KEY HIGHLIGHTS
Closing Bell: A Weak Expiry
Indian equity markets ended the weekly options expiry session on a weak note, ending near the lowest point of the day, led lower by banks and metal stocks.
The S&P BSE Sensex ended 0.82% lower at 38,979 while the NSE Nifty 50 index managed to hold on to the 11,500 mark, ending 0.76% lower at 11,516.
Real Estate stocks were the top laggards in today's session. The index ended 1.7% lower. The other major laggards were metal stocks, with the metal index ending lower by 1.4%. Losses on the Metal index were mainly led by Hindalco, which ended 4% lower and as the top laggard on the Nifty 50 index.
Both Nifty Bank and the PSU Bank index ended with losses of over 1% in today's session.
Nifty Pharma, Media bucked the trend in today's session, ending with gains of 0.4%, as did the Nifty I.T. index, ending off the day's high but with gains of 0.2%.
Broader markets remained subdued in today's session as well. The Midcap index ended 0.25% lower while the smallcap index fell 0.5%.
The India Volatility Index ended 2.1% higher, above the mark of 20, at 20.08.
Market breadth stayed in favour of the laggards. 1,132 stocks on the NSE ended with losses while 690 stocks managed to end with gains.
The new listing on the bourses - Happiest Minds Technologies, ended with gains of 123.7% at Rs 371.35, as compared to its issue price of Rs 166.
How Did The Sectoral Indices Fare
Hindalco To Buy Copper Concentrate From Hindustan Copper
Hindalco Industries has signed an agreement for the long-term purchase and sale of nearly 60% of Hindustan Copper's copper concentrate production.
The pact will help Hindalco, which is India's largest copper producer, cut down on its imports, it said in a statement.
Hindalco also supplies over 50% of the domestic refined copper requirements.
Shares of Hindalco remain the top laggards on the Nifty 50 index, down 4.4% at Rs 175.8. Shares of Hindustan Copper are off the day's high, trading 2.5% higher at Rs 37.25.
RBI Announces Open Market Operations
After concluding a round of Open Market Operations today, The Reserve Bank of India has announced another round on September 24.
Under this Open Market Operation, the RBI will purchase government securities worth Rs 10,000 crore, according to a central bank statement.
Securities maturing in September 2026, October 2029 and September 2031 will be purchased in this round of the OMO.
Buzzing Stock: GMM Pfaudler
- Worst performing stock on the Nifty 500 index
- Declines as much as 9.6% to Rs 5,250
- Biggest single-day drop in six months
- Trades at the lowest level in a month
- Down for the second straight day
- Adding to Wednesday's losses of 2%
- Today's volumes are six times higher than its 20-day average
- Stock heading towards oversold territory with Relative Strength Index (RSI) at 44
- Trades 24% below its 52-week high of Rs 6,900 on August 12, 2020
- One out of the five analysts tracking the stock have a buy recommendation; 1 sell call
- The stock trades 27.3% higher than its 12-month consensus price target of Rs 3,889, implying a negative return potential
Active Stock Options
- Dr Reddy's 4,800 Call: Premium up 62% to Rs 129. The contract has added 489 shares in Open Interest.
- HDFC Bank's 1,100 Call: Premium down 10.2% to Rs 16.65. The contract has added 469 shares in Open Interest.
- Infosys' 1,020 Call: Premium up 40% to Rs 19.6. The contract has added 198 shares in Open Interest.
Buzzing Stock: JB Chemicals
- Top gainer on the Nifty 500 index
- Gains as much as 17.4% to Rs 1,139
- Biggest single-day gain since March 2011
- Trades at an all-time high
- Up for the sixth straight day
- Longest winning streak in seven months
- Has gained 42% in the last six trading sessions
- Today's volumes are seven times higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 90
- Has more than tripled from its 52-week low of Rs 315 on November 21, 2019
- Four out of the five analysts tracking the stock have a buy recmomendation; 1 sell call
- The stock trades 5.8% higher than its 12-month consensus price target of Rs 996.6, implying a negative return potential
Metal Index Is The Top Sectoral Laggard
Markets At 2:10 P.M.
