All You Need To Know Going Into Trade On February 26
Asian equities have opened lower on the final trading day of the week as global bonds continued to sell-off and the U.S. Dollar strengthened.
Benchmark indices in Japan, Australia and South Korea have declined over 2% each this morning. Australian bonds slumped while Japan's 10-year yield rose to the highest since early-2016. The 10-year benchmark treasury surged as much as 23 basis points to 1.6% on Thursday.
Oil prices are set for their fourth straight monthly advance. Brent crude is set for its best February since 2015 while West Texas Intermediate will have its best February since at least three decades, for which data is available on Bloomberg.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 1.9% to 14,892 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.
Let’s take a look at the factors that may influence equities in today’s session:
- Futures on the Dow Jones are fluctuating between gains and losses. The index ended 1.7% lower on Thursday.
- “It’s all about interest rates,” said Randy Frederick, vice president of trading and derivatives for Schwab Center for Financial Research. Tech “has been a relative outperformer. As it led on the way up, it will likely lead on the way down too.”
- Finance Ministers and central bankers from the G-20 will meet virtually today.
- The Bloomberg Dollar Spot Index rose 0.1% after a 0.6% rise on Thursday.
- Yield on the 10-year treasuries stood at 1.51%.
- West Texas Intermediate crude fell 0.5% to $63.19 per barrel.
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Stocks To Watch
- HCL Technologies: HCL America Inc., a wholly-owned step-down subsidiary of the company has approved the proposal for issuance of U.S. Dollar denominated unsecured notes aggregating to an amount not exceeding $500 million. The Notes are backed by a corporate guarantee of the company. The guarantee is subject to the aggregate liability of the company not exceeding $525 million, (105 % of the principal amount of the notes).
- Infosys: Has announced its commitment to add 300 American workers in Pennsylvania in continuation of its overall hiring plan in the U.S. The company will recruit for a range of opportunities across technology and digital services, client administration, and operations as it expands its new Retirement Services Center of Excellence.
- RBL Bank: MD & CEO Vishwavir Ahuja sold 14.4 lakh shares between February 19-25 for Rs 35.07 crore. The share sale was done post a pre-clearance taken by him. Ahuja said in his letter that while the sale is purely for personal and family reasons, he may have to sell another 3-4% of his holdings over the next few months in order to complete a property transaction.
- Bank of Baroda: The Board of Directors has approved raising of funds not exceeding Rs 4,500 crore through issue of equity shares through qualified institutional placement subject to the approval of the regulatory and statutory authorities.
- Zensar Technologies: Has consented and authorised its wholly-owned subsidiary Zensar Technologies Inc. to divest 100% equity shareholding in Aquila Technology Corp. to Business Integra Technology Solutions - which is a global provider of I.T. services and solutions. The sale consideration will comprise of $6,00,000 in cash followed by an additional deferred earnout of $6,00,000 based on the performance, set out in the agreement for sale. The company intends to complete the process on or before March 4, 2021.
- Aptech: The company currently operates in two business segments – Retail and Institutional. As part of re-organisation of the business, the two segments were evaluated during the meeting of the Strategy Committee. The company has decided to focus on the Retail business and has recommended that, the Institutional (B2B) business be evaluated for a potential exit. A merchant banker has been appointed to identify potential buyers. The company intends to complete the process within a period of 12-16 weeks.
- Mahindra Lifespace Developers: Has acquired 7.89 acres of land to develop a residential project in Kanakpura Road, Bengaluru. The project will offer approximately 5 lakh sq. ft. of carpet area. The launch of the project is planned for FY22.
- South Indian Bank: The Board of Directors has approved issuance of up to 28.30 crore shares of face value of Re. 1 each to HDFC Life Insurance Company, Kotak Mahindra Life Insurance Company, SBI Life Insurance Company and ICICI Lombard General Insurance Company, at a price of Rs 8.48 per equity share aggregating to Rs 239 crore, on a preferential basis. Further, an extraordinary general meeting of the shareholders of the company is scheduled on March 23, 2021 for seeking their approval for the proposed Preferential Allotment.
- Uflex: The Brickwork Ratings has reaffirmed the rating of the company's proposed NCD issue of Rs 400 crore at A+/Stable.
- To Enter F&O Segment Today: Alkem Laboratories, AU Small Finance Bank, Deepak Nitrite, IRCTC, NAM India, L&T Infotech, Navin Fluorine, Pfizer, PI Industries, Trent, Alembic Pharma, City Union Bank, Granules India, Gujarat Gas, L&T Technology Services, Mphasis.
