KEY HIGHLIGHTS
Closing Bell: Recovery From Day's Low
Indian equity markets recovered from the day's low but ended lower for the second straight day.
The S&P BSE Sensex ended 0.45% lower at 38,193 while the NSE Nifty 50 index ended 0.35% lower at 11,278. The recovery was led by the heavyweight Reliance Industries along with Metal and Pharma stocks.
Among the sectoral indices, the Nifty Bank ended over 450 points or 2.1% lower and were among the top sectoral laggards along with the PSU bank index which ended with losses of 2.9%.
Pharma stocks were the top sectoral gainer, ending 1.9% higher while the Media index ended with gains of 1.2%.
Broader markets ended lower as well. The midcap index ended 0.5% lower while the Smallcap index ended 1.5% lower.
The India Volatility Index ended 2.9% lower at 22.
Market breadth was adverse, with 557 stocks on the NSE ending with gains while 1,276 stocks ending with losses.
How Did The Sectoral Indices Fare
Happiest Minds Technologies IPO
- Overall subscription of 94.99 times
- Institutional subscription at 34.65 times
- Non-Institutional subscription at 235.72 times
- Retail subscription at 64.93 times
Source: Axis Capital As Of 3 P.M.
Buzzing Stock: Lemon Tree Hotels
- Among the top gainers on the Nifty 500 index
- Gains as much as 4.8% to Rs 28.4
- Gains for the first time in seven trading sessions
- Takes support at 50-Day Moving Average of 26.4
- Today's volumes are 70% below its 20-day average
- Has doubled from its 52-week low of Rs 13.8 on May 21, 2020
- Remains 59% lower than its 52-week high of Rs 69.95 on September 24, 2020
- Six out of the 10 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 11.5%
Indian Bank Withdraws AT-1 Bond Sale
The state-run lender has withdrawn a planed Additional Tier-1 bond sale of as much as Rs 2,000 crore, Bloomberg News reports, citing people familiar with the matter.
The lender got bids worth Rs 1,732 crore as compared to the planned sale of Rs 2,000 crore.
It planned to price the notes at a coupon of 8%. However, it got bids in the range of 8.25% to 9.9%.
An Indian Bank spokesperson did not reply to the query sent by Bloomberg News regarding with withdrawal.
Shares fell as much as 4.4% to Rs 58.6 - the lowest in a month. The stock is down for the fourth straight day.
Earnings Reaction: Eveready Industries Q1FY21
- Revenue down 20% to Rs 263.4 crore
- Net profit more than quadruples to Rs 25 crore
- Ebitda up 65% to Rs 41.2 crore
- Ebitda margin at 15.6% from 7.5%
- Share of net loss of associated widens to Rs 34.22 crore from Rs 23.7 crore
- Lower other expenses aid operational performance
- Some intercorporate deposits worth Rs 353.2 crore and interest outstanding thereon worth Rs 79.6 crore are lying outstanding as on June 2020
- Confident of recovering all outstanding dues and do not require provisions
Shares are fluctuating between gains and losses post the announcement. The stock currently trades little changed at Rs 147.1.
Positional F&O Trading Strategies
- Sell Infosys 880 Put between Rs 5.3-5.8 for target of Rs 0.1 and stop loss of Rs 10.6.
- Sell Dr Reddy's 4,000 Put at Rs 27-30 for target of Rs 0.1 and stop loss of Rs 51.1.
- Sell Adani Ports 380 Call at Rs 3.4-3.8 for target of Rs 0.1 and stop loss of 7.
- Sell Bharti Airtel 550 Call at Rs 4.1-4.5 for target of Rs 0.1 and stop loss of Rs 8.5.
- The time frame for all these positional picks is the September expiry
Source: ICICI Securities
Reliance Industries: Active Stock Options
- 2,200 Call: Premium up 51% to Rs 55. The contract has added 34 shares in Open Interest.
- 2,300 Call: Premium up 56.2% to Rs 25. The contract has shed 156 shares in Open Interest.
- 2,140 Call: Premium up 43.8% to Rs 82.9. The contract has added 46 shares in Open Interest.
