All You Need To Know Going Into Trade On Aug. 29

Asian stocks were off to a muted start Thursday as investors awaited the next steps in the U.S. and China trade negotiations. Shares were little changed in Tokyo, Sydney and Seoul, while U.S. futures slipped.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 11,042 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.

• S&P 500 Index closed higher Wednesday on below average volume, helped by a rally in energy shares.
• Asian currencies were little changed after Treasury Secretary Steven Mnuchin said the U.S. doesn’t intend to intervene on the dollar for now.
• The pound held losses after U.K. Prime Minister Boris Johnson moved to suspend parliament, increasing the risk of a no-deal Brexit.
• Oil maintained gains after a bigger-than-expected drop in American crude inventories and as Iran all but ruled out a U.S. meeting.
• The second reading of Q2 U.S. GDP Thursday is expected to refine estimates of slightly lower economic growth.

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Earnings Reaction To Watch

Accelya Solution (Q1, Consolidated YoY)

• Revenue up 10.2 percent to Rs 109.1 crore.
• Net profit up 20.5 percent to Rs 26.4 crore.
• Ebitda up 12.1 percent to Rs 39.8 crore.
• Margin at 36.5 percent versus 35.9 percent.

Brokerage Radar

Brokerages on Nifty 50 Index Changes

Edelweiss

• Nestle will see an inflow of $112 million due to inclusion.
• Indiabulls will see an outflow of $41 million due to exclusion.

Motilal Oswal

• Nestle will see an inflow of $95 million due to inclusion.

UBS on India Market Strategy

• Key policy push to tap golden opportunity India has ahead.
• Steps to further aid integration of Indian manufacturing into global supply chain.
• Expect more measure ahead given the scale of China’s manufacturing.
• Domestic pull and global push factors for FDI flow to India remain favourable in medium term.

BofAML on Coal India

• Maintained 'Buy' with target price of Rs 290.
• 100 percent FDI in coal mining approved; but long way to go.
• Commercial mining is yet to pick up.
• Do not see risk for Coal India in the immediate term.

BofAML on Container Corp

• Maintained 'Underperform'; cut target price to Rs 467 from Rs 477.
• Weak export-import to drag earnings; expect volume growth to remain muted.
• SEIS income risks for financial year 2020-21 growth; see weak other income.
• Near term outlook weak with expensive valuations.

Citi on ICICI Bank

• Maintained 'Buy' with target price of Rs 510.
• Better net interest margin and lower credit costs should drive return on equity expansion.
• Concerns on retail exposure are overdone.
• Strong liabilities should help net interest margins.

Macquarie on Infosys

• Maintained 'Outperform' with target of Rs 810.
• Revenue growth to be aided by large deal wins; Ebit margin recovery remains focus area.
• Management says no material change in business environment.
• Sustained revenue growth and recovery in margins to narrow valuation gap with TCS.

UBS on Kotak Mahindra Bank

• Downgrade to 'Neutral' from 'Buy'; cut target price to Rs 1,620 from Rs 1,650.
• Cautious outlook would mean slower growth in the near term.
• Valuation premium to peers has increased significantly.
• Cut earnings estimates by 3.6 percent/4.7 percent for financial years 2019-20/2020-21 on weaker outlook.

Citi on Polycab

• Initiated 'Buy' with target price of Rs 736.
• Well placed to capitalize on growth opportunities in cables, wires and fast moving electrical goods.
• More successful than others in the FMEG business.
• Strong balance sheet and cash flow with improving working capital.
• Expect earnings per share to grow at a compounded-annual growth rate of 26 percent over financial years 2019-21.

HSBC on Grasim Industries

• Maintained 'Buy'; cut target price to Rs 790 from Rs 910.
• Softening prices and market cap erosion of Vodafone Idea has driven recent correction.
• Steep discount to Vodafone Idea is unjustified.
• Falling pulp prices and price recovery in viscose staple fiber to benefit in coming quarters.

Macquarie on Zee Entertainment

• Maintained 'Neutral'; cut target price to Rs 375 from Rs 390.
• Ad environment remains subdued, while subscription is still strong.
• Strong launch pace of Zee5 originals continues.
• Expect Zee to trade below fair value until repayment of loan is done.