Motilal Oswal On NTPC
- Maintains buy rating
- Price target of Rs 141
- Ministry of Power's rules on late payment surcharge will not have a significant impact on the P&L
- Had already baked in lower LPS income for FY22E/FY23E
- Overdue and LPS situation is a key monitorable, particularly with the ministry stepping to supersede the CERC regulations
- Improvement in situation with respect to receivables will improve, easing investor concerns
- Remain positive on the stock
Emkay On Indian Automobiles
- Wholesales growth likely to continue for tractors, PVs and two-wheelers
- Channel checks indicate better retail sales in tractor and PVs, while its subdued in two-wheelers
- Domestic volumes should grow at 101% for Tata Motors and 29% for M&M on a low base
- Discounts have declined year-on-year by up to 2% of vehicle prices
- Volume performance in south, east and west regions for two-wheelers has been better than the north
- Top picks among OEMs include Tata Motors, Ashok Leyland, Maruti Suzuki and Eicher Motors
- Like Bharat Forge and Apollo Tyres among ancillaries
Prabhudas Lilladher On Burger Chains
- Initiating coverage on Burger King with a buy rating and price target of Rs 221
- Huge competitive advantage to capitalise on emerging growth opportunities
- Created a strong consumer connect with millennials by offering premium products at value pricing
- Expect Burger King to report loss of Rs 150 crore in FY21 and have a PAT turnaround in FY23
- Launch and scale-up of BK Cafe can provide an upside of 10-15% by FY26
- Initiating coverage on Westlife Development with a buy rating and a price target of Rs 618
- Will emerge stronger post the pandemic led by McDonald's gain from customer shift towards brands with hygiene
- Expansion plans under vision 2022 are on track
- The convenience channel emerges as a key driver
- McCafe will be a key growth driver and value creator
- Buy for long-term gains
Pledge Share Details
- JSW Steel: Promoter Sahyog Holdings revoked pledge of 1.14 crore shares on February 22.
- Asahi India Glass: Promoter Sanjay Labroo revoked pledge of 1.30 lakh shares on February 23.
- Sun Pharmaceutical Industries: Promoter Shanghvi Finance revoked pledge of 15.48 lakh shares on February 20.
- Aurobindo Pharma: Promoters RPR Sons Advisors and P. Suneela Rani created a pledge of 30 lakh shares on February 24.
- JSW Energy: Promoter JSW Investments revoked pledge of 1.20 crore shares on February 22.
- Orient Cement: Promoter Central India Industries revoked pledge of 24.50 lakh shares on February 23.
- Orient Electric: Promoter Central India Industries revoked pledge of 13 lakh shares on February 23.
- Adani Green Energy: Promoters Gautam Adani & Rajesh Adani revoked pledge of 10 lakh shares on February 24.
As Reported On February 25.
- Himadri Speciality Chemical: BC India Investments sold 2.59 crore shares (6.21%) at Rs 42.96 per share. Plutus Wealth Management LLP bought 97.81 lakh shares (2.34%) at Rs 43.98 per share.
Who’s Meeting Whom
- Eicher Motors: To meet Comgest Singapore on February 26.
- Indian Energy Exchange: To meet Trident on February 26.
- INOX Leisure: To meet Sharekhan on February 26.
- Brigade Enterprises: To meet Zeus Capital and Arth Capital on February 26.
- Symphony: To meet Taiyo Pacific Partners on March 2.
- Price Band Revised From 20% To 10%: Asian Granito India
- Ex-Date Buyback: Smartlink Holdings
- Record Date Buyback: Gujarat Apollo Industries
- Record Date Bonus Issue: Nakoda Group of Industries
- Record Date Interim Dividend: Amara Raja Batteries, Career Point, Dharamsi Morarji Chemical Co, GM Polyplast, The Yamuna Syndicate
- Move Into Short-term ASM Framework: Optiemus Infracom, Yaarii Digital Integrated Services
- Move Out Of Short-term ASM Framework: HEG, Jaiprakash Power Ventures
- Move Out Of ASM Framework: Larsen & Toubro Infotech, Deepak Nitrite
- Dabur India: Promoter Ratna Commercial Enterprises acquired 15,000 shares on February 23.
- JSW Steel: Promoter Sarika Jhunjhunwala sold 5,000 shares on February 22.
- Deepak Fertilisers: Promoter Robust Marketing Services acquired 1.17 lakh shares on February 23.
- Prakash Industries: Promoter Ved Prakash Agarwal acquired 20,000 shares on February 24.
- Aarti Industries: Promoter Jaya Gogri sold 3,552 shares on February 24.
- NRB Bearings: Promoter Aziz Yousuf Zaveri acquired 3,179 shares between February 19-23.
As Reported On February 25.
Money Market Update
- The currency ended at 72.43 against the U.S. Dollar as compared to Wednesday's close of 72.33.
- Nifty March futures ended at 15,173; premium of 76 points
- Nifty March futures added 54.3% and 45,056 shares in Open Interest
- Nifty Bank March futures ended at 36,719; premium of 170 points
- Nifty Bank March futures add 36.5% and 14,416 shares in Open Interest
- Nifty Put-Call Ratio at 1.9