All You Need To Know Going Into Trade On Sept. 03
Asian stocks opened the week mixed. Stocks slipped in Japan and South Korea at the open, while Australian shares edged higher.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent higher at 11,755.50 as of 7:30 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- U.S. stocks closed mixed in thin trading as the Trump administration and Canada were said to plan on resuming trade talks next week after discussions Friday ended with no deal.
- The yield on 10-year Treasuries rose one basis point to 2.86 percent.
Europe Market Check
- European shares fell on Friday, taking August’s decline to the largest since February, as risks from emerging markets to Italy and trade converged.
- The MSCI Asia Pacific Index fell 0.4 percent.
- Topix index declined 0.4 percent.
- Kospi index fell 0.3 percent.
- Australia’s S&P/ASX 200 Index rose 0.1 percent.
- West Texas Intermediate crude rose 0.2 percent to $69.93 a barrel.
- Gold fell 0.2 percent to $1,199.09 an ounce.
- Steel snapped two-day losing streak; up 0.2 percent
- Aluminium traded lower for second day; down 0.3 percent
- Zinc traded higher for third day; up 0.4 percent
- Copper traded lower for third day; down 1 percent
- Rubber traded lower for second day; down 2.4 percent
Here are the key events to watch out for this week:
- The China factory PMI from Caixin may have edged down as U.S. tariffs took effect. The measure, due Monday, is more focused on smaller, export-oriented firms than the official index, which unexpectedly increased last month.
- Bank of England governor Mark Carney testifies on the August inflation report and policy decision.
- Executives from Facebook, Twitter and Google testify on social media, Russia meddling.
- U.S. employment report for August is due Friday.
Stocks To Watch
- The U.S. FDA completed auditing Sun Pharma's Halol plant with no observations, two people familiar with the matter to BloombergQuint. The regulator had started inspecting the facility on Aug. 27. Sun Pharma declined to comment on the queries.
- Larsen & Toubro proposed to sell 59 lakh shares, which is 3.41 percent of the paid-up equity capital of L&T Infotech Ltd. through the stock exchange mechanism. The offer for sale’s floor price is set at Rs 1,700 per share. There is an oversubscription option of selling an additional 46.3 lakh shares. This floor price is currently at a discount of Rs 96.15, as compared to the closing price of Rs 1796.15 of the L&T unit.
- Godrej Consumer Products Ltd., through its subsidiary, has divested its entire stake in its United Kingdom arm. The company received 34 million pounds from the U.S.-based private equity firm JZ International. Godrej U.K. was the first international acquisition of the group in 2005. The management said that this move was made because sharpening the strategic focus to emerging markets.
- Idea Cellular Ltd. changes its name to ‘Vodafone Idea limited’ with effect from Aug. 31. The company’s new 437.51 crore shares (post the merger) will be permitted to trade on the exchanges from Sept. 3. These shares are issued to Vodafone Group companies.
- Ramky Infrastructure to sell 100 percent of its stakeholding in NAM Expressway Ltd. to Singapore based Cube Highways Pvt. Ltd. for Rs 140 crore, along with all its liabilities. Consequent to the sale, the consolidated debt of the company will be reduced by about Rs 1,529 crore.
- HCL Technologies partners with ScienceLogic to bring artificial intelligence operations to its customers. The company will use ScienceLogic’s automation engine along with its machine learning powered software DRYiCE.
- LT Foods board approved the investment of Rs 140 crore by India Agri Business Fund II in its wholly owned subsidiary Nature Bio Foods Ltd.
- Vedanta Ltd said that KK Kaura has resigned from the post of the interim chief executive officer, with effect from Aug. 30. Vedanta PLC appointed Srinivasan Venkatakrishnan as its chief executive officer and executive directors. His appointment is effective from Aug. 31, according to Bloomberg report.
