% higher than its 12-month consensus price target of Rs 37.5, implying a negative return potential
Stock Reaction: RBL Bank
The company informed the exchanges that its MD & CEO Vishwavir Ahuja sold 18.93 lakh shares of the company on August 27 and 28.
Ahuja sold shares worth Rs 38.52 crore, amounting to nearly 18% of his / his family's total holding.
The lender's chief continues to retain close to 80.1 lakh shares or 1.6% stake, as stated in the exchange filing.
The sale was driven primarily with the need to extinguish personal debt obligations and related servicing burden, undertaken over the last few years, mainly to exercise and purchase vested ESOPs as well as to take care of some pressing family commitments - the statement said.
Shares fell as much as 3.3% to Rs 203.55, snapping a six-day winning streak. The lender is the worst performer on the Nifty Bank index.
Nifty Bank Off Day's High
Stock Reaction: Vedanta
The company has made a disclosure that it has created an encumbrance over the equity shares of its subsidiary Hindustan Zinc.
The company has tied-up a long-term syndicated loan facility for over 10,000 crore with State Bank of India has the facility agent and SBICAP Trustee Company as the security trustee.
SBI has given a commitment of Rs 5,000 crore as a lender, the press statement said.
The security is provided by way of a pledge over shares held by Vedanta in Hindustan Zinc, representing 14.8% of the paid-up share capital.
It has also given a non-disposal undertaking in respect of its shareholding in Hindustan Zinc, to the extent of 50.1% of HZL's paid-up share capital, which are not pledged.
Shares gained as much as 4.5% to a six-month high of Rs 134.65. The stock is up for the second straight day.
Markets At 10:10 A.M.
- Benchmark indices rise for the seventh straight day
- Nifty up 0.9% at 11,748
- Sensex up 0.86% at 39,809
- Nifty Bank up 0.55% at 24,658
- Nifty Midcap index little changed
- Nifty Smallcap index up 0.2%
- India Volatility Index up 2.2% at 18.73
- Nifty I.T. is the top sectoral gainer; up 1.5%
- Nifty PSU Bank, Nifty Realty up 1.2% each
- Nifty Media is the top sectoral laggard; down 1.7%
- ONGC is the top Nifty gainer; up 4.7%
- Bharti Airtel is the top Nifty laggard; down 1.6%
Money Market Update
The currency opened stronger for the fourth straight session after ending Friday's trade with strong gains.
The rupee opened at 73.23 against the U.S. Dollar, as compared to Friday's close of 73.40. The currency was the best performer in Asia on Friday as well as on a weekly basis.
Traders in the bond market will look forward to the release of the GDP data for the April-June period, later this evening. A Bloomberg Survey expects the Indian economy to contract a record 19.2% during the quarter, led by lockdowns due to Covid-19.
Stock Reaction: Adani Enterprises
Adani Airport Holdings Ltd. has entered into an agreement to acquire the debt of GVK Airport Developers Ltd.
As per the agreement, Adani Airport Holdings will acquire the debt of GVK ADL from its airport lenders.
Adani Airport Holdings will offer a stand-still to GVK, in addition to release of the guarantee given by GVK Power and Infra with respect to the debt acquired by it, the exchange filing said.
Post the acquisition of the debt, Adani Group will take steps to obtain necessary customary and regulatory approvals to acquire controlling stake in Mumbai International Airport (MIAL).
AAHL intends to infuse funds into MIAL so that it receives much needed liquidity and also achieves financial closure of Navi Mumbai International Airport to be able to commence construction, the statement said.
Shares of Adani Enterprises gained as much as 2.8% to Rs 296.3, post the announcement. The stock is up for the third straight day.
Stock Reaction: Indiabulls Ventures
The company informed the exchanges on Friday that it will issue 3.36 crore fully paid-up equity shares to foreign investors on a preferential basis.
The company will raise Rs 588 crore from the issue. Shares will be issued at a price of Rs 175 per share - which is a discount of 18.6% to Friday's closing price.
First Royalty Ventures, Ribbit Holdings, NWI EM Fixed Income Master Fund are some of the investors to whom shares have been allotted.
The company has also appointed Sameer Gehlaut as Chairman and CEO of the company.
Shares fell as much as 8% to Rs 197.7, before recovering slightly from the day's low.
Stock Reaction: Reliance Industries & Future Group Companies
The much awaited deal between Reliance Retail & Future Group finally took place over the weekend.
Future Group to sell its retail, wholesale, logistics and warehousing assets to Reliance Industries' retail arm Reliance Retail, at a of Rs 27,513 crore.
The transfer of assets and liabilities will take place after a reorganisation at the Future Group in which key group companies - Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chain Solutions and Future Market Networks will be medged into Future Enterprises.
