KEY HIGHLIGHTS
A Subdued Week For The Markets
Closing Bell: Weekly Gains Due To RIL
Indian equity markets ended almost unchanged in today's trading session, resulting in gains for the week.
Both S&P BSE Sensex and the NSE Nifty 50 ended at nearly the same levels as of Thursday at 38,854 and 11,464 respectively. The Sensex traded in a 250 point range through the session while the Nifty was stuck in a 70 point range.
I.T. and Realty stocks outperformed in today's session. The respective indices ended with gains of 1.3% each. Other sectoral gainers included the Nifty Metal and Nifty FMCG, with gains of 0.6% each.
The Media index was the only sectoral laggard; ending 0.9% lower.
Broader markets outperformed in today's session. The midcap index ended 0.7% higher while the smallcap index ended with gains of 0.3%.
India Volatility Index ended 2.7% lower at 20.68.
Market breadth was almost even. 961 stocks on the NSE ended with gains while 836 stocks declined.
For the week, both benchmark indices ended with gains of over 1%. Reliance Industries was the top contributor to the gains, contributing almost 180 points to the gains for the week.
Asset Recoveries Impacted By Covid-19
Large Trade Alert: JSW Energy
30 lakh shares of the company exchanged hands in a single large trade on the exchanges, as per Bloomberg data.
Buyers and sellers of the trade were not immediately known.
Shares are off the day's low, after falling as much as 3.7% to Rs 58.4.
Buzzing Stock: Container Corporation of India
- Among top gainers on the BSE Midcap index
- Gains as much as 4.7% to Rs 384.6
- Biggest single-day gain in three months
- Snaps two-day losing streak
- Today's volumes were double its 20-day average
- Remains below its 100-Day Moving Average of 399
- Has gained 46% from its 52-week low of Rs 263.2 on March 25, 2020 but remains 42% below its 52-week high of Rs 665 on October 1, 2019
- 18 out of the 38 analysts tracking the stock have a buy recommendation; 4 sell calls
- Brokerage firm Jefferies maintained its buy rating on the stock with a price target of Rs 525 and a bull case price target of Rs 700
- Return potential of the stock as per Bloomberg data is 13.6%
Earnings Reaction: Rail Vikas Nigam Q1FY21
- Revenue up 2% to Rs 2,910 crore
- Net profit down 23% to Rs 141 crore
- Ebitda down 15% to Rs 140.7 crore
- Ebitda margin at 4.8% from 5.8%
- Covid-19 has impacted businesses and economic activities in general
- Revenue growth impacted and only nominal compared to the normal growth rate in recent years
- Expect to fully recovery the carrying amounts of the assets and comfortably discharge its obligations
- Positive on the long-term business outlook as well as financial positions
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 5.5% to Rs 22, before cooling off. The stock is up for the second straight day.
Media Index Is The Top Sectoral Laggard
Stock Reaction: HCL Technologies
The technology services player announced that it has joined NVIDIA Partner Network (NPN) - the U.S.-based technology company's partner program, in order to expand opportunities in the Artificial Intelligence space.
The company also announced the launch of NEXT.ai, its Artificial Intelligence lab, focused on upskilling engineers and architects, utilising AI solutions across hardware and software technology attacks.
NEXT.ai lab is powered by two NVDIA DGX-1 systems, which enables accelerated delivery of AI solutions.
Shares gained as much as 1.6% to an all-time high of Rs 734, post the announcement. The stock is up for the second straight day.
Earnings Reaction: Adani Green Energy Q1FY21
- Revenue up 17.8% to Rs 778.5 crore
- Net profit of Rs 45.3 crore from net loss of Rs 96 crore
- Ebitda up 13.5% to Rs 514 crore
- Ebitda margin at 66% from 68.5%
- Net exports up 24% to 1,382 million units
- Revenue from power supply up 10% to Rs 609 crore
- Current capacity under operation stands at 14 GW
- On track to achieve 25 GW renewable power target by 2025
- Solar CUF steady at 24.8% while Wind CUF improves to 40.1% from 35.8%
- All numbers compared on a year-on-year basis
Shares are locked in an upper circuit of 5% at Rs 608.7. The stock trades at a record high.