- Punjab National Bank is looking to sell its entire holding of 0.11 percent in the National Stock Exchange and is expecting to raise over Rs 48 crore by divesting the stake, according to ET Now report. Bank's subsidiary PNB Investment Services Limited has invited bids from merchant bankers on behalf of PNB to arrange for investors, the report said, adding that the floor price is set for Rs 879 per share for the sale of 5.5 lakh shares of the National Stock Exchange.
- Trigyn Technologies said that the Indian Income Tax Authorities had carried out a search under the section 132 of Income Tax Act, 1961 at the premises of the Company from August 29-30. The company further said that it continues to co-operate with the authorities and will continue to operate its business normally.
- Wipro Ltd. bagged a deal which was valued at over $1.5 billion from Alight Solutions LLC. This is the company’s biggest deal so far.
- Real estate stocks will be in focus as the Supreme Court of India, in an interim order, banned all construction activity till Oct. 9 in Maharashtra, Madhya Pradesh, Uttarakhand and Chandigarh after they failed to comply with its order to come up with a policy on solid waste management.
- State Bank of India hikes benchmark lending rate by 0.2 percent across all tenors up to three years. The MCLR for a one-year tenor increased to 8.45 percent from 8.25 percent earlier. The rate hike by bank comes a month after the RBI hiked repo rate by 25 basis points to 6.5 percent.
- Graphite India's wholly owned subsidiary in Netherlands signed an investment agreement for acquisition of upto 46 percent stake in General Graphene Corporation, an unlisted US company involved in development of Graphene for commercial applications. They will invest upto $18.6 million in multiple tranches in cash.
- MOIL revises prices of different grades of Manganese Ore and other products, effective Sept 1. The prices of ferro grade, have been increased by about 5 percent on the existing prices. Prices of SMGR (Mn30 percent & Mn25 percent), chemical grade and fines remains same. However, a discount at 10 percent will be offered on the prices effective from Sept. 1, on specific grade of material. On the sales of BGF534, existing discount of 5 percent has been increased to 10 percent.
- V-Mart opens three new fashion stores, one in the state of Bihar and other two in the state of Assam. This takes the total number of stores to 184.
- Hindustan Construction Company’s board to meet on Sept. 05 to consider fund raising by the issue of equity shares or other securities.
- Hero MotoCorp to launch two new 125 cc scooters during the upcoming festive season. Expects to maintain healthy double‐digit growth in coming months.
- Indraprastha Gas hiked CNG prices for New Delhi and neighbouring suburbs by 63 to 70 paise per kg to offset impact of Indian rupee weakness on its input costs. It also hiked PNG prices by Rs 1.11 to 1.26 per standard cubic meter. The price change was post.
- Indian Oil raised prices of subsidised LPG cylinder.
August Auto Sales Highlights (YoY)
- Maruti Suzuki sales declined 3.4 percent to 1.58 lakh units.
- M&M sales rose 14 percent to 48,324 units.
- Ashok Leyland sales rose 27 percent 27 percent to 17,386 units.
- Escorts sales rose 4.9 percent to 4,812 units.
- Tata Motors's domestic sales rose 27 percent to 58,262 units.
- Hero MotoCorp sales rose 0.9 percent to 6.85 lakh units.
- Eicher Motors' Royal enfield sales rose 2 percent to 69,377 units.
- TVS Motor sales rose 8 percent to 3.43 lakh units.
- SML Isuzu sales rose 37.5 percent at 744 units.
- Atul Auto sales rose 10.12 percent at 4,430 units.
Data To Watch
- 10:30 a.m.: Nikkei India Manufacturing PMI for August.
- M&M to report farm equipment sales for August.
- Bajaj Auto to report sales data for August.
- Cerebra Integrated Technologies: Societe Generale acquired 10,000 shares or 0.83 percent equity at Rs 41.5 per share.
- Ishares India Index Mauritius Company acquired 57,000 shares or 0.51 percent equity at Rs 34,417.58 per share.
