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All You Need To Know Going Into Trade On Aug. 21

Here’s a quick look at all that could influence equities today.

Employees monitor stocks at a brokerage firm in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)
Employees monitor stocks at a brokerage firm in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

Stocks in Asia declined on low volumes as investors assessed the latest news on trade talks and awaited more clues on U.S. monetary policy.

Japanese equities bore the brunt of losses, with stocks also lower in Australia and South Korea. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.15 percent to 11,012 as of 7:15 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 quick look at all that could influence equities today.

  • The S&P 500 Index closed lower as U.S. President Donald Trump showed no urgency to resolve trade friction with China and renewed his call for a “big” Federal Reserve rate cut.
  • U.S. benchmark 10-year yields steadied after retreating Tuesday, as did the dollar after slipping from this year’s high.
  • Oil rebounded to close above $56 a barrel as traders looked ahead to a key government tally of stockpiles in the world’s biggest economy. Gold dipped 0.1 percent to $1,505.15 an ounce.
  • Minutes of the Fed’s July meeting will provide details on the discussions leading to the first interest-rate cut in a decade when they are released on Wednesday.
Opinion
Global Bond Rally Sidesteps India as Deficit Fears Mount

Brokerage Radar

Citi on NMDC

  • Maintained 'Buy', target price fixed at Rs 120.
  • See immediate impact on NMDC’s volumes if Donimalai lease is lost.
  • Bigger worry would be the fate of the other leases like Chhattisgarh and Kumaraswamy mines.
  • Concerns highlighted raise questions about the sustainability of business outlook and profitability.
Opinion
NMDC Seeks Central Government’s Help Against Withdrawal Of Donimalai Mine Lease By Karnataka

Macquarie on NTPC

  • Maintained 'Outperform'; cut target price to Rs 141 from Rs 148.
  • NTPC is targeting a 15 percent compounded annual growth rate in its regulated equity base over the next 4 years.
  • Expect double-digit earnings growth from financial years 2019 to 2022 with dividend payout likely to be 50-60 percent.
  • Stock is a good buy in current uncertainty.

Macquarie on Mahanagar Gas

  • Upgraded to 'Outperform' from 'Neutral'; raised target price to Rs 950 from Rs 815.
  • Impending overhang on the stock is behind with BG Asia Pacific selling its entire stake.
  • See MGL as a cash machine, expect robust free cash flow generation over the next three years.
  • Premium margins likely to sustain.

UBS on Oil Marketers

  • About 120-200 percent upside potential for oil marketing companies, if strategic deal valuations of RIL are applied.
  • BP's entry into India's fuel retailing signifies long-term value and potential.
  • OMCs' refining/petchem undervalued even at 36 percent discount to RIL-Aramco deal.
  • Reiterate Buy on OMCs - IOC (target price Rs 200), BPCL (target price Rs 600) and HPCL (target price Rs 445)

Indian ADRs

All You Need To Know Going Into Trade On Aug. 21
Opinion
India’s Top Portfolio Managers Suffer Worst Monthly Loss In July Since IL&FS Crisis

Stocks To Watch

  • NMDC: Karnataka government withdrew approval to extend mining lease for Donimalai and will auction the block. The company filed revised application against the Karnataka government’s order and requested it to withdraw its Aug. 17 letter. Hearing for the order was fixed on Aug. 21.
  • Dr. Reddy’s Laboratories received eight Form 483 observations by U.S. FDA in the audit of formulations manufacturing plant at Duvvada, Vishakapatnam.
  • Sun Pharma Advanced Research: Complaint has been filed by Abraxis Biosciences in the U.S. Court which alleges the company’s filing of new drug application for Taclantis injection as an act of infringement of the Orange Book listed patents for Abraxane.
  • Alembic Pharma received zero Form 483 observations by the U.S.FDA at the end of the inspection of company’s Bioequivalence facility in Vadodra.
  • Mahindra Logistics to manage Volkswagen India’s parts distribution. The company will service two lakh square feet of warehousing space and PDC operations to the Volkswagen Group.
  • Deepak Nitrite: ICRA upgraded long term ratings to ‘AA-’ from ‘A+’, with outlook changes from ‘Positive’ to ‘Stable’.
  • Essel Propack: Blackstone Group has launched into syndication a five-year term facility backing the purchase of a 75 percent stake. (Bloomberg News)
  • KRBL obtained trademark registration of its Flagship Brand ‘India Gate’ on Aug. 12, with user claim since January 1979.
  • Tourism Finance Corporation: Shapoorji Pallonji Finance reduced stake in the company from 6.61 percent to 4.41 percent via release of pledge.
  • SpiceJet to shift its entire operations in Mumbai to Terminal 2 from Oct. 1.
  • Dabur to contribute $16 million as share capital in its wholly owned arm Dermoviva Skin Essentials.
  • Reliance Capital: Jupiter Asset Management sold 4.65 percent stake in the company on Aug. 16.
  • IOL Chemicals and Pharma stated that they have made pre-payment of term loan of Rs 9.52 crore due to banks in addition to scheduled pre-payment. Current prepayment of term loan stands at Rs 107.7 crore for this financial year.
  • Allahabad Bank has appointed five companies to help with the share sale to large investors, Managing Director and Chief Executive Officer Mallikarjun Rao said.  The planned share sale will bring government’s stake in the bank by 8-10 percent.  The capital to be raised via QIP will last the bank until June 2020 to support credit growth, after which the bank might look to raise funds again. (Bloomberg News)
  • Oriental Bank of Commerce said customers can now avail home and vehicle loans at repo-linked interest rates starting from 8.35 percent and 8.70 percent, respectively. (PTI)
  • HDIL has been admitted under Insolvency and Bankruptcy Code as per National Company Law Appellate Tribunal order, pursuant to an application filed by Bank of India.
  • BEML: L&T Mutual Fund increased its stake in the company from 4.97-5.11 percent.
  • Jai Prakash Associates stated that the Competition Commission of India had imposed a penalty of Rs 13.82 crore during financial years 2010-2012.