Buzzing Stock: Jubilant Life Sciences
- Worst performer on the Nifty Midcap index
- Down as much as 8.4% to Rs 686
- Biggest single-day fall in over five months
- Trades at the lowest level in nearly two months
- Down for the third straight day
- Has declined 16% in the last three trading sessions
- Today's volumes are 93% higher than its 20-day average
- Broke below its 50-Day Moving Average of 772 on Tuesday
- Has declined 25% from its 52-week high of Rs 909 on August 4, 2020
- 10 out of the 13 analysts tracking the stock have a buy recommendation; 2 sell calls
- Brokergae firm Nomura maintained its buy rating on the stock and raised its price target to Rs 943 from the earlier target of Rs 779.
- Return potential of the stock as per Bloomberg data is 21.4%
Stock Update: State Bank of India
The committee of directors for capital raising of India's largest lender has accorded approval to allot 40,000 Basel-III compliant, non-convertible, taxable, perpetual, subordinate, unsecured, fully paid-up debt instruments.
The debt instruments are in the nature of debentures, qualifying as AT-1 capital of the bank. The debentures will have a face of Rs 10 lakh each, aggregating to Rs 4,000 crore and wilk bear a coupon of 7.74% payable annually.
The instrument will have a call option after five years or any anniversary date thereafter.
Share are currently trading at the day's low, down as much as 5.5% to Rs 192.85, its lowest level in a month.
Markets At 2:10 P.M.
- Benchmark indices off the day's low
- Nifty down 0.55% at 11,254
- Sensex down 0.6% at 38,141
- Nifty Bank down 2.3% at 22,214
- Nifty Midcap index down 0.8%
- Nifty Smallcap index down 1.8%
- India Volatility Index flat at 22.67
- Nifty PSU Bank index remains the top sectoral laggard; down 3.3%
- Nifty Media and Nifty Pharma are bucking the trend; up 1.4% and 1.6% respectively
- Nifty Realty is the other major sectoral laggard; down 1.4%
- Zee Entertainment is the top Nifty gainer; up 3.5%
- State Bank of India remains the top Nifty laggard; down 4.8%
- 385 stocks on the NSE trade with gains while 1,435 decline
Money Market Update
The currency ended with modest gains in today's session, snapping a two-day losing streak.
The rupee ended at 73.53 against the U.S. Dollar as compared to Tuesday's close of 73.6.
After two straight days of being the worst performer in Asia, the rupee ended as the third best performing currency in Asia, behind the Thai Baht and the Offshore Chinese Renminbi.
Prospects for the currency were boosted post the Reliance-Silver Lake deal.
"Spot 74 remains as a strong resistance and only a consistent trading above that will open doors for 74.50 zone. While, 73.35 will act as a strong support,” Rahul Gupta of Emkay Global said.
Yield on the 10-year government bond ended at 5.988% as compared to Tuesday's close of 6.034%.
Stock Reaction: HCL Technologies
The I.T. services company has announced a collaboration with PTC and HPC to take its real-time manufacturing insights solution to the next level.
The entire RMI solution can now be deployed close to the factory set-up for faster results, the company said in a filing.
"Our collaboration with PTC and HPE goes beyond the dotted lines. It's a commitment to work together towards scaling this superior solution in the market, thereby mutually benefiting our manufacturing customers and the overall industry," Sukamal Banerjee, Corporate VP and Head-IoT works of HCL Technologies was quoted as saying.
Shares gained as much as 0.4% and are trading at an all-time high of Rs 728.8. The stock is up for the third straight day.
Stock Reaction: Cadila Healthcare
The drugmaker announced that it has received tentative approval from the U.S. FDA to market Empagliflozin and Linagliptin tablets in the strengths of 10 mg/5 mg and 25 mg/5 mg.
The drug is used together with diet and exercise to improve blood sugar control in adults with type 2 diabetes mellitus, the company said in a statement.
The drug will be established at the company's formulations manufacturing facility at SEZ, Ahmedabad.
Shares are trading little changed at Rs 365.5, post the announcement.