Markets At 2:10 P.M.
- Benchmark indices continue to trade in a narrow range
- Nifty unchanged at 11,456
- Sensex unchanged at 38,836
- Nifty Bank down 0.6% at 22,330
- Nifty Midcap index up 0.3%
- Nifty Smallcap index unchanged
- India Volatility Index down 1% to 21
- Nifty I.T. remains the top sectoral gainer; up 1.4%
- Nifty Realty is the other major sectoral gainer; off the day's high but up 1%
- Nifty FMCG and Nifty Auto are the other sectoral gainers
- Nifty Media is the top sectoral laggard; down 1%
- Wipro remains the top Nifty gainer; up 3.8%
- Zee Entertainment is the top Nifty laggard; down 2.5%
- 911 stocks on the NSE trade with gains while 864 decline
Money Market Update
The currency ended with losses in today's session, capping off a topsy-turvy week of trade.
The rupee ended at 73.54 against the U.S. Dollar, as compared to Thursday's close of 73.46. It snapped a two-day gaining streak post today's losses.
For today's session, the rupee was the third worst performing currency in Asia, ahead of the Indonesian Rupiah and the South Korean Won.
For the week though, the rupee declined as much as 0.5%, ending as the second worst performing currency in Asia ahead of the Indonesian Rupiah.
Yield on the 10-year government bond ended at 6.028% as compared to Thursday's close of 6.053%.
Underwriters stepped in to rescue a sale of Indian sovereign bonds, the third such instance in the last five auctions, Bloomberg News reports.
Primary dealers brought Rs 17,970 crore out of a possible Rs 18,000 crore worth of the benchmark 10-year bond.
The bonds were sold at 6.0214% as compared to 6.08% projected in a Bloomberg survey.
Active Stock Options
- Reliance Industries' 2,500 Call: Premium down 3% to Rs 20.7. The contract has added 4.3 lakh shares in Open Interest.
- Maruti Suzuki's 7,500 Call: Premium down 6% to Rs 92.2. The contract has added 47,100 shares in Open Interest.
- Wipro's 300 Call: Premium up 94% to Rs 6.3. The contract has added 9.9 lakh shares in Open Interest.
Vedanta In Talks To Boost Funding For Delisting
Vedanta Resources Ltd. is in talks with lenders to raise another $600 million to fund the planned de-listing of its Indian unit, people with knowledge of the matter told Bloomberg News.
In case the financing is secured, it will take the total fund raising for the delisting to $3.75 billion.
The additional $600 million is likely to be a 3-6 month loan, backed by dividend or cash accrued from the company's subsidiary Hindustan Zinc.
Final decision on additional funding will depend on the tender offer price the company offers shareholders.
Vedanta had signed a three-month bridge loan for $1.75 billion with five banks and raised another $1.4 billion in bonds to fund the delisting.
Shares trade near the day's low, down 2.4% to Rs 127.3.
F&O Snapshot: Active Options Contracts
- Nifty September futures add 12.7% and 12.8 lakh shares in Open Interest
- Nifty Bank September futures add 26.4% and 3.7 lakh shares in Open Interest
Nifty: September 17 Expiry
- 11,500 Call: Premium down 7.6% to Rs 76.45. The contract has added 16.9 lakh shares in Open Interest.
- 11,400 Put: Premium down 8.2% to Rs 83.25. The contract has added 14.75 lakh shares in Open Interest.
- 11,600 Call: Premium down 13% to Rs 37.5. The contract has added 8.1 lakh shares in Open Interest.
Nifty Bank: September 17 Expiry
- 22,000 Put: Premium up 10% to Rs 209.85. The contract has added 3.42 lakh shares in Open Interest.
- 23,000 Call: Premium down 34.6% to Rs 118.65. The contract has added 4.6 lakh shares in Open Interest.
- 22,500 Call: Premium down 32% to Rs 257.6. The contract has added 6.13 lakh shares in Open Interest.