Key Events To Watch

  • 4:30pm: SEBI Chairman to address media after board meet.
  • 5pm: RBI will release minutes from the latest monetary policy meeting. The six member MPC led by Governor Shaktikanta Das voted by a 4-2 majority for 35 basis point rate cut.
Opinion
SEBI Mulls Tighter Check On Rating Agencies, Rewarding Informants

Bulk Deals

Hindustan Oil Exploration

  • Fidelity Funds acquired 6.68 lakh shares (0.51 percent) at Rs 102.5 each.

Mahanagar Gas

  • BG Asia Pacific Holdings sold 98.8 lakh shares (10 percent) at Rs 780 each.
  • HDFC MF acquired 5.78 lakh shares (0.59 percent) at Rs 780 each.
  • Goldman Sachs acquired 6.73 lakh shares (0.68 percent) at Rs 780 each.
  • SBI Life Insurance acquired 6.2 lakh shares (0.63 percent) at Rs 780 each.
  • Societe General acquired 12.82 lakh shares (1.3 percent) at Rs 780 each.

Trading Tweaks

  • Embassy Office Parks REIT record date for distribution.
  • AGC Networks to move into short term ASM Framework.
  • INEOS Styrolution, Saregama , AGC Networks, Shreyas Shipping & Logistics, Inox Wind price band revised to 10 percent.

Who’s Meeting Whom

  • Mahindra & Mahindra to meet Matthews International Capital Management and RBC Asset Management from Aug. 21-28.
  • Eris Lifesciences to meet Seven Canyons Advisors and Stockpro Advisors on Aug. 21.
  • Essel Propack to meet Dalton Investment on Aug. 23.
  • Syngene International to meet Partners Bay on Aug. 22.
  • Lumax Auto Tech to meet IIFL Institutional Equities on Aug. 22.

Insider Trading

  • Deepak Nitrite promoter & director Deepak Mehta acquired 36,000 shares on Aug. 14.
  • Jindal Stainless promoter Ratan Jindal acquired 1.4 lakh shares from Aug. 14-16.
  • NIIT Technologies promoter Hulst BV acquired 1.59 lakh shares on Aug. 9.
  • Lakshmi Vilas Bank promoter KR Pradeep acquired 1.1 lakh shares on Aug. 19.
  • Spencer’s Retail promoter group Castor Investments acquired 1 lakh shares on Aug. 19.

Money Market Update

  • The rupee closed at 71.71/$ versus 71.44/$ on Monday.
Opinion
Indian Rupee Has Lost Its Trade War Winning Edge, Says JPMorgan

F&O Cues

August Futures

  • Nifty futures closed at 11,028, premium of 11 points versus 4.2 points.
  • Nifty futures open interest up 3 percent, adds 5.2 lakh shares in open interest.
  • Bank Nifty futures closed at 27,995, premium of 12.6 points versus 16.9 points.
  • Bank Nifty futures open interest down 4 percent, sheds 60,000 shares in open interest.

Options

  • Nifty PCR at 1.12 versus 1.17 (across all series).

Nifty Weekly Expiry Aug. 22

  • Max open interest on call side at 11,100 (18.7 lakh shares).
  • Max open interest on put side at 11,000 (17.4 lakh shares).
  • Max open interest addition seen in 11,000C (+6.3 lakh shares), 10,950P (+4.4 lakh shares).
  • open interest shedding seen at 11,100P (-2.8 lakh shares), 11,050P (-2.7 lakh shares).

Nifty Monthly Expiry Aug. 29

  • Max open interest on call side at 11,000 (26 lakh shares).
  • Max open interest on put side at 11,000 (38 lakh shares).
  • open interest shedding seen at 10,700P (-5.6 lakh shares), 11,500C (-3 lakh shares).
All You Need To Know Going Into Trade On Aug. 21