KEY HIGHLIGHTS
Closing Bell: In-Line With The Global Sell-Off
Indian equity markets posted their first weekly loss in three, after witnessing a sell-off in-line with that witnessed in global equities.
The S&P BSE Sensex ended 1.6% lower at 38,357 while the NSE Nifty 50 index ended below the mark of 11,333, down 1.7%. Maruti Suzuki India was the only stock out of the 50 Nifty constituents that ended with gains in today's session.
Banks were the major laggards in today's session. The Nifty Bank ended 2.1% lower in today's session, declining more than 450 points. The index ended 6% lower for the week, after having gained 10% in the week ending August 28. The PSU Bank index too declined 9% during the week.
Metals were the top laggards in today's session, with the index declining nearly 3% while Nifty Realty and Nifty Pharma fell over 2% each.
The FMCG and I.T. index ended 1% lower while Media and Auto, which were the only two sectoral gainers through the session, gave up gains to end lower as well.
Broader markets saw losses that were in-line with benchmarks. The midcap index ended 1.5% lower while the smallcap index declined 1%.
The India Volatility Index ended 7.1% higher at 21.95.
Market breadth remained in favour of the laggards. 570 stocks on the NSE ended with gains while 1,247 stocks posted losses.
Decoding The Market Performance This Week
Market Experts On Today's Correction
Markets have been rallying sharply over last 2-3 months and today’s decline seems like a minor blip. Bull market story remains intact. Don’t see sharper reversals, but U.S. elections outcome might set the stage for volatility.Vikas Khemani, Founder, Carnelian Asset Management
For Emerging Markets like India, liquidity flows will be more important going ahead. In the near-term, the markets may correct to levels of 11,200. But investors who have a long-term time frame can buy these dips to accumulate quality stocks as stock selective opportunities still look attractive.Avinash Gorakshakar, Director - Research, Profitmart Securities
Stock Reaction: NBCC
The company informed the exchanges that it has secured a total business of Rs 150 crore in the month of August.
Shares currently trade 3.2% lower at Rs 27.3 and have snapped a two-day gaining streak, post the announcement.
Stock Reaction: Rushil Decor
The company has informed the exchanges that the Board of Directors have approved terms of the rights issue in order to raise funds.
The company will issue 49.77 lakh shares of face of Rs 10 each, for a total of Rs 24.89 crore.
The rights issue price has been set at Rs 50 per share, which is a 55% discount to Thursday's closing price of Rs 112.
The rights entitlement ratio has been set at one share for every three existing shares held by eligible shareholders as on the record date.
The rights issue will open on September 21 and close on October 5, 2020.
Shares gave up gains to fall as much as 3.6% to Rs 108, post the announcement.
Metal Index Top Sectoral Laggard
Buzzing Stock: Granules India
- Among the top gainers on the Nifty Smallcap index
- Trades at an all-time high
- Gains as much as 7.7% to Rs 350.3
- Has gained in four out of the last five trading sessions
- Up 10% during the course of this week
- Today's volumes are double its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 72
- Has nearly quadrupled from its 52-week low of Rs 90 on September 4, 2019
- 11 out of the 12 analysts tracking the stock have a buy recommendation
- The stock trades 8% higher than its 12-month consensus price target of Rs 316.39, implying a negative return potential
Active Stock Options
- Maruti's 7,500 Call: Premium up 98% to Rs 149.25. The contract has added 292 shares in Open Interest.
- TCS' 2,300 Call: Premium up 2.8% to Rs 68.5. The contract has shed 309 shares in Open Interest.
- ICICI Bank's 400 Call: Premium down 27% to Rs 8.1. The contract has added 615 shares in Open Interest.
Stock Reaction: Ahluwalia Contracts
The company informed the exchanges that it has secured a new order worth Rs 99.5 crore.
The order pertains to the construction of new civil and structural works for the headquarters of Bandhan Bank at Kolkata, the company said in an exchange filing.
