All You Need To Know Going Into Trade On August 27
Asian markets have opened mixed this morning ahead of a speech from Federal Reserve Chair Jerome Powell at the Jackson Hole symposium.
The U.S. Dollar has edged lower while the offshore yuan is trading at the highest level since January amid signs of tight liquidity.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,580 as of 7:00 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.
Let's take a look at the factors that may influence equities in today's session:
- Benchmark indices in Japan are declining while those in South Korea and Australia are flat.
- Futures on the Dow Jones are currently little changed. The index ended 0.3% higher on Wednesday.
- S&P 500 and Nasdaq ended at a record high for the fourth straight day while the MSCI All-Country World Index made a new record.
- U.S. durable goods orders were more than double of estimates, indicating factories will help support an economic rebound going ahead.
- U.S-China tensions over the South China Sea escalated on Wednesday with China firing four missiles into the disputed waterway.
- Yield on the 10-year treasuries fell to 0.68%.
- West Texas Intermediate crude was little changed at $43.36 per barrel, as was Gold, which traded at $1,953.88/Oz.
Get your daily fix of the global markets here.
Stocks To Watch
- Hindustan Aeronautics: Government proposes to sell 15% stake in the company through an Offere for Sale. It plans to sell 3.34 crore shares (10% stake) at a floor price of Rs 1,001 per share for Rs 3,347 crore, with an oversubscription option of another 1.67 crore shares (5% stake). The floor price is a discount of 15% to Wednesday's closing price. On full subscription of the OFS, government's stake in the company to come down to 74.47% from 89.97%. OFS opens for non-retail investors today and for retail investors on August 28.
- The government of Maharashtra has decided to temporarily reduce stamp duty on flats to 2% from 5% till December 31. The stamp duty will be 3% from January 1 to March 31. The move is to boost the stagnant real estate market which has been badly hit due to Covid-19. Stocks like Oberoi Realty, Godrej Properties, Sunteck Realty, Kolte-Patil Developers will be in focus.
- ICICI Securities: ICICI Bank approves sale of 64.42 lakh equity shares or 2% stake in the company via open market sale. This is being done to comply with minimum public shareholding requirements. As of June 30, the bank's stake in the company stood at 79.22%.
- PTI reports that a government panel has recommended regulated FDI in tobacco sector and establishing export-only tobacco farms to boost outward shipments. Stocks like ITC, Godfrey Phillips and VST Industries will be in focus.
- Mahindra & Mahindra: Signed a pact with Israel’s REE Automotive for electric commercial vehicles. The partnership will support REE Automotive’s global customer need for 2 lakh - 2.5 lakh electric commercial vehicle units over a few years, including Mahindra’s potential domestic and international volumes.
- Infosys: Announced the launch of artificial intelligence driven solution to automate helpdesk operations. To partner with Blue Prism for this venture.
- Coal India: PTI reports that the company has awarded Rs 2,900 crore contract to Belarus-based mining equipment manufacturer Belaz for supply of 96 dumpers with a capacity of 240-tonnes. The amount for the purchase of the dumpers would be met out of the company's own finances. Dumpers are primarily used in opencast mines and aid in the transport of bulk materials. Board has given nod to close the deal.
- Jindal Stainless: Board approved raising Rs 162.8 crore via issue of convertible equity warrants to promoter group Virtuous Tradecorp and Kotak Group’s Alternative Investment Fund.
- SRF: To consider raising capital via Qualified Institutional Placement and NCDs on August 31.
- Rossari Biotech: SBI Mutual Fund increased stake to 5.26% from 4.8% on August 25.
- Lakshmi Vilas Bank: Board approved raising Rs 1,000 crore via issue of equity shares and Rs 500 crore via NCDs. Board also approved increase in authorized share capital to Rs 1,000 crore from Rs 650 crore.
- Punjab & Sind Bank: DHFL’s outstanding dues of Rs 815.4 crore have been declared as a fraud and reported to RBI. Bank has made a provision of Rs 203.9 crore as per prescribed norms.
- Non-Nifty Earnings Today: Avanti Feeds, Himatsingka Seide, ICRA, IDFC, NMDC, Edelweiss Financial, PNC Infratech, GMR Infra.
Earnings Reported After Market Hours
Indraprastha Gas Q1FY21
- Revenue down 59% to Rs 638.5 crore
- Net profit down 87,5% to Rs 31.8 crore
- Ebitda down 77.8% to Rs 83.5 crore
- Ebitda margin at 13.1% from 24.3%
- All numbers are standalone and compared on a quarter-on-quarter basis
NACL Industries Q1FY21
- Revenue up 32% to Rs 252 crore
- Net profit up 4 times to Rs 5.6 crore
- Ebitda up 2.8 times to Rs 18.2 crore
- Ebitda margin at 7.2% from 3.4%
- All numbers are consolidated and compared on a year-on-year basis
Emkay On Zee Entertainment
- Upgrade to buy from hold
- Price target raised to Rs 272 from Rs 190
- Management disclosures to further improve in coming quarters
- Hope of not repeating balance sheet mistakes will regain investor interest
- Remain cautious on timely receipt of subscription receivables from Dish, Siti as well as investments in SugarBox
- Consistent improvement in cash generation over next 2-3 quarters will provide assurance on delivery on guidance in FY22.
- Key Risks: Weaker-than-expected cash generation and balance sheet improvement, delayed ad revenue recovery, significant impact on subscription revenue and higher losses from ZEE5.