- Benchmark indices continue to trade lower
- Nifty down 0.6% at 11,533
- Sensex down 0.64% at 39,055
- Nifty Bank down 1% at 22,336
- Nifty Midcap index down 0.4%
- Nifty Smallcap index down 0.6%
- India Volatility Index up 3% to 20.24
- Nifty Metal is the top sectoral laggard; down 1.6%
- Nifty Realty, Nifty PSU Bank down 1% each
- Nifty I.T. remains the top sectoral gainer; up 0.7%
- Nifty Media and Nifty Pharma up 0.3% each
- Dr Reddy's Laboratories remains the top Nifty gainer; up 3.2%
- Hindalco remains the top Nifty laggard; down 4%
- 1,129 stocks on the NSE trade with losses while 642 are advancing
Money Market Update
The currency continues to alternate between gains and losses this week, ending lower in today's session.
The rupee ended at 73.66 against the U.S Dollar, as compared to Wednesday's close of 73.52. The currency made an intraday low of 73.78 and a high of 73.64 in today's session.
The rupee was the third worst performing currency in Asia, courtesy today's losses. The Philippine Peso and Offshore Chinese Renminbi, underperformed the currency.
Yield on the 10-year government bond ended at 6.011% as compared to Wednesday's close of 5.993%.
Stock Reaction: Ramco Systems
The company has signed an agreement with Arla Foods - the world's largest producer of organic dairy products.
The order pertains to modernising and transforming Arla Foods' multi-country payroll operations on Ramco's global payroll platform.
Arla Foods will implement the company's global payroll & HR software to streamline multi-country payroll and time & attendance operations across five middle east countries on a single platform, the exchange filing said.
Shares gained as much as 3.8% to Rs 356.3, post the announcement and are up for the fifth straight day. The stock trades at a two-year high.
Stock Reaction: IRCON International
The company has informed the exchanges that it has secured Railway Electrification Works for various routes worth nearly Rs 1,900 crore.
The orders were won on a competitive bidding basis among PSUs.
The tenure for execution of the projects varies from 15-20 months from the date of signing of the agreements with the Zonal Railways.
The company will execute a Memorandum of Understanding (MoU) with the concerned zonal railway, the exchange filing said.
Shares gained as much as 4.2% to Rs 86.8, post the announcement. The stock trades at the highest level in two weeks.
F&O Snapshot: Active Options Contracts
- Nifty September futures add 7.9% and 12,479 shares in Open Interest.
- Nifty Bank September futures add 17.2% and 11,606 shares in Open Interest.
Nifty: Today’s Expiry
- 11,500 Put: Premium down 25.8% to Rs 9. The contract has added 54,342 shares in Open Interest.
- 11,600 Call: Premium down 92% to Rs 3.75. The contract has added 93,626 shares in Open Interest.
- 11,550 Call: Premium down 81.1% to Rs 15. The contract has added 58,947 shares in Open Interest.
Nifty Bank: Today's Expiry
- 22,500 Call: Premium down 85% to Rs 35.9. The contract has added 73,345 shares in Open Interest.
- 22,300 Put: Premium down 10.5% to Rs 45.4. The contract has added 46,446 shares in Open Interest.
- 22,200 Put: Premium down 37.4% to Rs 22.9. The contract has added 56,552 shares in Open Interest.
Buzzing Stock: Mphasis
- Top gainer on the Nifty Midcap index
- Trading at an all-time high
- Gains as much as 4.7% to Rs 1,359.8
- Has gained in three out of the last four and six out of the last seven trading sessions
- Up 17% in the last four trading sessions
- Today's volumes are quadruple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 71
- Has more than doubled from its 52-week low of Rs 630 on March 23, 2020
- 23 out of the 33 analysts tracking the stock have a buy recommendation; 3 sell calls
- The stock trades 9.8% higher than its 12-month consensus price target of Rs 1,217.6, implying a negative return potential
European Markets Open Lower
Benchmark indices in Europe have opened with losses, in-line with its peers in Asia. Markets are taking cues from Fed Chair Jerome Powell's comments about the economic outlook.