Nifty Pharma Bucking The Trend
How Are The Sectoral Indices Faring
Vehicle Registration Data For August
- Vehicle registrations for August improve due to festivities, when compared month-on-month, but remain 27% lower on a year-on-year basis
- Entry level passenger vehicles show initial signs of demand revival
- Overall demand still not back to pre-covid levels
- Risk averse mood of banks, NBFCs, coupled with stricter CIBIL scores fails to capture the demand
- Retail sales are still at 70-75% level despite low base of last year.
- Total vehicle registrations down 26.8% to 11,88,087 units
- Two-wheeler registrations down 28.7% to 8,98,775 units
- Three-wheeler registrations down 69.5% to 16,857 units
- Commercial Vehicle registrations down 57.4% to 26,536 units
- Passenger Vehicle registrations down 1,78,513 units
- Tractor registrations up 27.8% to 67,406 units
Source: FADA
Buzzing Stock: State Bank of India
- Top laggard on the Nifty 50 index
- Top laggard on the PSU Bank index
- Falls as much as 4.9% to Rs 194.1
- Trades at the lowest level in nearly a month
- Down for the second straight day
- Has gained only twice in the last eight trading sessions
- Today's volumes were on par with its 20-day average
- Breaks below its 50-Day Moving Average of 196.8
- Down 45% from its 52-week high of Rs 351 on November 28, 2019
- 49 out of the 53 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 38%
PSU Bank Index Is The Top Sectoral Laggard
Markets At Noon
- Benchmark indices continue to hold losses
- Nifty down 0.8% at 11,227
- Sensex down 0.8% at 38,058
- Nifty Bank down 2.3% to Rs 22,219
- Nifty Midcap index down 1.5%
- Nifty Smallcap index down 2.3%
- India Volatility Index up 1.3% at 23
- Nifty PSU Bank index extends losses as the top sectoral laggard; down 3.4%
- Nifty Realty is the other major sectoral laggard; down 2%
- Nifty Media, Nifty Metal index down over 1.5% each
- Nifty Pharma is the only sectoral gainer; up 0.9%
- Hero MotoCorp remains the top Nifty gainer; up 1.3%
- State Bank of India is the top Nifty laggard; down 4.5%
- 296 stocks on the NSE trade with gains while 1,477 stocks decline
Has The Nifty Made A Top?
Mutual Fund Data For August
- Net equity outflow of Rs 4,000 crore from outflow of Rs 2,480 crore month-on-month
- Total Mutual Fund industry saw outflows of Rs 14,553 crore as compared to inflows of Rs 89,813 crore
- Equity AUM up 5% month-on-month to Rs 7,66,691 crore
- Total Mutual Fund Industry AUM up 2% month-on-month to Rs 27,78,150 crore
- Liquid funds saw outflows of Rs 15,814 crore as compared to inflows of Rs 14,055 crore
- Balanced funds outflows widen to Rs 2,355 crore from Rs 2,196 crore
- SIP contribution in August at Rs 7,791.6 crore - down for the fifth straight month.
Source: AMFI
Brokerages On Life Insurance Data For August
Nirmal Bang:
- New business sales in the industry seem to be holding the momentum
- Remain positive on long-term growth prospects of the life-insurance industry
- Earlier expectation was that FY21 would see subdued demand for investment-related products
Jefferies:
- Flows are back to pre-Covid levels
- LIC gained share indicating absence of ULIPs and a strong brand recall
- Market share of private players likely to contract in FY21
- Expect resumption of trend of private players gaining share from FY22
- Smaller private players see positive growth on lower base
Motilal Oswal:
- Overall decline as moderated over levels seen between March-May 2020
- LIC continues to outperform albeit at a slower pace
- Divergent trends in sum assured reflecting improving business mix
Shares of HDFC Life gained as much as 1.9% to Rs 593. It is among the top performers on the Nifty 50 index.
Shares of SBI Life fell as much as 2.7% to Rs 822.
Shares of ICICI Prudential fell as much as 2.7% to Rs 430.1.
Stock Reaction: Steel Strips Wheels
The company has informed the exchanges that it has won export orders of nearly 1.1 lakh wheels from the U.S. Caravan Trailer market.