The statement also said that with this order, the total order inflow in FY21 so far now stands at Rs 389.5 crore.
Shares gained as much as 4.7% to Rs 265.1, post the announcement. The stock has gained only twice in the last seven trading sessions.
Markets At 2:10 P.M.
- Benchmark indices set to post losses for the week
- Nifty down 1.1% at 11,402
- Sensex down 1.1% at 38,564
- Nifty Bank off day's low, down 1.5% at 23,186
- Nifty Midcap index down 0.9%
- Nifty Smallcap index down 0.4%
- India Volatility Index up 4.3% at 21.38
- Nifty Media and Nifty Auto remain the top sectoral gainers; up 0.7% each
- Nifty Metal is the top sectoral laggard; down 1.7%
- Nifty PSU Bank and Nifty Realty decline 1.5%
- Nifty FMCG and Nifty I.T. down nearly 1% each
- Bharti Infratel remains the top Nifty gainer; up 3.2%
- JSW Steel is the top Nifty laggard; down 2.7%
Money Market Update
The currency rebounded to snap a two-day losing streak, ending with gains for the day as well as the week.
The rupee ended at 73.14 against the U.S. Dollar as compared to Thursday's closing of 73.47.
It was a volatile session for the currency, which made an intra-day low of 73.47 and an intra-day high of 73.01.
For the day, the rupee was the best performing currency in Asia. For the week, it was the second best performer in the region, ending marginally lower than the Chinese Renminbi.
Yield on the 10-year government bond fell to 5.931% as compared to Thursday's close of 5.898%.
Buzzing Stock: Aditya Birla Capital
- Top gainer on the BSE Midcap index
- Gains as much as 8.6% to Rs 77.4
- Trades at the highest level in six months
- Up for the fourth straight day
- Has gained 22% in the last four trading sessions
- Today's volumes are 12 times higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 76
- Breaks out above its 200-Day Moving Average of 71.1
- Has doubled from its 52-week low of Rs 37 on March 24, 2020
- All seven analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 8.9%
ITC Chairman Sanjiv Puri At The Company's AGM
Shares fell as much as 2.4% to Rs 187. The stock trades at the lowest in over two months.
RBI Revises Priority-Sector Lending Guidelines
The Reserve Bank of India revised guidelines for priority sector lending, saying that the revised rules will enable better penetration to credit deficient areas.
Among the many revisions, one such revision was the doubling of loan limits for companies in the renewable energy space.
Loan limits for renewable energy have been increased to Rs 30 crore from the earlier Rs 15 crore, the RBI statement said. Listed companies within this space include Inox Wind and Sterling & Wilson Solar.
Shares of Inox Wind are off the day's high after gaining as much as 8.8% to Rs 52. The stock however is at a 52-week high and is up for the fourth straight day.
Shares of Sterling & Wilson Solar too are up for the fourth straight day, gaining as much as 11% to Rs 285.5.
Stock Reaction: Equitas Holdings
The company has shared a business update for the month of August for its subsidiary Equitas Small Finance Bank:
- Collection efficiency for Micro Finance business at 77%, Small business loans at 105% and vehicle finance at 72% in the month of August.
- Overall loans under moratorium down to 35% in August from 43% in July and 51% in June.
- Micro Finance loans under moratorium at 25% in August from 42% in July and 59% in June.
- Small business loans under moratorium at 37% in August from 40% in July and 42% in June.
- New CV Finance loans under moratorium at 47% in August from 54% in July and 65% in June.
- Used CV Finance loans under moratorium at 55% in August from 60% in July and 70% in June.
Shares are off the day's low after falling as much as 4.3% to Rs 51. The stock currently trades 0.6% lower and is down for the fifth straight day.
European Stocks Open Lower
Benchmark indices in Europe have opened lower and extended declines for the week, in-line with global peers.
The Stoxx 600 has opened 0.8% lower with all sectors opening lower other than banks.
Asian markets have ended over 1% lower while futures on the Dow Jones are trading lower by 150 points.