The Stoxx 600 is down 1.1% with all sectoral indices declining. Autos, miners and banks are leading the losses.
Asian markets have ended with losses while futures on the Dow Jones are down 430 points.
Brent crude is trading 1.5% lower at $41.62 per barel while Gold is down 0.75% at $1,944.6/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 down 1.1% at 3,303
- DAX down 1.5% at 13,058
- CAC down 1.4% at 5,001
- FTSE 100 down 1.2% at 6,005
- IBEX 35 down 1.3% at 7,018
How Are The Sectoral Indices Faring
Indian Firms Sell Record Amount Of Rupee Bonds
India Inc. has raised about Rs 4,000 crore or $54.2 billion through local notes since April 1, the best start ever to a new financial year, Bloomberg reports.
This comes after unconventional stimulus steps by the authorities drove spreads on AAA rated three-year corporate bonds to the lowest in nearly 15 years.
Bloomberg reported last month that first time bond issuers are rushing into India's debt markets after borrowing costs were down to the lowest since 2005.
The then average yield on the top-rated three-year notes was 5.09%, 221 basis points cheaper than loans of similar tenor at State Bank of India.
Buzzing Stock: Hindalco
- Top laggard on the Nifty 50 index
- Falls as much as 4% to Rs 176.4
- Snaps two-day gaining streak
- Breaks below 50-Day Moving Average of 177.6
- Today's volumes are 25% above its 20-day average
- News sentiment had declined to very negative from somewhat positive, as per Bloomberg
- Open Interest in call options rose to 4,200 as compared to 20-day average of 2,700
- Trades 20% below its 52-week high of Rs 221.2, on January 2, 2020
- All 24 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 32.4%
All Stocks On The Nifty Bank Decline
Markets At Noon
- Benchmark indices extend losses; trade at day's low
- Nifty down 0.67% at 11,526
- Sensex down 0.7% at 39,027
- Nifty Bank down 1% at 22,339
- Nifty Midcap index down 0.5%
- Nifty Smallcap index down 0.6%
- India Volatility Index up 4% at 20.45
- Nifty Metal is the top sectoral laggard; down 1.7%
- Nifty PSU Bank, Nifty Auto down 1.1% each
- Nifty Realty too declines over 1.5%
- Nifty I.T. is bucking the trend; up 0.6%
- Dr Reddy's is the top Nifty gainer; up 3.2%
- Hindalco remains the top Nifty laggard; down 3.9%
- 1,130 stocks on the NSE trade with losses while 606 are gaining
Buzzing Stock: Trent
- Among worst performers on the Nifty 500 index
- Declines as much as 4.1% to Rs 724.6
- Biggest single-day drop in over a month
- Snaps six-day gaining streak
- Six-day gaining streak was most in nearly three months
- Today's volumes are 50% below its 20-day average
- Stock slips from overbought territory with Relative Strength Index (RSI) now at 68
- Trades 10% below its 52-week high of Rs 804.7 on February 25, 2020
- 10 out of the 15 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 21.1% higher than the 12-month consensus price target of Rs 575.1, implying a negative return potential
Top Reads On BloombergQuint.com
Buzzing Stock: Advanced Enzyme Technologies
- Gains as much as 5.5% to Rs 249.9
- Trades at the highest level since May 2018
- Biggest single-day gain in a month
- Today's volumes are 50% higher than its 20-day average
- Has gained in three out of the last four sessions
- The three sessions of gains has led to the stock gaining 7.5%
- Has nearly tripled from its 52-week low of Rs 91 on March 23, 2020
- Both analysts tracking the stock have a buy recommendation
- The stock trades 3.6% higher than its 12-month consensus price target of Rs 238, implying a negative return potential
Brokerage Reaction: Steel Authority Of India
Shares of the state-run steelmaker are cooling off from the day's high. The stock had surged in early trade after brokerage firm Citi had upgraded the stock to neutral from buy. Citi has also initiated a 90-day Positive Catalyst Watch on the stock.