Brands like Big Bazaar, FBB, Foodhall, Easyday, Nilgiris, Central and Brand Factory will be sold for Rs 5,628.33 crore.
- Shares of Reliance Industries gained as much as 2.7% to Rs 2,174.
- Shares of Future Retail gained as much as 20% to Rs 162.35.
- Shares of Future Consumer are locked in an upper circuit of 5% at Rs 12.
- Shares of Future Enterprises are locked in an upper circuit of 5% at Rs 21.1
- Shares of Future Lifestyle are locked in an upper circuit of 5% at Rs 152.8
- Shares of Future Market Networks are locked in an upper circuit of 5% at Rs 27.95.
Opening Bell: A Strong Start
India's benchmark indices opened higher for the seventh straight day, aided by gains in the heavyweight Reliance Industries Ltd.
The S&P BSE Sensex opened 1.1% higher at 39,888 while the NSE Nifty 50 index opened near the mark of 11,800 - up 1.1% at 11,777.
This is a new six-month high for the Sensex and the Nifty.
Among the sectoral indices, the Nifty Bank too opened higher for the seventh straight day, gaining close to 700 points or 3%.
Latest On The Coronavirus
- Global cases cross 25.1 million mark
- Death toll rises to 8.45 lakh
- Overall tally in the U.S. approaches the 6 lakh mark
- South Korea reports 248 new cases - fewest in two weeks
- Auckland exits lockdown after outbreak under control
- Brazil reports 16,158 new cases - the fourth straight decline in daily numbers
- California reports 6,070 new cases - the most in a week
- Western New York seeing an outbreak of new cases
- U.K. reports 1,715 new cases - the most since June
- Russia reports 4,980 new cases - 695 of those in Moscow
- Iran reports 1,754 new cases - a three-month low
How Did The Fund Flows Fare On Friday
Key Stocks In Focus
- RIL-Future Group Deal: Future Group to sell its retail, wholesale, logistics and warehousing assets to Reliance Industries' retail arm Reliance Retail, at a of Rs 27,513 crore. The transfer of assets and liabilities will take place after a reorganisation at the Future Group in which key group companies - Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chain Solutions and Future Market Networks will be medged into Future Enterprises. Brands like Big Bazaar, FBB, Foodhall, Easyday, Nilgiris, Central and Brand Factory will be sold for Rs 5,628.33 crore. Reliance Retail will also invest Rs 1,200 crore in a preferential issue of shares by Future Enterprises for a 6.09% stake.
- NMDC: The company said in a conference call that the demerger process of its steel plant to take at least 8-9 months. Capex incurred on the steel plant stards at Rs 17,000 crore and pending capex of Rs 4,000 crore. Balance funding will be through leveraging the steel plant, which is expected to be commissioned by 2021.
- Indiabulls Ventures: Board approves preferential issue of 3.36 crore equity shares at Rs 175 per share worth Rs 588 crore. Investors like Think India Opportunities Fund, TIMF Holdings, Ribbit Cayman Holdings, Inteligo Bank, NWI Emerging Market Fixed Income Master Fund and First Royalty Ventures have been allotted shares. The board has appointed Sameer Gehlaut as the company's Chairman and CEO.
- RBL Bank: MD & CEO, Vishwavir Ahuja sold 18.93 lakh shares between August 27-28 worth Rs 38.52 crore to meet personal debt obligations. The amount of shares sold is approximately 18% of his or his family's aggregate holdings of the bank as on date.
- CG Power: Lenders of the company have approved Tube Investments' offer as the successful offer, subject to compliances with all the conditions stated in the Letter of Intent, to the satisfaction of the lenders.
- Non-Nifty Earnings Today: Arvind, Bharat Dynamics, GNFC, JK Cement, Morepen Laboratories, NHPC, Sadbhav Infra, Spandana Sphoorty
To know more details about the RIL-Future Group deal, key brokerage updates, earnings reported after market hours and more, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Gains Likely To Extend
Good Morning!
Indian equity market posted its second straight gain for the week ended Aug. 28, with the benchmarks rising more than 2% each, even as domestic investors remained net sellers so far this month.
Futures are pointing towards a positive start to today's trade. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.4% to 11,742 as of 7:20 a.m.
The street will watch out for Arvind, Bharat Dynamics, GNFC, NHPC, Sadbhav Infra that are set to report their quarterly results today.
Asian markets have opened mostly higher with indices in Japan and South Korea advancing, while those in Australia fluctuating. Futures on the Dow Jones are trading higher by 140 points. The index had ended with gains of 0.6% on Friday.
West Texas Intermediate crude rose 0.4% to $43.14 per barrel, while gold was up 0.5% at $1,974.9/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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