The order is worth $1.07 million, the company said in an exchange filing.
Execution of this order will take place in the month of November from the company's Chennai plant.
The company expects more orders of similar capacity going forward as well.
Shares fell as much as 3.8% to Rs 432.3, before recovering marginally post the announcement. The stock is down for the second straight day.
Earnings Reaction: Spencers Retail Q1FY21
- Revenue down 9% to Rs 547 crore
- Net loss widens to Rs 55 crore from Rs 3 crore
- Ebitda loss of Rs 11.3 crore from Ebitda gain of Rs 21.8 crore
- Restricted operating hours and non-food sale restrictions impact revenue
- Revenue from non-food categories over 28% in Q1
- Natures Basket has reported its first-ever positive Ebitda within one year of acquisition
- Launched health advisor program in collaboration with Dr Lal Pathlabs
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 5.7% to Rs 82.7. The stock has snapped a four-day losing streak.
IndusInd Bank: Only Gainer On The Nifty Bank Index
Buzzing Stock: Escorts
- Top gainer on the Nifty Midcap index
- Gains as much as 3.8% to Rs 1,163.9, in a weak market
- Snaps three-day losing streak
- Today's volumes are double its 20-day average
- Broke below the 50-Day Moving Average at 1,129 on Tuesday, back above that mark.
- Brokerage firm JPMorgan had initiated coverage on the stock on Tuesday with an overweight rating and a price target of Rs 1,450
- Remains close to its all-time high of Rs 1,235 on September 3, 2020
- 23 out of the 28 analysts tracking the stock have a buy recommendation; one sell call
- Return potential of the stock as per Bloomberg data is 8.9%
Earnings Reaction: Dishman Carbogen Amcis Q1FY21
- Revenue down 9.1% to Rs 474.4 crore
- Net loss of Rs 21.4 crore from net profit of Rs 34.3 crore
- Ebitda down 63.9% to Rs 43.1 crore
- Ebitda margin at 9.1% from 22.9%
- All numbers are consolidated and compared on a year-on-year basis
Management Commentary:
- Strong basked of 18 APIs in phase III development
- Focus on bettering capacity utilisation by targeting small and mid-sized global biotech companies
- Expect performance to normalise during the coming quarters
- CRAMS business contributed 73.4% to total operating revenue during the quarter
- Lower sales of CRAMs in India business impacted due to Covid-19 and EDQM audit
- Forex loss of Rs 14.9 crore on account of forex hedges and MTM on certain forex loans
- Net debt currently at $99.1 million
Shares are locked in a 5% lower circuit at Rs 170.55. The stock is down for the third straight day.
Stock Reaction: Dr Reddy's Laboratories
The drugmaker announced the launch of Remdesivir - under the brand name Redyx, in India.
The launch is part of the licensing agreement with Gilead Sciences, that grants the company the right to register, manufacture and sell Remdesivir - a potential treatment for Covid-19, the company said in a statement.
"We will continue our efforts to develop products that address significant unmet needs of patients," MV Ramanna, CEO of Branded Markets (India & EM) of Dr Reddy's, was quoted as saying.
Shares gained as much as 1% to Rs 4,389, post the announcement.
Markets At 10:20 A.M.
- Benchmark indices decline for the second straight day
- Nifty down 0.7% at 11,238
- Sensex down 0.7% at 38,095
- Nifty Bank down 1.7% at 22,356
- Nifty Midcap index down 1.3%
- Nifty Smallcap index down 2%
- India Volatility Index up 0.6% to 22.86
- Nifty PSU Bank index is the top sectoral laggard; down 2.6%
- Nifty Realty, Nifty Metal down 1.5% each
- Nifty Media, Nifty Pharma indices trade little changed
- Hero MotoCorp is the top Nifty gainer; up 1.6%
- ONGC is the top Nifty laggard; down 3.4%
- 37 out of the 50 Nifty constituents decline
- 292 stocks on the NSE trade with gains while 1,420 decline
KKR In Advanced Talks For $1 Billion Reliance Retail Stake
KKR is in advanced talks to invest at least $1 billion in the retail business of Reliance Industries, Bloomberg News reports citing people familiar with the matter.