Citi’s Rationale:
- Domestic steel prices up by Rs 3,000-4,000 per tonne since June/July lows
- Improving domestic demand, rising volumes and likely lower exports augur well
- Expect SAIL to be profitable in FY22E as compared to a loss earlier
- Raise Ebitda estimates by 64%, 16% and 22% respectively for FY21E/FY22E/FY23E
- Raise price-to-book multiple to 0.5 times from 0.4 times
Citi has raised its price target on the stock to Rs 50 from the earlier Rs 40.
Other brokerages like Emkay too have maintained their buy rating on the stock with a price target of Rs 43. Motilal Oswal has maintained its neutral rating on the stock with a price target of Rs 42.
Shares gained as much as 3.9% to Rs 39.5, but are now cooling off to trade with modest gains.
Buzzing Stock: Sonata Software
- Top gainer on the Nifty Smallcap index
- Gains as much as 5.5% to Rs 337.5
- Biggest single-day gain in over a month
- Trades at the highest level in over six months
- Has gained in three out of the last four trading sessions
- Today's volumes are eight times higher than its 20-day average
- Trades at 14.3 times estimated forward earnings per share as compared to its two-year historical average of 11.5 times
- Has more than doubled from its 52-week low of Rs 147 on March 24, 2020
- Trading 5% below its 52-week high of Rs 355 on February 27, 2020
- Five out of the seven analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential of the stock as per Bloomberg data is 3.1%
Stock Reaction: Larsen & Toubro
The Metallurgical and Material Handling business of L&T Construction has secured an order from Nothern Coalfields, a subsidiary of Coal India.
The order pertains to a coal processing and load out package to be installed at the Dudhichua Mines in Uttar Pradesh, the exchange filing said.
The scope of work involves EPC for a double stream coal sizing & transportation system covering semi-mobile sizing system, high capacity special conveyors and an automated loading system.
The business has also secured new and add-on orders from its existing customers, the statement added.
L&T has termed this contract as 'significant' which means it will be d between Rs 1,000 crore to Rs 2,500 crore, as per the company's classification of orders.
Shares are recovering from the day's low after declining as much as 1.3% to Rs 910.
Stock Reaction: Dr Reddy's Laboratories
The drugmaker announced the launch of the Over-the-counter (OTC) Olopatadine Hydrochloride Opthalmic Solution USP, 0.2% and 0.1%.
The solution is the store-brand equivalent of Pataday Once Daily Relief and Pataday Twice Daily Relief in the U.S. market.
The solution is used in the temporary relief of itchy eyes due to pollen, ragweed, grass, animal hair and dander.
The Pataday brand had U.S. sales of approximately $31 million since its launch in March 2020, according to IRi.
Shares gained as much as 2.6% to an all-time high of Rs 4,750. The stock is up for the third straight day.
Stock Reaction: Ashok Leyland
The commercial vehicle manufacturer has received a large order from Procure Box - a logistics start-up company.
Procure Box has placed an order of 1,400 Intermediate Commercial Vehicles (ICVs) for its fuel distribution business, the company said in an exchange filing.
The order is for Ashok Leyland's Ecomet trucks and will be executed in the next five to six months, the statement said.
"With this order, our order book for ICVs has enhanced significantly and is a testament to the realiability, durability and robustness of our vehicles," Anuj Kathuria, Ashok Leyland's Chief Operating Officer said.
Shares recovered from the day's low to gain 0.4% to Rs 79.2, post the announcement. The stock is up for the sixth straight day and is trading at a seven-month high.
Stock Reaction: HCL Technologies
The company announced on Wednesday that it has expanded its partnership with Google Cloud, to deliver an accelerated business intelligence platform.
HCL Tech will bring its hybrid cloud data warehousing offering - Actian Avlanche, to Google Cloud, the exchange filing said.
"This will deliver improved business performance and the ability to increase business agility, mitigate risk and secure material cost savings in today's demanding business environment," Raghu Chakravarthi of Actian said.
HCL Tech & Google cloud in 2019 had announced the launch of HCL's Google Cloud Ecosystem to accelerate enterprise cloud adoption worldwide.