Brent crude trades 1% lower at 1% lower at $43.64 while Gold is up 0.3% at 1,935.95/Oz.
Let's take a look at how benchmark indices have opened across Europe:
- Euro Stoxx 50 down 0.95% at 3,272
- DAX down 1.4% at 13,057
- CAC down 1.1% at 4,953
- FTSE 100 down 0.9% at 5,798
- IBEX 35 down 0.2% at 6,994
How Are The Sectoral Indices Faring
Buzzing Stock: Astrazeneca Pharma India
- Trades at an all-time high
- Gains as much as 5.2% to Rs 3,902
- Biggest single-day gain in two months
- Up for the fourth straight day
- Has gained in nine out of the last 10 trading sessions
- Up 16% in the last 10 trading sessions
- Today's volumes are quadruple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 79
- Has more than doubled from its 52-week low of Rs 1,812 on September 4, 2019
F&O Snapshot: Active Options Contracts
- Nifty September futures add 13,607 shares and 9.5% in Open Interest.
- Nifty Bank September futures add 9,050 shares and 15.3% in Open Interest.
Nifty: September 10 Expiry
- 11,500 Call: Premium down 51.2% to Rs 63.1. The contract has added 25,960 shares in Open Interest.
- 11,400 Call: Premium down 44% to Rs 110. The contract has added 22,013 shares in Open Interest.
- 11,300 Put: Premium up 92.3% to Rs 74.8. The contract has added 15,715 shares in Open Interest.
Nifty Bank: September 10 Expiry
- 22,500 Put: Premium up 51.6% to Rs 198.6. The contract has added 17,996 shares in Open Interest.
- 23,500 Call: Premium down 47.7% to Rs 251.4. The contract has added 16,032 shares in Open Interest.
- 23,000 Put: Premium up 45% to Rs 364.7. The contract has added 12,108 shares in Open Interest.
Auto Index Recovers From The Day's Low
Markets At Noon
- Benchmark indices remain lower and are likely to post losses for the week
- Nifty down 1.1% at 11,397
- Sensex down 1.2% at 38,520
- Nifty Bank down 1.9% at 23,081
- Nifty Midcap index down 0.7%
- Nifty Smallcap index down 0.5%
- India Volatility Index up 5.4% to 21.6
- Nifty Media and Nifty Auto are the only sectoral gainers; up 1.2% and 0.7% respectively
- PSU Bank index remains the top sectoral laggard; down 2%
- Nifty Metal, Nifty FMCG and Nifty I.T. down 1% each
- Bharti Infratel remains the top Nifty gainer; up 3%
- Wipro is the top Nifty laggard; down 2.2%
- 1,149 stocks on the NSE trade with losses while 582 decline
Route Mobile IPO
Route Mobile - a cloud-communication platform provider plans to sell as much as Rs 240 crore worth of new shares in its IPO, Bloomberg News reports citing an advertisement in a business newspaper.
The company intends to raise Rs 600 crore at the upper end of the price band in the IPO that opens on September 9 and will close on September 11.
The price band for the same has been set at Rs 345-350 per share.
ICICI Securities, Axis Captial, Edelweiss Financial and IDBI Capital are managers to the issue.
Buzzing Stock: IFB Industries
- Top gainer on the Nifty 500 index
- Gains as much as 11.7% to Rs 542
- Biggest single-day gain in over four months
- Trades at the highest level in nearly seven months
- Up for the fourth straight day
- Today's volumes are more than double its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 72
- Breaks above 200-Day Moving Average of 473
- Still remains 32% below its 52-week high of Rs 805 on October 31, 2019
- Two out of the three analysts tracking the stock have a buy recommendation
- The stock trades 17.7% higher than its 12-month consensus price target of Rs 431, implying a negative return potential
Stock Reaction: Gujarat State Fertilisers & Chemicals
The company informed the exchanges on Thursday that it has restarted its Methanol plant with an installed capacity of 525 metric tonnes.
