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All You Need To Know Going Into Trade On March 19 

Stocks in the news, big brokerage calls of the day, complete trade setup and much more! 

Commuters with and without protective masks exit a Metro station near Connaught Place in New Delhi, India. (Photographer: Prashanth Vishwanathan/Bloomberg)
Commuters with and without protective masks exit a Metro station near Connaught Place in New Delhi, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Stocks in Japan gained along with the Euro, while U.S. futures pared losses after the European Central Bank announced a temporary program of asset purchases worth €750 billion or $820 billion to fight the impact of the Coronavirus.

The Nikkei 225 index in Japan was up 1.4 percent while shares in Australia traded with modest gains. The Dow Futures are trading with gains of 350 points as of 6:15 a.m.

The dollar strengthened for the seventh straight day. The pound sterling fell to its lowest against the dollar since 1985.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 1.71 percent to 8,350 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.

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

  • Stocks on Wall Street fell to their session lows after U.S. President Donald Trump offered few details on the specifics that the treasury secretary is discussing with the Congress.
  • The S&P 500 fell as much as 9.8 percent before a late-session bounce. White House Economic Advisor Larry Kudlow said that the government might take an equity position as part of an aid package.
  • Sovereign debt continued to tumble around the world while municipal bonds extended their deepest rout since 1987.
  • Oil prices staged a recovery after falling 24 percent on Wednesday, which took prices to their lowest level in 18 years.

Get your daily fix of global markets here.

All You Need To Know Going Into Trade On March 19 

Stocks To Watch

  • Yes Bank: Promoter Madhu Kapur sold 2.48 crore shares at Rs 65.07 per share for Rs 161.4 crore. Her holding stake in the Bank has fallen from 17.28 crore shares to 14.8 crore shares in terms of value and holding declined to 1.18 percent of the paid-up share capital of the bank.
  • Yes Bank: Announced that its branch operations will open one hour earlier at 08:30 hours from March 19 to 21. It has also extended banking hours to 5:30 p.m. across branches for senior citizen customers, from March 19 to March 27.
  • ITC: The dividend payout ratio in the medium-term is expected be around 80-85 percent of the company's net profit. The average dividend payout in the last three years was 69 percent. The dividend could be Rs 10 to 10.6 per share, based on Bloomberg Consensus EPS estimates for FY20 which implies a dividend yield of 6.6-7 percent at current market price.
  • InterGlobe Aviation: IndiGo, Vistara may ground jets as virus cases pick up in India. On March 17, Go Air had announced the cancellation of its international flights. (Bloomberg News)
  • Motherson Sumi: The company in its conference call said that customers in Germany and Spain have been affected due to shutdowns. Business in Europe is impacted but there has been no reduction in demand. Plants in the U.S. are running normally. Only one out of the company’s 27 manufacturing units in China is non-operational, while the rest have 70 to 80 percent attendance. Indian operations are running smoothly and the company wants to conserve cash and not considering share buyback.
  • Equitas Holdings: The company in its conference call has stated that it has delayed the IPO of Equitas Small Finance Bank as the markets are volatile and it s not an opportune moment to get listed.
  • Ashok Leyland: Board approved a proposal to acquire up to an additional 19 percent stake in its NBFC-arm Hinduja Leyland Finance for Rs 1,200 crore.
  • Srikalahasthi Pipes: The company has stated that commercial operation of the company’s second furnace to produce Ferro Silicon has started.
  • Bajaj Finserv: MD & CEO Sanjiv Bajaj appointed as Chairman of the company with effect from March 17.
  • Motilal Oswal Financial Services to consider share buyback on March 21
  • Dalmia Bharat to consider share buyback on March 21
  • Orient Refractories to file an appeal against NCLT order which rejected the scheme of amalgamation of the company with RHI India and RHI Clasil.
  • NLC India: The board approved raising up to Rs 5,000 crore via debentures.
  • CESC to be removed from futures and options segment with effect from May 29.
  • IFB Industries has commenced commercial production to manufacture split air-conditioners from its Goa plant with effect from March 17.
  • Alphageo received a contract worth Rs 76.67 crore for data services from Oil India.
  • Karur Vysya Bank has announced the launch of its precious metals business.
  • Electrotherm: Central Bank of India initiated insolvency proceedings against the company for dues of Rs 1059.59 crore.
  • VST Tillers: Power Tillers sales in February down 9 percent at 1,361 units and tractor sales down 3 percent at 564 units.
  • South Indian Bank reduced its base rate from 9.95 percent to 9.85 percent, with effect from March 20.
  • Reliance Jio got NCLT’s approval to transfer some liabilities to Reliance Industries.