The Private Equity firm can investment as much as $1.5 billion and an announcement could come as soon as this month, the sources said.
This comes immediately after Silver Lake invested over $7,500 crore rupees in Reliance Retail.
Shares of Reliance Industries are currently off the day's high, trading 0.4% higher at Rs 2,115.
Money Market Update
The rupee has opened weaker for the third day in a row, in-line with the weakness in the equity markets.
The rupee opened at 73.66 against the U.S. Dollar as compared to Tuesday's close of 73.6. It was the worst performing currency in Asia for the second straight day.
Yield on the 10-year government bond opened at 6.034% against the U.S. Dollar as compared to Tuesday's close of 6.057%.
Bond markets await the second half borrowing schedule with trepidation, according to a note from DBS. The note said that the full-year issuance might rise beyond the Rs 12 trillion planned earlier.
Coronavirus India Update
- India back to reporting close to 90,000 cases in a single day after a one-day gap
- 89,706 new cases reported in the last 24 hours
- Total confirmed cases now at 43,70,128
- Active cases at 8,97,394
- Patients cured / discharged / migrated at 33,98,844
- Death toll rises to 73,890
- 1,115 deaths reported in the last 24 hours
- 74,894 patients recovered over the last 24 hours
Stock Reaction: Indian Hume Pipe Company
The company has informed the exchanges that it received a Letter of Award for works worth Rs 134.8 crore, excluding GST from the Government of Odisha.
The project involves execution of rural piped wwater supply projects to Kashinagar and Gumma block of Gajapati.
This is a five year operations and maintenance contract on an EPC basis, the company said in an exchange filing.
The project is to be completed within a period of two years.
Shares gained as much as 5.6% to Rs 182.8. The stock has snapped a three-day losing streak.
Stock Reaction: Reliance Industries
The company has informed the exchanges that private equity player Silver Lake will be investing Rs 7,500 crore into Reliance Retail, a subsidiary of the comapny.
The investment s Reliance Retail at a pre-money equity of Rs 4.21 lakh crore, as per the company's exchange filing.
The amount invested will translate into a 1.75% equity stake for Silver Lake in Reliance Retail on a fully diluted basis.
Silver Lake had earlier invested $1.35 billion in Jio Platforms.
The success of JioMart in such a short time span, especially while India, along with the rest of the world, battles the Covid-19 pandemic, is truly unprecedented, and the most exciting growth phase has just begun.Egon Durban, Co-CEO and Managing Partner, Silver Lake
“I believe this is just the beginning of RIL getting financial investors in the retail platform. Undoubtedly, it is an interesting platform which they have created and we will see many more investors coming in,” Sudip Bandopadhay of IndiTrade Capital told BloombergQuint.
Shares recovered from the day's low to gain as much as 1.5% to Rs 2,139, post the announcement. The stock is up for the third straight day.
Stock Reaction: AstraZeneca Pharma India
Shares of the MNC pharma company are declining in today's session after its parent, AstraZeneca Plc stopped giving shots of its experimental Covid-19 vaccine.
The step was taken after one person participating in the company's studies got sick, Bloomberg News reported.
The pause stemmed from a standard review of the company’s vaccine trials after one person developed an unexplained illness, AstraZeneca said in a statement.
The vaccine developed by AstraZeneca, along with researchers from the University of Oxford is being viewed as a leading candidate to reach the market.
In late trading in New York, shares of AstraZeneca fell as much as 8.3% while Moderna Inc. and BioNTech saw their shares rise.
Shares of the Indian unit fell as much as 13.7% - the most in over five months to Rs 3,650. The stock is down for the second straight day.
Opening Bell: A Weak Start
Indian equity markets opened lower for the second straight day, tracking a sell-off in global equities amidst concerns of a delay in a potential vaccine for Covid-19.
The S&P BSE Sensex opened 1% lower at 37,988 while the NSE Nifty 50 opened near the mark of 11,200, down 0.9% at 11,218.