Shares gained as much as 3.6% to an all-time high of Rs 817.5. The stock snapped a two-day losing streak and is the top gainer on the Nifty 50 index.
Markets At 10:20 A.M.
- Benchmark indices trade with modest losses
- Nifty down 0.3% at 11,569
- Sensex down 0.34% at 39,165
- Nifty Bank down 0.78% at 22,398
- Nifty Midcap index up 0.1%
- Nifty Smallcap index down 0.2%
- India Volatility Index up 1.1%
- Most sectoral indices trade with losses
- Nifty Realty index down 0.7%
- Nifty PSU Bank and Nifty Metal down 0.6% each
- Nifty I.T. and Nifty Pharma are the only sectoral gainers; up 0.7% and 0.4% respectively
- HCL Technologies is the top Nifty gainer; up 2.8%
- Hindalco is the top Nifty laggard; down 2.6%
- 742 stocks on the NSE trade with gains while 913 stocks decline
Money Market Update
The currency has opened with losses in today's session, reversing the recovery made on Wednesday.
The rupee opened at 73.72 against the U.S. Dollar as compared to Wednesday's close of 73.52.
As of the early minutes of trade, the rupee is the fifth worst performing currency in Asia.
Yield on the 10-year government bond opened at 5.983% as compared to Wednesday's close of 5.993%.
Bond market traders are watching for the Reserve Bank of India's Open Market Operations, in which it will buy bonds worth Rs 10,000 crore while simultaneously selling shorter tenor bonds worth Rs 10,000 crore.
Happiest Minds Technologies: Strong Debut
Happiest Minds Technologies Ltd. debuted on the bourses at a 115% premium to its issue price, a week after concluding its initial public offering on a remarkable note.
The stock of the Ashok Soota-promoted information technology company listed at Rs 356.8 apiece compared with the issue price of Rs 166, according to data available on the exchanges.
The Rs 702-crore maiden offer was subscribed 151 times on the final day on bidding on Sept. 9. It received bids for 351.1 crore shares against the total issue size of 2.32 crore.
The category for institutional buyers was subscribed 77.43 times, while non-institutional investors bid 351.46 times. The retail segment subscribed 70.94 times.
The company had raised Rs 316 crore from anchor investors at Rs 165-166 apiece.
Stock Reaction: HSIL
The company's Board of Directors will hold a meeting on September 21, to consider a buyback of shares.
Shares gained as much as 10.5% - the most in five months to Rs 75. The stock has gained in four out of the last five trading sessions. It has gained nearly 20% in the last five trading sessions.
The stock now trades at the highest level since July 2019.
Stock Reaction: JMC Projects
The company informed the exchanges that it has won new orders worth nearly Rs 1,342 crore.
The civil engineering and EPC company won infrastructure projects in East Asia worth Rs 725 crore.
It has also secured water supply projects in Odisha worth Rs 471 crore and building projects in North India worth Rs 146 crore, the exchange filing said.
"We have received orders in the current year exceeding Rs 5,300 crore against the initial guidance of Rs 5,000 crore," SK Tripathi, CEO and Deputy Managing Director said.
The company has accordingly revised its order inflow target for FY21 to Rs 7,500 crore.
"Our strong and diversified order book will help us deliver on growth and profitability targets going forward," Tripathi said.
Shares gained as much as 8.2% to Rs 57.4, post the announcement. The stock snapped a two-day losing streak.
Coronavirus India Update
- India adds close to 1 lakh new Covid-19 cases
- Record spike in new cases for a single day
- 97,894 new cases reported in the last 24 hours
- Total confirmed cases at 51,18,253
- Active cases at 10,09,976
- Patients cured / discharged / migrated at 40,25,079
- Death toll roses to 83,198
- 1,132 deaths reported in the last 24 hours
- 82,719 patients recovered in the last 24 hours
Stock Reaction: Dhanuka Agritech
The company informed the exchanges yesterday that it has fixed September 28, as the record date for its Rs 100 crore share buyback.
The company had approved a buyback of 10 lakh equity shares at Rs 1,000 each on July 22, which was at a near-30% premium to the previous day's closing price.