The plant was commissioned in early-2013 but commercial production could not take place as it was unviable due to high raw material cost and non-availability of the market.
The plant is expected to operate at full capacity by September 10.
The company said that as a result of the move, the topline will improve by approximately Rs 150 crore in FY21.
Shares fell as much as 3% to Rs 65.5, snapping a two-day gaining streak.
Brokerage Reaction: Vinati Organics
Shares of the specialty chemical company are rising in today's trade after brokerage firm Emkay upgraded the stock to buy from hold.
Emkay's Rationale:
- Launch of new products looks encouraging in the current scenario
- Recovery in IBB volumes and better growth in IB derivatives should help mitigate lower demand for ATBS
- Focus will remain on specialty products where the company maintains a major market share
- Expect 20% sales CAGR in FY20-23
- Raise FY22/23E EPS by 2.7% and 7.7% respectively on new capex plans
Other than upgrading the stock, Emkay has also raised its price target to Rs 1,206 from the previous Rs 1,110.
Shares gained as much as 2.8% to Rs 1,037, snapping a two-day losing streak.
Earnings Reaction: Jubilant Industries Q1FY21
- Revenue down 38% to Rs 94.6 crore
- Net loss of Rs 3.1 crore from net profit of Rs 9.6 crore
- Ebitda down 76.8% to Rs 4.1 crore
- Ebitda margin at 4.3% from 11.6%
- Agri Products revenue up 9.9% to Rs 54.3
- Performance Polymers revenue down 61% to Rs 40.3 crore
- All numbers are consolidated and compared on a year-on-year basis.
Shares fell as much as 7.9% to Rs 145.3, before a small recovery. The stock snapped a two-day gaining streak.
Fifth Day Of Losses For PSU Bank Index
Buzzing Stock: Future Retail
- Worst performer on the Nifty Midcap index
- Locked in a 5% lower circuit at Rs 112.5
- Fourth straight day of lower circuit for the stock
- Was locked in a lower circuit of 10% for three straight days before price band was revised to 5% from 10%
- Longest losing streak for the stock in over a month
- Has declined 30% in the last four trading sessions
- Today's volumes are 86% below its 20-day average
- Given up all the gains it saw over a period of three days starting August 27
- Fallen below its 50-Day Moving Average at 116
- Six out of the seven analysts tracking the stock have a buy recommendation; 0 sell calls
Stock Reaction: Larsen & Toubro
The infrastructure conglomerate has informed the exchanges that it has won a significant contract from the ministry of defence.
The contract involves supply of Pinaka Launchers, Battery Command Posts and associated Engineering Support Packages (ESP) for four regiments, the exchange filing said.
The Pinaka System has been indigeneously developed by the company.
The company has earlier supplied two regiments of Pinaka systems earlier.
Classification as 'significant' means that the order ranges between Rs 1,000 crore - Rs 2,500 crore, as per L&T's terminology.
Shares are off the day's low, after declining as much as 1.7% to Rs 945.
Stock Reaction: Cheviot
The company has informed the exchanges that it will hold a board meeting on September 8 to consider a buyback of equity shares.
Shares gained as much as 6.2% to Rs 698, post the announcement. The stock is up for the fourth straight day and is trading at the highest level in five months.
Stock Reaction: 5Paisa Capital
The company informed the exchanges on Thursday that its board has approved raising funds to the tune of Rs 900 crore through the issuance of equity shares.
The fund raising can also be done through warrants or any other secured or either through a preferential allotment, QIP or any other mode, the company said in an exchange filing.
The company also approved enabling resolutions to raise funds worth Rs 250 crore through Non-Convertible Debentures (NCDs) on a private placement basis.
Shares gained as much as 4.7% to Rs 394.9, post the announcement. The stock is up for the third straight day and is trading at the highest level in a month.
Markets At 10:10 A.M.