Buzzing Stock: Mannapuram Finance
- Second best performer on the Nifty Midcap index
- Gains as much as 6% to Rs 156
- Biggest single-day gain in over four month
- Up for the third straight day
- Today's volumes are more than double its 20-day average
- Breaks above 100-Day Moving Average at 146.5 and 200-Day Moving Average at 149.7
- Has doubled from 52-week low of Rs 74.2 on March 19, 2020
- 9 out of the 13 analysts tracking the stock have a buy recommendation; 0 sell call
- Return potential of the stock as per Bloomberg data is 20.2%
European Markets Open Flat
Benchmark indices opened lower, underperforming the peers in Asia. Indices are mostly flat for the week.
The Stoxx 600 has opened 0.2% lower with oil & gas and banking stocks leading the losses. Telecom and household stocks are trading with gains.
Most Asian Markets have ended higher while futures on the Dow Jones are trading higher by 155 points.
Brent crude trades 0.5% lower at $39.86 per barrel while Gold is 0.2% lower at $1,942.3/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 down 0.2% at 3,307
- DAX down 0.24% at 13,178
- CAC down 0.2% at 5,013
- FTSE 100 unchanged at 6,000
- IBEX 35 down 0.3% at 6,978
How Are The Sectoral Indices Faring
Stock Reaction: Granules India
The company informed the exchanges that it U.S. subsidiary has received approval from the U.S. FDA to market Dexmethylphenidate HCI extended-release capsules.
The drug is used in the treatment of Attention Deficit Hyperactivity Disorder (ADHD).
The drug had a market size of $556 million for the most recent 12-months ending July 2020 as per IQVIA, and will be manufactured at the company's facility in Virginia.
"The product is a good addition to our portfolio and we will be launching the product in the U.S. market soon," Priyanka Chigurupati, Executive Director of Granules Pharmaceuticals was quoted as saying.
Shares fell as much as 4.4% to Rs 345.5. The stock is down for the second straight day.
I.T. Index Up For Four Out Of The Five Sessions This Week
Stock Reaction: Steel Strips Wheels
The company has informed the exchanges that it has received new export orders of nearly 2,700 wheels from the U.S. truck trailer market.
The order is for nearly 2,700 wheels at a cost of $1,14,000, the company said in an exchange filing.
The order will be executed from the company's Chennai plant during the month of October.
The company expects similar orders going forward as well, the statement said.
Shares gained as much as 2.5% to Rs 454, post the announcement. The stock is up for the second straight day.
Markets At Noon
- Benchmark indices remain unchanged in a muted day of trade
- Nifty unchanged at 11,444
- Sensex unchanged at 38,806
- Nifty Bank down 0.4% to 22,371
- Nifty Midcap index up 0.2%
- Nifty Smallcap index up 0.1%
- India Volatility Index down 0.9% to 21.07
- Nifty I.T. index is the top sectoral gainer; up 1.4%
- Nifty Realty is the other major sectoral gainer; up 1.2%
- Nifty Auto and Nifty FMCG up 0.3% each
- Most other sectoral indices trade with a negative bias
- Wipro is the top gainer on the Nifty; up 3%
- IndusInd Bank is the top laggard on the Nifty; down 1.8%
- 944 stocks on the NSE trade with gains while 775 decline
Buzzing Stock: Strides Pharma
- Second best performer on the Nifty Smallcap index
- Gains as much as 6.9% to Rs 649.9
- Biggest single-day gain in three weeks
- Trades at the highest level since April 2018
- Trading near its all-time high level of 653 on August 27, 2020
- Snaps three-day losing streak
- Today's volumes are 68% higher than its 20-day average
- Stock heading towards overbought territory with Relative Strength Index (RSI) at 67
- Has more than doubled from its 52-week low of Rs 268 on March 20, 2020
- All 10 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 1.2%
RBI Sets Compliance Rules For Banks
The Reserve Bank of India has set guidelines for uniform compliance practices at Indian banks to align with rules on supervision.
The rules include a board-approved policy by banks with special emphasis on quality of supervisory reports to the RBI, according to a circular.
A senior executive of a bank must be appointed as the chief compliance officer for a minimum three-year tenure and the offer should not be more than 55-years of age.