Promoters of the company will also be participating in the buyback, the release on July 22, had mentioned.
Shares gained as much as 6.6% to Rs 820 and are trading higher for the second straight day.
Opening Bell: A Start With Losses
Indian equity markets began the weekly options expiry session on a negative note, tracking weak global cues.
The S&P BSE Sensex opened 0.46% lower at 39,120 while the NSE Nifty 50 index began trade at 11,539, lower by 0.6%.
Sentiment across the globe is subdued post commentary from U.S. Federal Reserve chair Jerome Powell over uncertain times ahead.
Most sectoral indices have opened lower. The Nifty Bank and the PSU Bank index have opened nearly 1% lower, while the indices of Wednesday's outperformers - Auto and Realty have opened lower by 0.7% each.
Broader markets too have opened lower. Both Nifty Midcap and Nifty Smallcap index have opened with losses of 0.7%.
Market breadth is nearly even. 968 stocks on the NSE opened with gains while 861 are declining.
Trading Strategies For The Day
- Nifty: Sell 11,400 Put of September 24 expiry between Rs 54-56. Target of Rs 40-30 and stop loss of Rs 70
- Nifty Bank: Buy in the range of 22,500-22,550 for target of 22,750-22,900 and stop loss of 22,350
- Buy Sun Pharma futures for target of Rs 527 and Rs 537 with a stop loss of Rs 515
- Sell HPCL September Futures for target of Rs 192 and Rs 186 with a stop loss of Rs 199
- Both Sun Pharma and HPCL are intraday recommendations
Source: ICICI Securities
How Did The Fund Flows Fare On Wednesday
Key Stocks In Focus
- HCL Technologies: Announces expansion of strategic partnership with Google Cloud.
- Aviation Stocks: Civil Aviation Minister Hardeep Singh Puri, in a written reply to parliament said that airline operators have sought government help to ask banks to defer loan repayments by six months and not to classify such loans as an NPA. Carriers have also sought Aviation Turbine Fuel (ATF) to be included under the GST regime and excise duty on jet fuel to be abolished.
- Dhanuka Agritech: Sets September 28 as record date for buyback of shares. The board had approved a buyback worth Rs 100 crore at Rs 1,000 per share on July 22.
- Suven Pharma: September 28 set as record date for bonus issue. The company had approved a 1:1 bonus issue on August 17.
- HSIL: To consider share buy-back on Sept.21.
- Deepak Nitrite: CRISIL upgrades long-term rating outlook of the company's bank loan facilities worth Rs 750 crore to CRISIL AA-/Positive from CRISIL AA-/Stable. It has also re-affirmed the short-term rating as CRISIL A1+.
- India Energy Exchange: Dalmia Cement (Bharat) acquired 70 lakh shares (2.34%) at Rs 206.2 per share and DPVL Ventures sold 70 lakh shares (2.34%) at Rs 206.2 per share.
- SAIL: Citi upgrades to buy from neutral. Price target raised to Rs 50 from Rs 40. Initiates 90-day positive catalyst watch on the stock.
- Happiest Minds Technologies: To list on the bourses today. The issue was subscribed 151 times.
To know more about the stocks in focus, key brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Options Expiry Volatility?
Good Morning!
Today is the expiry of the weekly options contracts of Nifty and Nifty Bank.
Markets ended higher for the second straight day on Wednesday, led by gains in auto, metal and real estate stocks. Media and PSU banks, however, underperformed.
Futures are indicating a negative start to Thursday's trade. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.7% to 11,524 as of 7:45 a.m.
Asian markets are declining after beginning the day's trade on a cautious note. Benchmark indices in Japan, Hong Kong and South Korea are declining, poised to snap a five-day gaining streak.
Futures on the Dow Jones are trading lower by 200 points. The index ended little changed on Wednesday. The S&P 500 and Nasdaq underperformed, courtesy selling in technology shares.
West Texas Intermediate is little changed at $40.2 per barrel. The contract gained 5% overnight. Gold is flat at $1,957.6/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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