Indian ADRs

Stocks to Watch

• Indiabulls Housing Finance to be excluded from Nifty 50 Index with effect from Sept. 27. Stock will be replaced by Nestle India. Replacement to be applicable to Nifty 50 Equal Weight Index. Board approved raising non-convertible debentures up to Rs 1,50,000 crore.
• InterGlobe Aviation named M. Damodaran as Independent Director and Anil Parashar as Non-Executive Director. Company also stated that M. Damodaran and Anil Parashar have not been debarred from holding office of director by virtue of a Securities and Exchange Board of India order or any such authority. Maximum number of directors to increase from six to 10. S.R. Batliboi & Co. LLP appointed as Statutory Auditors in place of retiring auditors BSR & Co. LLP.
• Piramal Enterprises: Committee deferred the issue of NCDs up to Rs 3000 crore to a future date.
• IIFL Wealth Group to acquire L&T Finance Holdings’ wealth management business for Rs 230 crore. Group entered into a definitive agreement to acquire 100 percent stake in L&T Finance Holding’s wholly owned arm L&T Capital Markets. Transaction is subject to regulatory approvals. L&T Capital Markets has Assets Under Advice of Rs 24,000 crore.
• Lakshmi Vilas Bank: Parthasarathi Mukherjee resigned from post of managing director and chief executive officer , with effect from Aug. 31. Board approved raising Rs 1,000 crore via various modes of equity and raising up to Rs 500 crore via NCDs.
• Sun Pharmaceutical Industries has initiated clinical development of new indications for its psoriasis drug Ilumya which will require front-ended investments, Chairman Israel Makov said at shareholders’ meeting in Vadodara. (Bloomberg News)
• Wockhardt: India Ratings and Research downgraded long term loan facilities to ‘IND BB+’ from ‘IND BBB-’, with outlook remaining Negative due to refinancing risks, R&D expenses and regulatory overhang.

• DHFL defaulted in NCDs interest payment worth Rs 22.91 crore, which was due on Aug. 28.
• Balaji Amines arm has completed the EU REACH Registration process for Ethylenediamine. Registration will allow the company to supply the Ethylenediamine to large number of European customers.
• Central Bank of India: Board to consider increasing authorized share capital on Aug. 31.
• Mahindra CIE Automotive: Acacia Banyan Partners increased in their stake n the company from 4.75 percent to 5.01 percent on Aug. 21.
• Kingfa Science & Technology: To start commercial production in its new manufacturing facility in Pune from Sept. 2.

Bulk Deals

Time Technoplast

• Dalton Asia Fund acquired 23.3 lakh shares (1.03 percent) at Rs 64.35 each.
• Morgan Stanley Asia sold 21.9 lakh shares (0.97 percent) at Rs 64.35 each.

Talwalkars Better Value Fitness

• Nissay World Sports Fund sold 1.8 lakh shares (0.59 percent) at Rs 8.15 each.

Talwalkars Lifestyles

• Nissay World Sports Fund sold 1.77 lakh shares (0.57 percent) at Rs 14.4 each.

Cox & Kings

• University of Texas sold 12.7 lakh shares (0.72 percent) at Rs 4.69 each.

Trading Tweaks

• Brigade Enterprises record date for bonus issue at 1:2.
• NR Agarwal Industries, Solara Active Pharma Sciences to move into short term ASM Framework.
• AGC Networks to move out of short term ASM Framework.
• Shreyas Shipping & Logistics price band revised to 5 percent.

Who’s Meeting Whom

• Allcargo Logistics to meet Moerus Capital on Sept. 9.
• Heidelberg Cement to meet Franklin Templeton MF on Aug. 29.
• Mahindra Holidays & Resorts to meet Julius Baer Group on Aug. 29.
• Container Corporation of India to meet Walter Scott, Dolat Capital Market and other investors from Sept. 3-19.
• Navkar Corporation to meet Kotak Securities on Aug. 29.
• TVS Motor Company to meet UBS Securities on Aug. 29.

Insider Trading

• Jindal Stainless promoter Ratan Jindal acquired 1.52 lakh shares from Aug. 23-26.
• Jagran Prakashan promoter groups acquired 84,000 shares on Aug. 26.
• IDFC First Bank promoter IDFC Financial acquired 1.15 lakh shares on Aug. 26.

Money Market Update

• The rupee closed at 71.77/$ versus 71.48/$ on Tuesday.