All You Need To Know Going Into Trade On April 13
A man walks near the Municipal Corporation Building, left, and the Chhatrapati Shivaji Maharaj Terminus (CSMT) during a lockdown imposed due to the coronavirus in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On April 13

Asian equity markets began the new trading week on a negative note as investors brace for the onset of the corporate earnings season and the uncertainty surrounding the Covid-19 impact on the same.

Oil prices have risen after OPEC+ agreed to cut 9.7 million barrels per day from the global crude output which is a shade below the initial plan of 10 million barrels per day.

The dollar has declined along with the Aussie while the Yen has risen. The Euro steadied after France, Germany, Spain and Italy reported a slowdown in new Coronavirus cases.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 1.4 percent to 9,033 as of 7:10 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

Here is a look at all that can influence equities in today’s session:

  • Markets in Japan and South Korea are retreating in early trade as are futures in the United States. Markets in Hong Kong are shut on account of the Easter Holiday.
  • Minneapolis Fed President Neel Kashkari said that the U.S. economy could face 18 months of rolling shutdowns as the Covid-19 outbreak recedes and flares up again without an effective therapy or a vaccine.
  • U.S. retail sales in March are poised to fall the most on record. The data will be reported on Wednesday.
  • China will release GDP, industrial production, retail sales and jobless figures on Friday.
  • Yield on the 10-year treasury is little changed at 0.72 percent.
  • West Texas Intermediate Crude trades 3.6 percent higher at $23.58 after historic output cut deal.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On April 13

Stocks To Watch

  • Dr. Reddy’s Laboratories: Gets Establishment Inspection Report (EIR) from the U.S. FDA for its API manufacturing facility in Telangana indicating closure of the audit. The inspection classification of this facility is determined as Voluntary Action Indicated (VAI).
  • HDFC: People's Bank of China hikes stake in the company to more than 1 percent as per the company's March quarter shareholding pattern.
  • Zee Entertainment Enterprises: Board to invest a sum of Rs 522 crore in SugarBox over a period of time and will provide operational support including providing performance and corporate guarantees as appropriate and necessary. The company has also authorized SugarBox to finalize the terms of a 10-year contract with RailTel Corporation of India. Company had acquired 80 percent stake in SugarBox in 2017.
  • Godrej Consumer: The company in its March quarter update has stated that it will report a revenue decline in the high teens during the quarter. The international business is likely to see a mid-single digit sales decline in rupee terms. Distributors will see a low double-digit decline in sales, indicating a fall in stock at the dealership level. The later part of March has seen significant issues with manufacturing, transportation and distribution of essential items, according to its press statement. The company expects the situation to improve in the coming days.
  • IDFC First Bank: The private lender's CASA deposits grew 28 percent sequentially, while retail assets rose 32.4 percent year-on-year, according to its March quarter update. On the other hand, wholesale funded assets fell 29 percent to Rs 40,415 crore compared to last year.
  • Kotak Mahindra Bank: Top leadership team takes 15 percent salary cut for fiscal year 2021. Uday Kotak has opted to forgo his salary and will receive Re. 1.
  • ITI: Defence Research and Development Organisation and the company are likely to ink a deal soon to produce portable ventilators.
  • Piramal Enterprises: Board accepted the resignation of Arundhati Bhattacharya as an Independent Director with effect from April 16. She has indicated that the reason for her resignation is her decision to accept a full time role as Chairperson and CEO in another company and accordingly she needs to discontinue her existing non-executive assignments.
  • Havells: During the fiscal year 2020, 1.36 crore shares of the company were settled by promoter entity ARG Family Trust. Settlement of shares of promoter group QRG Investments, which is an NBFC has also been completed upon RBI approval, in compliance of SEBI order.
  • Gujarat State Fertilizers & Chemicals: Various plants are expected to start production between April 13-30. Methanol plant is expected to start the first week of June.
  • SRF: Few plants belonging to the essential goods value chain in the Dahej Chemicals Complex have resumed operations, in-line with permissions from local authorities.
  • India Grid Trust: Board approved the acquisition of Gurgaon Palwal Transmission from Sterlite Power for up to Rs 1,080 crore. Assets Under Management of the trust is expected to grow by 9 percent to Rs 13,300 crore. Board also approved amendment of the trust deed to enable the its foray into solar energy.
  • Cadila Healthcare: Zydus gets tentative U.S. FDA approval for Empagliflozin tablets. The medicine is used to improve blood sugar and reduce cardiovascular risk.
  • SMS Lifesciences: The U.S. FDA ban on Ranitidine drugs from the U.S. market and the lockdown due to Covid-19 can impact the revenue of the company.
  • SMS Pharma: Not sold any Ranitidine API for commercial distribution in the U.S. Whatever quantities sold are for drug product development. Commercial supplies of Ranitidine HCI drug substance to the U.S. market is delayed by 9-10 months and may start by the end of Calender year 2020.
  • Camlin Fine Sciences: Resumes trial production at its manufacturing unit in Dahej.
  • National Fertilizers: ICRA downgraded long-term cash credit limits and term loans worth Rs 6,167.75 crore to AA- from AA. Outlook is revised to stable from negative. The rating downgrade factors in the weakening cost competitiveness of the company in urea operations, arising from a sharp rise in energy consumption levels in the current fiscal, which was brought about by unscheduled plant outages.
  • VST Tillers Tractors: Power Tillers sales in March down 59 percent to 1,585 units while Tractors sales fall 61 percent to 390 units.
  • AU Small Finance Bank: RBI has approved appointment of Raj Vikash Verma as part-time chairman with effect from April 8. RBI has also approved re-appointment of Sanjay Agarwal as MD and CEO for period of three years with effect from April 19.
  • Gujarat Fluorochemicals: Plants at Ranjitnagar and Dahej resumed operations on April 8 after necessary permissions from Government authorities.
  • Jubilant Lifesciences: Company's bank loan facilities are placed under rating watch by CRISIL. Rating on the company's commercial programme is reaffirmed as A1+.

