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All You Need To Know Going Into Trade On April 29
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
29 Apr 2020, 07:46 AM IST 
A deserted beach and sun chairs in Port Aransas, Texas, U.S. (Photographer: Eddie Seal/Bloomberg)
Asian equity markets are edging higher at the start of trading on Wednesday as U.S. futures turned positive amid a slew of corporate earnings.
The U.S. Dollar is maintaining its losses for the week while Oil prices remain volatile, rebounding today after two days of sharp cuts.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.5 percent to 9,440 as of 6:50 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’s a look at all that can influence equities in today’s session:
- Markets in Australia and South Korea are trading with modest gains. Sentiment is capped after Samsung warned of a earnings hit in the second quarter due to the Covid-19 pandemic impacting demand.
- Markets are shut in Japan on account of a holiday.
- Futures on the Nasdaq index turned positive after Alphabet reported earnings that were better than estimates.
- Benchmark indices in the U.S. declined during a choppy trading session led by a retreat in megacap technology stocks and more companies withdrawing earnings forecasts.
- The U.S. Federal Reserve will announce its policy decision later tonight.
- West Texas Intermediate Crude rises 8 percent to $13.31 per barrel.
Earnings Fineprint: Axis Bank Q4FY20
- Net Interest Income up 19.3 percent to Rs 6,808 crore (Estimate: Rs 6,408 crore)
- Net loss of Rs 1,387.8 crore from Net Profit of Rs 1,505.1 crore (Estimate: Profit of Rs 1,478 crore)
- Provisions more than double to Rs 7,730 crore from Rs 3,470.9 crore sequentially
- GNPA at 4.86 percent from 5 percent last quarter
- NNPA at 1.56 percent from 2.09 percent last quarter
- Additional provision of Rs 3,000 crore made for Covid-19
- Net Interest Margins stood at 3.55 percent
- Slippages at Rs 3,920 crore from Rs 3,012 crore last year
- Write-offs at Rs 1,270 crore from Rs 1,701 crore last year
- Board authorises the bank to borrow / raise funds in Indian or foreign currency by issue of debt instruments up to an amount of Rs 35,000 crore.
- Figures for Net Interest Income and Net Loss are compared on a year-on-year basis
Axis Bank Management Commentary:
- Impact on economy and business due to Covid-19 will continue over time
- Advances up 15 percent while deposit book grew 19 percent compared to the previous year
- Remain conservative in all aspects of business
- Lower rated corporate book has declined
- Ensuring that entire unsecured lending is towards salaried customers
- Tapped RBI's LTRO facility and bought high quality commercial paper
- Expect more downgrades to BBB and below pool
- 80 percent of our retail book is secured
- Took full 10 percent provision against accounts under moratorium
- About 10-12 percent of the customers by number have opted for the moratorium and 25 percent by value
- About 10 percent of the retail customers have opted for the moratorium
Brokerages On Axis Bank
PhillipCapital
- Downgrade to neutral from buy
- Price target cut to Rs 500 from Rs 527
- Domestic loan growth drives NII; NIMs stable
- Proportion of loans under moratorium seems higher than peers
- Concerns on delinquencies and likely impact on credit cost
- Uncertainties around asset quality may act as a major overhang on the stock in the near-term
Emkay
- Downgrade to hold from buy
- Price target cut to Rs 520 from Rs 850
- Loss due to higher opex and provisions despite healthy NIMs and lower NPAs
- Retail - a key growth driver should see moderation
- See higher credit reserves to absorb incoming asset quality shock
- RoE improvement story faces Covid-19 led disruption
JPMorgan
- Neutral rating maintained
- Price target raised to Rs 475 from Rs 400
- Mixed results in Q4
- Ramp-up of coverage is a positive
- Slippages over FY20 however have remained higher
- Stake increase in Max Financial to have minimal impact on net worth
Stocks To Watch
- Reliance Industries: Long-term rating was affirmed by S&P Global Ratings at BBB+. Outlook remains stable. The ratings agency stated that the company's leverage is poised to improve and stabilize over the next 12-24 months owing to disciplined spending, asset monetisation, and resilient earnings. The company has also increased its stake in SkyTran Inc. to 26.3 percent from 17.4 percent due to conversion of convertible notes purchased earlier.
- Biocon: The company along with Mylan has launched Fulphila in Canada. Fulphila is approved by Health Canada to decrease the incidence of infection, as manifested by febrile neutropenia.
- Spandana Sphoorty Financial: 79 percent of the total branches (794 out of 1,006) are present in the green zone and all of these have been operational since April 20. Borrower base has not been significantly impacted due to the rural focus. Most borrowers reached out to are willing to pay. Collected Rs 13.3 crore in the last one week despite tight restrictions in operations.