- Integrated Core Strategies (Asia) Pte.Ltd. sold 95,200 shares or 0.85 percent equity at Rs 34,422.8 per share.
- DB International Asia Limited acquired 68,300 shares or 0.65 percent equity at Rs 38.52 per share.
- Integrated Core Strategies (Asia) Pte. Ltd. acquired 63,900 shares or 0.6 percent equity at Rs 39 per share.
Who’s Meeting Whom
- Tata Power to meet HDFC MF, IIFL and other investors from Sept. 3-5
- Cipla to meet Abu Dhabi Investment Authority, Citi and other investors from Sept. 3-21
- TCS to meet Wellington International Management on Sept. 6.
- Panama Petrochem promoter group acquired 44,100 shares from Aug. 29-30.
- Liberty Shoes promoter group sold 24,000 shares from Aug. 28-30
- Camlin Fine Sciences promoter and director Ashish Dandekar acquired 1.2 lakh shares from Aug. 30-31.
- Cigniti Technologies promoter group sold 22,400 shares on Aug. 30.
- Manpasand Beverages promoter and director Dhirendra Singh acquired 10,000 shares on Aug. 29.
- TeamLease Services promoter sold 10,000 shares on Aug. 30.
- Borosil Glass Works Ltd placed under ASM framework.
- Jaiprakash Power Ventures Ltd circuit filter revised to 10 percent.
- L&T Infotech’s two day offer for sale starts today.
- Infosys last trading day before going ex bonus.
Money Market Update
- Rupee hits record closing low for third day, falls 26 paise to 71 a U.S. dollar. The home unit depreciated 3.6 percent last month, its biggest fall in three years.
- Sovereign bonds saw biggest fall in four months; yields up 18 basis points last month.
- Nifty September Futures closed trading at 11,735.3 premium of 54.8 points versus 56 points.
- September series-Nifty OI up 6.5 percent and Bank Nifty OI down 3 percent.
- India VIX ended at 12.59, up 1.5 percent.
- Max OI for September series at 11,800 Call, OI at 27.4 lakh, OI up 22 percent.
- Max OI for Sep series at 11,600 Put OI at 32.4 lakh, OI up 28 percent
- Nifty PCR at 1.55 versus 1.57
- Nifty Bank PCR at 0.98 versus 1.00
BofAML on Wipro
- Maintained ‘Neutral’; raised price target to Rs 300 from Rs 290, implying a potential downside of 0.5 percent form the last regular trade.
- Order bookings have seen an uptick in past two quarters.
- Visibility on healthcare and manufacturing still low for the next six months.
- An improving margin trajectory is likely for rest of the current financial year.
Kotak on United Breweries
- Maintained ‘Sell’ with a price target of Rs 1,100, implying a potential downside of 21.5 percent from the last regular trade.
- The previous financial year was a 180-degree swing from year-beginning to year-end.
- Return ratios improved but cash flow generation remains subdued.
- Like long-term growth potential in beer, but stock is too expensive.
Nomura on Coal India
- Maintained ‘Buy’ with a price target of Rs 320, implying a potential upside of 11.8 percent from the last regular trade.
- Tepid production/offtake growth in August.
- Power plants in India had 10 days of coal inventory as of Aug. 30
- Required run-rate to meet the current financial year’s production/offtake target is 1.7/1.8 MT per day which seem achievable.
Brokerages On Piramal Enterprises
- Maintained ‘Buy’ with a price target of Rs 3,685, implying a potential upside of 15 percent from the last regular trade.
- Builds up a head of steam in financial services.
- Focus more on profitability than growth.
- Well poised to capture growth opportunities that exist in the wholesale lending space.
- Maintained ‘Neutral’ with a price target of Rs 3,065, implying a potential downside of 4 percent from the last regular trade.
- Expect street to welcome the additional color on financial service business.
- Expect RoE to improve as business appears robust.
- Valuations look fair; See few near-term catalysts.