Brokerage Radar

UBS On Kotak Mahindra Bank

  • Downgrade to sell from neutral
  • Price target cut to Rs 1,050 from Rs 1,500
  • Risk-reward negative post recent price performance
  • Asset quality not immune to broad slowdown
  • Cut loan growth and raise credit cost estimates for FY21/22

Morgan Stanley On Amara Raja

  • Overweight rating maintained
  • Price target cut to Rs 779 from Rs 855
  • Covid-19 will lead to demand slowdown on OEM and industrial side
  • Replacement demand to support earnings
  • Expect margins to be stable given the duopoly nature of the industry

Morgan Stanley On IDFC First Bank

  • Underweight rating maintained
  • Price target of Rs 15
  • Good progress on realisation in Q4
  • Fairly strong growth in retail loans and CASA deposits
  • Wholesale loans and deposits continued to contract
  • Could have been some loss of government deposits but no data for the same

Kotak Securities On Maruti Suzuki

  • Sell rating maintained
  • Price target cut to Rs 4,900 from Rs 5,800
  • Volume trajectory to remain weak for the PV segment in FY21
  • Cut FY21/22 EPS estimates by 11-15 percent due to cut in volume and EBITDA margin assumptions
  • Maintain sell rating on expensive valuations

HSBC On Titan

  • Buy rating maintained
  • Price target raised to Rs 1,200 from Rs 1,180
  • Some positive readings from Q4 update
  • Jewellery revenue grew 16.5 percent in January-February which is above expectations
  • Managing the disruption well
  • Competitive position should significantly improve post Covid-19

HSBC On Asian Paints

  • Buy rating maintained
  • Price target cut to Rs 1,900 from Rs 2,000
  • Paints demand is deferred, not impaired
  • Pent-up demand to return as situation normalises
  • Should manage the disruption with minimal risk due to strong balance sheet
  • Will be much stronger post Covid-19
  • Transition from unorganised to organised players will accelerate

Maybank On Indian Media

  • Analysts suggests ad spend most influenced by GDP, Nifty, Income levels
  • Digital and TV to gain from Print, Radio and others
  • Advertisers have suspended ads for H1FY21 and will lower it in H2
  • Print companies highly sensitive to ads as they form 70-75 percent of the revenue

Bulk Deals

  • Mangalam Cement: India Capital Fund sold 8.32 lakh shares (3.12 percent) at Rs 150.03 per share.
  • MCX: Club Millionaire Financial Service PMS sold 3.34 lakh shares (0.66 percent) at Rs 999.35 per share.
  • Sequent Scientific: Infinity Holdings acquired 1 crore shares (4.03 percent) at Rs 78.01 per share while TIMF Holdings sold 75 lakh shares (3.02 percent) and CVR Enterprises sold 25.19 lakh shares (1.01 percent) at Rs 78 per share, respectively.

Pledged Share Details

  • Embassy Office Parks REIT: Sponsor Embassy Property Developments released pledge of 1 crore units on April 7 in favour of Kotak Mahindra Investments.
  • Jindal Steel & Power: Promoters revoked pledge of 8.6 crore shares between April 1-8.

(As Reported On April 9)

Trading Tweaks

  • Price Band Revised To 5 Percent From 10 Percent: Karur Vysya Bank, Sharda Cropchem
  • Price Band Revised To 10 Percent From 20 Percent: GVK Power, Sicagen India, Alembic
  • Move Into Short-Term ASM Framework: PI Industries, RPG Life, Solara Active, IIFL Securities, Aarti Drugs, SMS Pharma, GVK Power, Dhanuka Agritech
  • Moves Out Of Short-Term ASM Framework: Indian Terrain Fashions.

Money Market Update

  • The rupee ended stronger at 76.27 against the U.S. dollar on Thursday as against Wednesday’s close of 76.34.

F&O Cues

  • Nifty April futures closed at 9,086.7, a discount of 25 points as against a premium of 1.8 points on Wednesday
  • Nifty April futures add 8 percent in Open Interest and 7.1 lakh shares
  • Nifty Bank April futures closed at 19,768.3, a discount of 145 points as against a discount of 57 points on Wednesday
  • Nifty Bank April futures add 15 percent in open interest and 1.4 lakh shares
  • Nifty Put-Call Ratio at 1.48 Versus 1.3 across all series

Nifty: April 16 Expiry

  • Maximum Open Interest on Call side at 9,500 strike (8.5 lakh shares)
  • Maximum Open Interest on Put side at 8,000 strike (10.8 lakh shares)
  • 8,500 Put (6.5 lakh shares), 8,000 Put (6 lakh shares) and 9,000 Put (4.5 lakh shares) see Open Interest addition.

Nifty: April 30 Expiry

  • Maximum Open Interest on Call side at 10,000 strike (15.1 lakh shares)
  • Maximum Open Interest on Put side at 8,000 strike (25.5 lakh shares)
All You Need To Know Going Into Trade On April 13
BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.