Emkay On Jindal Stainless
- Downgrade to hold from buy
- Price target raised to Rs 52 from Rs 52
- Equity infusion offered at a discount caps upside
- QIP will result in an EPS dilution of 7.9%
HSBC On Punjab National Bank
- Reduce rating maintained
- Price target of Rs 25
- Moratorium levels remain elevated
- Thin operating profit and capital ratios limit buffers amid uncertainty
- Integration of two other banks, ongoing disruptions due to Covid-19 cloud near-term outlook
Jefferies On Indian I.T.
- Assuming coverage on the sector
- Growing digital emphasis to keep I.T. spending robust over the next five years
- Indian I.T. services firms are well-positioned to gain share in the U.S. market
- Expect recovery from FY22E
- Further re-rating likely despite premium valuations
- Assume coverage on Infosys with price target of Rs 1,140
- Infosys is our top pick
- Assume coverage on HCL Tech with buy rating and price target of Rs 835
- Assume coverage on Tech Mahindra with buy rating and price target of Rs 840
- Assume coverage on TCS with buy rating and price target of Rs 2,580
- Assume coverage on Wipro with underperform rating and price target of Rs 240
- Assume coverage on Newgen Software with price target of Rs 250
Pledged Share Details
- Sun Pharma: Promoters released pledge of 67.55 lakh shares between August 19-24.
- Motherson Sumi: Promoter Samvardhana International released pledge of 1.6 crore shares between August 20-21.
- Apollo Tyres: Promoters revoked pledge of 1.21 lakh shares on August 21.
(As Reported On August 26)
Who’s Meeting Whom
- MCX: To meet Wellington Management on August 27.
- Rallis India: To meet Steinberg India Advisors, Tata Mutual Fund and DSP between August 27-28.
- Endurance Tech: To meet JF Asset Management (Hong Kong) on August 28.
- Eicher Motors: To meet Temasek, Matthews Asia and Fidelity Group between August 27-28.
- VA Tech Wabag: Sumitomo Corporation sold 24.57 lakh shares (4.49%) at Rs 210.49 per share.
- Ceat: Plutus Wealth Management acquired 7.35 lakh shares (1.82%) at Rs 900 per share and Jwalamukhi Investment sold 7.25 lakh shares (1.79%) at Rs 900 per share.
- Equitas Holdings: Societe Generale sold 22.19 lakh shares (0.65%) at Rs 55.36 per share.
- Atul Auto: Birla Mutual Fund sold 3 lakh shares (1.37%) at Rs 197.26 per share.
- Ramco Systems: HDFC Mutual Fund acquired 1.57 lakh shares (0.51%) at Rs 240 per share.
- AGM Date: Sterlite Tech, Pfizer, Amber Enterprises, Greenply Industries, Sudarshan Chemical, Kokuyo Camlin, Ramco Systems, Nava Bharat Ventures, InterGlobe Aviation, Munjal Showa, Hindustan Zinc, Aurobindo Pharma, Cadila Healthcare, Cipla, Embassy Office Parks REIT, Expleo Solutions, GMM Pfaudler, Bosch, Orient Paper, Sun Pharma.
- Fund Raising: Zydus Wellness.
- Voluntary Delisting (Board Meeting): Allcargo Logistics.
- Ex-Date For Share Buyback: Triveni Engineering.
- Price Band Revised From 10% To 5%: Butterfly Gandhimathi Appliances, Eros International Media, Inspirisys Solutions, RSWM, SORIL Infra Resources, Swelect Energy Systems.
- Price Band Revised From 20% To 10%: California Software.
- Price Band Revised From 20% To 5%: Dhunseri Ventures, Nandan Denim, Royal Orchid Hotels.
- Move Into ASM Framework: Omax Autos, Kakatiya Cement Sugar & Industries, Vardhman Special Steels, Excel Realty & Infra.
- Move Into Short Term ASM Framework: Music Broadcast, Affle, NIIT, GSS Infotech, Gujarat Narmada Valley Fertilizers and Chemicals, Minda Industries, Somany Ceramics, Sadbhav Infrastructure Project, Kellton Tech Solutions.
- Move Out Of Short Term ASM Framework: Unichem Laboratories, V2 Retail, Sharda Motor Industries, Sanco Industries, Shriram City Union Finance, Hind Rectifiers, Jamna Auto Industries
- Jamna Auto: Promoter Map Auto acquired 37,000 shares on August 24.
- India Cements: Promoter Prince Holdings acquired 4.93 lakh shares on August 24.
- Mindtree: Promoters sold 7.2 lakh shares between August 20-24.
- Xelpmoc Design and Tech: Promoter Srinivas Koora sold 1.18 lakh shares between August 21-24.
(As Reported On August 26)
Money Market Update
- The rupee ended little changed at 74.3 against the U.S. Dollar as compared to Tuesday's close of 74.33.
- The currency was the fifth best performer in Asia on Tuesday.
- Nifty August futures closed at 11,554.5; premium of 5 points from 4 points
- Nifty Rollovers at 65%
- Nifty Bank August futures closed at 23,441; premium of 27 points from 1 point
- Nifty Bank Rollovers at 54%
- Nifty Put-Call Ratio at 1.54
- Enters F&O Ban: Indiabulls Housing Finance
- Out of F&O Ban: Nalco
- Stocks In F&O Ban: Ashok Leyland, BHEL, Canara Bank, GMR Infra, Indiabulls Housing, LIC Housing Finance, PNB, SAIL, Vedanta, Vodafone Idea.
Nifty Monthly Expiry: August 27
- Maximum Open Interest on Call side at 11,600 strike (33.4 lakh shares)
- Maximum Open Interest on Put side at 11,500 strike (39.9 lakh shares)
- Active Options: 11,500 Put (24.5 lakh shares) and 11,650 Call (3.6 lakh shares)