The compliance structure should be subject to internal audit and its quality assurance should be subject to an external review.
From Bloomberg
Stock Reaction: National Fertilisers
The company informed the exchanges that total fertiliser sale during the period of April-August this year saw a growth of 16% to 23.81 lakh MT. This compared to the previous year figure of 20.57 lakh MT.
Production for the company too saw a growth of 13% year-on-year. It managed to product 16.11 lakh MT of Urea during the April-August period, as compared to 14.26 lakh MT last year.
Shares rose as much as 4.5% to Rs 36.8 and are up for the second straight day.
Buzzing Stock: Emami
- Trades at the highest level since April 2019
- Gains as much as 3.1% to Rs 390
- Up for the third straight day
- Has gained in eight out of the last 10 trading sessions
- Saw a breakout above its 200-Day Moving Average on August 10, 2020. The stock has gained 51% since the breakout.
- Today's volumes are 66% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 74
- Has tripled from its 52-week low of Rs 131 on March 30, 2020
- 22 out of the 31 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 19.9% higher than its 12-month consensus price target of Rs 310.1, implying a negative return potential
SIAM Data For The Month of August
- Total Passenger Vehicle sales up 14.1% to 2,15,196 units
- Passenger sales up 14.1% to 1,24,715 units
- April-August Passenger Vehicle sales down 49.1%
- April-August Passenger Car sales down 54.3%
- Two wheeler sales flat at 15,59,665 in August
- Scooter sales down 12.3% to 4,56,848 units
- Utility Vehicle sales up 15.5% to 81,842 units
- Motorcycle sales up 10.1% to 10,32,476 units
- Three-wheeler sales down 75.3% to 14,534 units
Buzzing Stock: Wipro
- Top gainer on the Nifty 50 index
- Gains as much as 3.4% to Rs 294.3
- Biggest single-day gain in nearly two months
- Trades at the highest level since June 2019
- Up for the fifth straight day
- Longest winning streak in three months
- Today's volumes are 86% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 72
- Is close to doubling from its 52-week low of Rs 159 on March 19, 2020
- 19 out of the 48 analysts tracking the stock have a buy recommendation; 16 sell calls
- The stock trades 12.9% higher than its 12-month consensus price target of Rs 255.4, implying a negative return potential
Debt Relief Panel To Add Uncertainty?
A new committee set up by the government to assess issues related to interest relief sought by borrowers can create further uncertainty on how to handle the record levels of bad debt, Bloomberg news reports.
The government on Thursday set up a three-member panel to assess the impact of waiving interest accrued on loans frozen through to August 31.
"Creating another panel will create uncertainty in the minds of lenders, borrowers and investors," Karthik Srinivasan of ICRA said.
A waiver on interest on loans during the moratorium would mean that banks will have to forgo as much as Rs 2 lakh crore for the six-month repayment freeze.
The committee is set to submit its report within a week and the court will hear the case on September 28.
Buzzing Stock: Coforge
- Best performing stock on the Nifty Midcap index
- Gains as much as 6% to Rs 2,025
- Biggest single-day gain in two months
- Trading near its all-time high level of Rs 2,079 on August 11, 2020
- Gains for the second straight day
- Has gained in four out of the last five trading sessions
- Today's volumes are five times higher than its 20-day average
- Trading at a 20% premium to peers on a blended forward price-to-earnings basis
- Has nearly tripled from its 52-week low of Rs 735 on March 24, 2020
- 13 out of the 22 analysts tracking the stock have a buy recommendation
- The stock trades 8.2% higher than its 12-month consensus price target of Rs 1,832.4, implying a negative return potential
Nifty Realty Is The Top Sectoral Gainer
Brokerage Reaction: Cummins India
Shares of the company are declining in today's session, after brokerage firm UBS downgraded it to sell from the earlier rating of buy, citing muted revenue growth prospects going ahead.