- Benchmark indices off opening low
- Nifty down 1.2% at 11,390
- Sensex down 1.3% at 38,496
- Nifty Bank down 1.8% at 23,110
- Nifty Midcap index down 0.9%
- Nifty Smallcap index down 0.8%
- India Volatility Index up 6.2% to 21.78
- Nifty Pharma is bucking the trend; up 0.1%
- All other sectoral indices trade with losses
- Nifty Realty is the top sectoral laggard; down 1.9%
- Nifty I.T., Nifty Metal, Nifty PSU Bank decline over 1.5% each
- Bharti Infratel is the top Nifty gainer; up 4%
- Zee Entertainment is the top Nifty laggard; down 2.2%
- 43 out of the 50 Nifty constituents trade with losses
- 439 stocks on the NSE trade with gains while 1,201 decline
Money Market Update
The rupee opened flat in today’s session, despite the volatility in the equity markets.
The currency opened at 73.40 against the U.S. Dollar as compared to Thursday's close of 73.47. It was the worst performing currency in Asia in yesterday's session.
Yesterday's losses made the currency give up all the gains it made during Tuesday's session and it is now little changed for the week.
Yield on the 10-year government bond opened at 5.896% as compared to Thursday's close of 5.898%.
Stock Reaction: CreditAccess Grameen
The company shared its business update for the month of August, where it said that loans under moratorium are down to 18% in August from 24% in July and 26% in June.
Collection efficiency for the microfinance company improved to 82% in August from 76% in July, the exchange filing said.
Disbursements stood at Rs 484.6 crore in August. However, disbursements were made only to those customers making on-time payments, the company said.
Collection efficiency for the company's acquisition Madura Microfinance stood at 75% in August, up from 64% in July and 54% in June.
Brokerage firm CLSA has initiated coverage on the stock with a buy rating and a price target of Rs 840. CLSA believes that the stock is better placed to capture the microfinance opportunity and that the acquistion of Madura Microfinance will help consolidate the company's leadership position.
CLSA is betting on the company's Unique customer-centric business model, strong HR practices, steady branch expansion and MNC parentage. It expects the company's premium valuations to sustain going forward.
The stock is bucking the trend in today's session, gaining as much as 6.7% to Rs 731. The stock has snapped a three-day losing streak and is trading at the highest level in nearly six months.
Coronavirus India Update
- Another day of over 80,000 cases reported in the last 24 hours
- 83,441 new cases reported in the last 24 hours
- Total confirmed cases now at 39,36,747
- Active cases now at 8,31,124
- Patients cured / discharged / migrated at 30,37,151
- Death toll rises to 68,472
- 1,096 deaths reported in the last 24 hours
- 66,659 patients recovered in the last 24 hours
Only Three Nifty Constituents Advance
Stock Reaction: Banking Stocks
Banking stocks have opened lower in today's session after the Supreme Court on Thursday said that accounts there were not declared as NPAs on August 31 will not be declared so until further orders.
The top court’s interim order came while hearing a batch of petitions from individuals, construction bodies, hotel associations, among others.
The case will now be heard again on September 10.
Finance Minister Nirmala Sitharaman on Thursday urged banks to support borrowers who are in distress once the loan moratorium is lifted.
The lenders have been asked for quick implementation of a sustained resolution plan for revival of every viable business by September 15.
The Nifty Bank fell as much as 1.75% and is trading at the lowest point of the day at 23,119. All constituents of the index trade with losses, led by ICICI Bank, Federal Bank and RBL Bank.
Opening Bell: A Weak Start
Indian equity markets opened lower, in-line with the unraveling of the rally in global equities.
The S&P BSE Sensex opened 1.7% lower at 38,325 while the NSE Nifty 50 index opened 1.5% lower at 11,354. As of closing on Thursday, the Sensex and Nifty were down over 1% on a weekly basis.
Among sectoral indices, the Nifty Bank opened 400 points or 1.7% lower at the start of trade. The index has been an underperformer after seeing gains of 10% last week.
Auto, I.T. and the PSU bank index opened with losses of over 1.6%. The realty index has opened with losses of over 2%.