- NLC India: Commences production of coal in Odisha, four years after allocation. Coal will be used to meet the requirements of existing and future coal-fired power plants.
- Gabriel India: Resumed operations at its plants in Haryana, Himachal Pradesh and Maharashtra.
- CG Consumer Electricals: Partially resumes operations at its Baddi plant.
- L&T: Allotted NCDs worth Rs 2,500 crore.
- Ujjivan Small Finance Bank: RBI has approved the appointment of Biswamohan Mahapatra as part-time Chairman for a period of 3 years.
- PPAV Automotive: Resumes operations at its Rajasthan and Gujarat facilities.
- PNB Housing Finance: Sanjaya Gupta has stepped down from the post of MD and CEO. Board has initiated the process to find his successor. Neeraj Vyas will be the interim MD and CEO.
- Federal-Mogul Goetze: Partially resumed operations at its Rajasthan Plant.
- Hexaware Technologies: To report its quarterly earnings today.
- Manappuram Finance: To meet Elara Capital today.
Brokerage Radar
HSBC On Aviation
- Industry set to report highest ever quarterly losses for Q4FY20
- Cash burn and liquidity access appear key to outlook
- Discussions likely to focus on business plans post Covid-19, liquidity management and fleet plans
- Retain hold ratings on both IndiGo and SpiceJet as strong headwinds remain a concern
ICICI Direct On Sumitomo Chemicals
- Initiates coverage with buy rating
- Price target of Rs 280
- ECC merger to improve group return ratios
- Strong parental advantage to improve business outlook
- Integration of ECC to provide synergies to group
Macquarie On Metals
- Valuations at cyclical lows witnessed during the global financial crisis and China growth concerns in H2CY15
- Near-term earnings visibility remains low and high leverage cap
- Medium-term demand outlook is intact
- Selective buyers with focus on balance health and relative earnings visibility
Morgan Stanley's India Portfolio Changes
- Financials and consumer staples which led the previous bull market, may give way to consumer discretionary and healthcare
- Remove GCPL, HDFC and MCX from model portfolio
- Add Sun Pharma, Apollo Hospitals, Lupin to model portfolio
- Trim 500 basis points weightage from financials and add it to healthcare
- Trim 200 basis points weightage from consumer staples and add 100 basis points each to Energy and Industrials.
Nomura On India
- India is at the cliff edge of a rating downgrade
- Ratings downgrade by Moody's and a negative outlook by Fitch appears likely
- Ratings downgrade to sub-investment grade can dent prospects for India bond inflows in the medium term
- Domestic factors including fiscal slippages and RBI support for issuance are key
Pledged Share Details
- GMR Infra: Promoter GMR Enterprises created pledge of 2.06 crore shares on April 27
- Emami: Promoter Diwakar Viniyog created pledge of 69 lakh shares on April 24
- Adani Ports and SEZ: Promoter SB Adani Family Trust revoked pledge of 1.53 crore shares on April 27
- Adani Transmission: Promoter SB Adani Family Trust revoked pledge of 69 lakh shares on April 27
(As Reported On April 28)
Trading Tweaks
- Price Band Revised To 5 Percent From 10 Percent: Jammu & Kashmir Bank
- Price Band Revised To 10 Percent From 20 Percent: Panacea Biotec
- Move Into ASM Framework: Graphite India, Lakshmi Vilas Bank, Shyam Century Ferrous, SORIL Infra Resources, Jaypee Infratech
- Move Into Short-Term ASM Framework: Infibeam Avenues, Panacea Biotec, Alembic Pharmaceuticals, Lumax Auto Technologies
- Move Out Of Short-Term ASM Framework: Lumax Auto Technologies, VST Tillers Tractors, eClerx Services, Wheels India, Kolte-Patil Developers, Shriram City Union Finance
Money Market Update
- The rupee gained for the second straight day to end at 76.19 against the U.S. Dollar as compared to Monday's close of 76.24.
F&O Cues
- Nifty April futures closed at 9,398; Premium widens to 18 points from 7 points
- Nifty April futures shed 13 percent in Open Interest and 9.5 lakh shares
- Nifty Rollovers at 43 percent
- Nifty Bank April futures closed at 20,676; Premium narrows to 5 points from 26 points
- Nifty Bank April futures shed 20 percent in Open Interest and 2.5 lakh shares
- Nifty Bank Rollovers at 39 percent
- Nifty Put-Call Ratio at 1.46 versus 1.36 across all series
Nifty Monthly Expiry: April 30
- Maximum Open Interest on Call side at 9,500 strike (26.6 lakh shares)
- Maximum Open Interest on Put side at 9,000 strike (33.3 lakh shares)
- Open Interest addition seen in 9,300 Put (10.3 lakh shares) and 9,400 Call (5.2 lakh shares)