UBS’ Rationale:
- Muted revenue growth due to persistent slowdown in industrial demand
- Domestic demand recovery outlook remains hazy even in FY22
- Margins likely to remain under pressure
- Expect margins to expand 140 basis points by FY22 from the 20-year low in FY20
- Shares are not adequately discounting the medium-term headwinds
UBS has cut its price target to Rs 390 from the earlier target of Rs 415. Shares fell as much as 3.8% - the most in two months to Rs 452.5, down to the lowest level in nearly a month. It is the worst performing stock on the Nifty Midcap index.
Markets At 10:10 A.M.
- Benchmark indices little changed after Thursday's surge
- Nifty unchanged at 11,445
- Sensex unchanged at 38,816
- Nifty Bank down 0.3% at 22,406
- Nifty Midcap index up 0.4%
- Nifty Smallcap index up 0.3%
- India Volatility Index flat at 21.22
- Nifty Realty is the top sectoral gainer; up 2.2%
- Nifty FMCG is the other major sectoral gainer; up 0.6%
- Nifty Media, Nifty I.T. trade with modest losses
- Bharti Infratel is the top Nifty gainer; up 3.5%
- Adani Ports is the top Nifty laggard; down 2.1%
- 1,003 stocks on the NSE trade with gains while 649 decline
Money Market Update
The currency has opened flat in today's session after ending higher for the second straight day on Thursday.
The rupee opened at 73.48 against the U.S. Dollar as compared to Thursday's close of 73.46.
Yield on the 10-year government bond opened at 6.047% as compared to Thursday's close of 6.053%.
Bond market traders will keep an eye on the government's plan to sell bonds worth Rs 30,000 crore.
The Reserve Bank will also hold 56-day term repo auctions today worth Rs 50,000 crore.
Traders are lightening their sovereign bond positions on supply worries, advance tax outflows and inflation data next week, according to AU Small Finance Bank.
Stock Reaction: Amber Enterprises
The company informed the exchanges that it has raised Rs 400 crore through its QIP issue which opened on September 7 and was closed on September 10.
The company will now allot close to 22.5 lakh shares at eligible qualified buyers at an issue price of Rs 1,780 per share.
The issue price is a 1% discount to the floor price set for the QIP issue.
33 lakh shares of the company exchanged hands in a single large trade at the start of the session, as per Bloomberg data. Buyers and sellers are unknown.
Shares fell as much as 3.75% to Rs 1,835 and are down for the second straight day.
Coronavirus India Update
- India reports yet another day of a record spike in new Covid-19 cases
- 96,551 new cases reported in the last 24 hours.
- Total confirmed cases now at 45,62,414
- Active cases at 9,43,480
- Patients cured / discharged / migrated at 35,42,663
- Death toll rises to 76,271
- 1,209 deaths reported in the last 24 hours
- 70,880 patients recovered in the last 24 hours
Earnings Reaction: Hindustan Copper Q1FY21
The company reported a 42% year-on-year growth in its revenue for the quarter ended June at Rs 431.4 crore.
Net profit rose nearly 40% to Rs 29.8 crore as compared to the previous year. Inventory gains contributed to the boost in net profit.
Operational performance was subdued. Ebitda fell 7.4% while margins stood at 20% as compared to 30.7% in the previous year.
Margins of the company were impacted due to higher expenses and finance costs.
The company said in a statement that its proposed fund raising plans were postponed due to paucity of time.
Shares gained as much as 8.5% - the biggest single-day gain in two months to Rs 38.3. The stock is up for the second straight day.
Large Trade Alert: Max Healthcare
4.66 crore shares of the company exchanged hands in a single large trade on the Bombay Stock Exchange.
The deal took place during the pre-market block window.
The number of shares exchanged amounts to 5.2% of the total equity of the company.
Buyers and sellers in the trade remain unknown as per data from Bloomberg.
Shares rose as much as 18.6% to Rs 132.55, post the deal. The stock is up for the third straight day.
Opening Bell: A Subdued Start
Indian equity markets opened flat after seeing their biggest single-day gain in over a month on Thursday.
The S&P BSE Sensex opened little changed at 38,865 while the NSE Nifty 50 index was unchanged at 11,447.
Most sectoral indices too have opened flat. The I.T. and Media index has opened 0.2% lower while the Metal index is up 0.3% at the start of trade.