Broader markets too have opened in-line with the weakness in the benchmarks. The midcap index is down 2% while the smallcap index fell 1.8% in the early minutes of trade.
1,107 stocks on the NSE opened with losses while only 136 managed to open with gains.
Latest On The Coronavirus
- Overall cases cross 26 million globally
- Death toll crosses 8.66 lakh
- New Zealand retains current distancing measures
- Australia's Victoria reports 81 new cases overnight
- Hong Kong's testing drive reports six new cases
- New clusters found in Singapore's worker dorms. The city reported 48 new cases on Wednesday
- 198 new cases reported in South Korea
- 5,937 new cases reported in Mexico along with 513 deaths
- North Dakota and South Dakota continue to see a rise in cases. 360 new cases reported in North Dakota while 334 new ones reported in the South
- Brazil reported 43,773 new cases and crossed the four million mark overall
- Overall cases in the U.S. rise 0.7%
- 5,125 new cases reported in California
How Did The Fund Flows Fare On Thursday
Key Stocks In Focus
- Banking Stocks: Supreme Court has adjourned hearing in the loan moratorium case till September 10. Accounts not declared as NPAs as on August 31 shall not be declared so until further orders. Banks need to roll out resolution schemes for Covid-19 induced stressed accounts by September 15, FM Sitharaman told bankers on September 3.
- Vodafone Idea: Clarified on the news of Verizon, Amazon may invest over $4 billion on the company stating that as a corporate strategy, the company is evaluating opportunities and currently there is no proposal as reported by media that is being considered by the board. The board meeting to discuss raising of funds to be held today.
- Allcargo Logistics: Bloomberg News reports that the company is considering listing its international business on a European exchange, as it weighs its proposal to give up its listing in India. The company may seek a new listing as soon as next year. The company could seek to the business at $800 million to $850 million in an offering.
- The government has imposed an anti-dumping duty on Ciprofloxacin Hydrochloride imports from China for six months. A levy of $0.9-$3.49 per kg has been imposed on the raw material used in making antibiotics. Aarti Drugs, Aurobindo Pharma, Dr Reddy's Laboratories, Neuland Laboratories and Sun Pharma are some of the producers of the antibacterial drug in India.
- Gujarat State Fertilizers and Chemicals: Has restarted its methanol plant with an installed capacity of 525 metric tonnes per day. The plant will be operating at its full capacity from September 10 and is expected to produce 470 metric tonnes of Methanol per day. As a result of this, the company’s top-line is likely to grow by Rs 150 crore in FY21.
- Infosys: To acquire 100% stake in a product design and development firm Kaleidoscope Innovation for $42 million.
- CreditAccess Grameen: Says that loans under moratorium are now down to 18% in August as compared to 24% in July and 26% in June. Overall collections have also seen an improvement with efficiency rising to 82% in August from 76% in July. The board has also approved raising funds to the tune of 1,000 crore rupees through issue of equity shares.
- Cheviot: To consider share buyback on September 8.
- Mindspace Business Parks REIT: To consider raising Rs 500 crore via NCDs on September 14.
To know more about the other stocks in focus, key brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Set For Weekly Losses
Good Morning!
Futures are pointing to a negative start for the equity markets on the final trading day of the week. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 1% to 11,434 as of 8:00 a.m.
So far this week, the S&P BSE Sensex and NSE Nifty 50 have dropped 1%.
The street will keep an eye on Vodafone Idea as it holds its board meeting to discuss a potential fundraise. CreditAccess Grameen and Tata Motors, along with IT stocks, may also react to bullish brokerage commentary.
Asian markets have opened lower this morning, though the losses are modest compared to those seen overnight on Wall Street. Markets in Japan, Australia, South Korea, are all trading with losses.
Futures on the Dow Jones are little changed, while those of the Nasdaq are trading lower by 150 points. The indices on Wall Street fell between 2.5% and 5% overnight.
West Texas Intermediate crude fell 0.6% to $41.12 per barel, while gold rose 0.3% to $1,936.7/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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