Among the sectoral indices, the Nifty Bank index opened 1.1% or over 250 points lower.
The metal index is the top sector laggard, opening 1.8% lower while the PSU Bank and Media index are down 1.5%.
The Nifty Realty and Nifty Auto index have also opened lower by 1%.
Broader markets are declining in-line with benchmarks. The midcap index has opened 1.1% lower while the smallcap index is down 1.2% at the start of trade.
371 stocks on the NSE opened with gains while 1,187 stocks declined.
Latest On The Coronavirus
- Global cases surpass 27.4 million
- Death toll rises to 8.96 lakh
- AstraZeneca Plc paused its late-stage study after a person participating in the trial fell ill.
- Argentina reports 12,027 new Covid-19 cases along with 228 deaths
- South Korea reports 156 new cases
- Mexico reports 5,351 new cases along with 703 deaths
- Texas added 1,416 new cases - the lowest one-day figure since June 15
- California reports 2,676 new cases, the lowest since mid-June
- India to begin third phase trial of Covid-19 from the University of Oxford next week.
How Did The Fund Flows Fare On Tuesday
Key Stocks In Focus
- Power Grid: Cabinet approves asset monetisation of subsidiaries through an Infrastructure Investment Trust. Proceeds from the asset monetisation can be utilised for fresh investments in the expansion of transmission network and other capital schemes. The company will be able to monetise five tariff-based competitive bidding assets worth Rs 7,164 crore in the first block.
- Edelweiss: Arm Edelweiss Broking is exploring various alternatives to expand its client base and has entered into non-disclosure agreements with target entities.
- Bharat Dynamics: Offer for Sale to non-retail investors gets 1.4 times the demand. The government will exercise the oversubscription option. The OFS for retail investors opens today with a discount of Rs 20 per share on the cut-off price.
- NTPC: Signs pact to implement 27 solar projects overseas. To add another 5GW solar capacity over the next two years.
- JSPL: The company in its annual report has stated that it is confident of producing 7-7.5 million tonnes of steel in FY21, implying a 15% volume growth for its standalone business. The report also said that the demand for long products may remain strong going ahead as the lockdown eases and government spending rises.
- Indian Hume Pipe: Gets work orders worth Rs 134.8 crore from the government of Odisha for rural water supply projects.
- Happiest Minds Technologies IPO: Overall subscription of 8.4 times at the end of day 2. Institutional investor subscription at 0.47 times while non-institutional investor subscription at 3.96 times. Retail subscription at 38.85 times.
- Route Mobile: IPO opens for subscription today. The company has raised Rs 180 crore from 15 anchor investors be allocating 51.43 lakh shares at Rs 350 per share. Anchor investors include Goldman Sachs, Franklin Templeton, SBI Mutual Fund, ICICI Prudential, Kuwait Investment Authority among others.
- Non-Nifty Earnings Today: Eveready Industries, Indiabulls Ventures, Shriram EPC.
To know more about the key stocks in focus, brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
More Declines In Store?
Good Morning!
The Sensex and Nifty 50 ended with losses in yet another choppy trade on Tuesday amid sustained selling pressure in banks, pharma, and metal stocks.
And futures are indicating further downside on Wednesday as well. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.4% to 11,268 as of 7:40 a.m.
The retail portion of the Bharat Dynamics OFS will open for subscription today, besides the IPO of Route Mobile. Today is also the final day to bid for the maiden offer of Happiest Minds Technologies, which has subscribed more than 8 times in the first two days.
Markets in Asia have opened lower amid worries that a Covid-19 vaccine could be delayed. Benchmarks in Japan and South Korea are declining, though the losses are modest compared to their peers on Wall Street.
Futures on the Dow Jones are off the lows, currently trading 40 points lower, while the Nasdaq futures trade 80 points higher. The Dow fell over 2%, while the Nasdaq declined 5% overnight as the selloff in technology shares continued.
Brent Crude fell below the $40-per-barrel mark for the first time since June, as a stalling consumption recovery in Asia and increased supply from OPEC+ signaled a bleak short-term outlook.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
RECOMMENDED FOR YOU
POPULAR