Broader markets have opened flat as well. The Midcap index has opened 0.1% higher while the smallcap index has gained 0.45% in the early minutes.
925 stocks on the NSE have opened with gains while 482 are declining.
Trading Ideas For The Day
- Nifty: Sell 11,600 Call of the September 17 expiry in the range of Rs 43-45. Target of Rs 29-20 and stop loss of Rs 59
- Nifty Bank: Sell in the range of 22,500-22,600 for target of 22,300-22,200 and stop loss of 22,700.
- Buy Grasim September Futures at Rs 713-715 for target of Rs 724-739 and stop loss of Rs 704
- Sell Tata Steel September futures at Rs 407-408 for target of Rs 402-394 and stop loss of Rs 412.8
- Sell Bajaj Auto September futures at Rs 2,930-2,940 for target of Rs 2,720 and stop loss of Rs 3,060
- Grasim and Tata Steel are intraday recommendations while Bajaj Auto is a weekly recommendation.
Source: ICICI Securities
How Did The Fund Flows Fare On Thursday
Key Stocks In Focus
- Reliance Industries: Says it does not comment on media speculation and cannot confirm or deny any transaction which may or may not be in the works. It also said that it evaluates various opportunities on an ongoing basis. Bloomberg reported on Thursday that it is mulling a $20 billion stake sale in Reliance Retail to Amazon.
- National Fertilisers: Total fertiliser sale at 23.81 lakh MT between April-August 2020, a growth of 16% compared to the same period last year. Production up 13% to 16.11 lakh MT between April-August.
- Info Edge: Zomato closes primary fund raising of $100 million from Tiger Global and $60 million from Temasek holding. The food-delivery startup is now d on a post-money valuation of $3.3 billion. The company holds 22.2% stake in Zomato.
- Hexaware Tech: Promoter HT Global I.T. solutions released a pledge of 18.63 crore shares or 62.08% stake which was pledged to Deutsche Bank and six other lenders. The pledge was released on September 8 after redemption of bonds.
- Amber Enterprises: Board approves closure of QIP. The company will issue 22.47 lakh shares to eligible qualified buyers at Rs 1,780 per share which is a 1% discount to the floor price. The company has raised Rs 400 crore through the same.
- ITI: The Army Static Switched Communication Network or ASCON has given its approval to ITI for a project for which it was declared the lowest bidder in 2017. The project is d at Rs 7,796 crore.
- Hindustan Copper: Board defers plans to consider raising of funds
- Route Mobile: IPO subscribed 4.21 times on the second day of bidding. Institutional subscription at 1.27 times, non-institutional investor subscription at 2.07 times and retail subscription at 6.81 times. Institutional category doesn’t include anchor portion.
- Non-Nifty Earnings Today: BHEL, IRCTC, MIDHANI, Rail Vikas Nigam, Puravankara, Adani Green Energy, Future Supply Chain, Premier Explosives, OMDC.
To know more about earnings reported after market hours, key brokerages update and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Consolidation After Surge?
Good morning!
Indian equity markets ended the weekly options expiry session on a strong note, led by Reliance Industries Ltd. that contributed more than 66% of the total gains in the Nifty 50.
Both Sensex and the Nifty saw their biggest single-day gain in over a month. Futures, however, are indicating some resistance at higher levels. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.4% at 11,417 as of 7:45 a.m. on Friday.
So far this week, the benchmarks have gained 1%.
Hindustan Aeronautics Ltd., Hindustan Copper, Jay Bharat Maruti and J&K Bank may react to their quarterly earnings reported late Thursday. BHEL, IRCTC, Mishra Dhatu Nigam or Midhani, Rail Vikas Nigam, Adani Green Energy and Future Supply Chain Solutions are set to announce their results today.
Asian markets are poised to decline for the second straight week. Benchmarks in Japan have reversed losses to trade with modest gain, while the rest continue to decline.
Futures on the Dow Jones are trading 165 points higher. The index ended 1.6% lower on Thursday. The Nasdaq fell over 2% after selloff resumed in mega-cap technology shares.
West Texas Intermediate crude fell 0.2% to $37.22 per barrel, while gold trades at $1,945/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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