Brokerage Radar

SBICAP On Aviation

  • Growth led by higher capacity unlikely to sustain
  • Base for Q4FY20 looks strong as those were early days of Jet's capacity absence
  • Expect weakness in yields to continue
  • Capacity reduction may start from this month to offset benefits of lower crude

SBICAP On Telecom

  • Telcos running out of options
  • Duopoly looks imminent
  • Staggered payments over 15 years and above may see Vodafone Idea surviving
  • Vodafone Idea needs significant tariff hikes and capital infusion to arrest market share decline

Edelweiss On Telecom

  • Self-assessment denial to escalate costs of operators
  • Government intervention can maintain industry structure
  • Deferred payment plan along with pricing discipline necessary and sufficient to ensure three-player telecom industry

Nomura On Motherson Sumi

  • Buy rating maintained
  • Price target of Rs 157
  • Well prepared to deal with Covid-19 crisis
  • U.S. operations remain on track
  • China plants have mostly returned to normalised levels
  • There is no liquidity concern at either company or promoter level
  • Global valuations have corrected a lot and according to management will make acquisitions attractive

Prabhudas Lilladher On Motherson Sumi

  • Upgrade to Buy from Accumulate
  • Price target cut to Rs 115 from Rs 153
  • Cut FY20/21/22 EPS estimates by 8, 18 and 11 percent respectively
  • Operations in China have recovered substantially
  • Significant correction presents opportunity to buy at attractive valuations

Morgan Stanley On MCX

  • Overweight rating maintained
  • Price target of Rs 1,600
  • Seeing higher average daily traded volume due to increased volatility
  • Expect strong revenue in the fourth quarter
  • Valuations are attractive

Edelweiss On Oil & Gas

  • Oil stocks bear the brunt of virus
  • Downstream gas relatively insulated
  • Cut price targets of OMCs as steady marketing margins to offset declines in volumes
  • Weak petchem margins for RIL should be partially buffered by relatively steady digital business
  • Cut price targets for City Gas Distributors as we lower CNG volume growth estimates

Bulk Deals

  • Cera Sanitaryware: Nalanda Equity Fund acquired 1.86 lakh shares (1.43 percent) at Rs 2308.47 per share.
  • Shree Cement: SBI Mutual Fund acquired 1.88 lakh shares (0.52 percent) at Rs 19325.67 per share.

Trading Tweaks

  • Nifty 50: Yes Bank to be excluded, Shree Cement to be included.
  • Nifty Bank: Yes Bank to be excluded, Bandhan Bank to included.
  • Granules India: Ex-date for share buyback
  • Move Into ASM Framework: Future Supply Chain Solutions, Intellect Design Arena, Ramco Systems, Spicejet, Magma Fincorp, HOEC, Future Retail
  • Move Into Short-Term ASM Framework: Jubilant Life, Majesco, GOCL Corporation, Mastek.
  • Out Of Short-Term ASM Framework: Indiabulls Ventures, Bajaj Hindusthan, Tasty Bite Eatables.
  • Price Band Revised To 10 Percent: Nippon Life India AMC, Shalby, CreditAccess Grameen, Arvind Fashions, HFCL, Surya Roshni, Rain Industries, Nelco, Phillips Carbon Black, IFB Agro, Nava Bharat Ventures, Subros, KEI Industries, Praj Industries, Balaji Amines, Strides Pharma, Welspun Enterprises, JBM Auto, IIFL Finance, IDFC, Edelweiss Financial, Prestige Estates, Skipper, Minda Cop, Quess Corp, PNB Housing, Jay Bharat Maruti and Shoppers Stop
  • Price Band Revised To 5 Percent: Future Retail, Kaya, ITDC, Future Supply Chain Solutions

Who’s Meeting Whom

  • MCX to meet Ostrum AMC, Samsung AMC, and Legatum on March 19.
  • Affle (India) to meet Karst Peak Capital on March 19.
  • Mahindra Logistics to meet Infina Finance and Steinberg India Advisors on March 19.

Insider Trading

  • Tata Investment Corporation promoter N Chandrasekaran acquired 10,000 shares on March 16.
  • Tata Chemicals, Tata Communication: N Chandrasekaran acquired 1 lakh shares each on March 16.
  • Tata Power director N Chandrasekaran acquired 2 lakh shares on March 16.
  • Bajaj Finance promoter Jamnalal Sons acquired 54,700 shares on March 16.
  • Bajaj Finserv promoter Jamnalal Sons acquired 41,000 shares on March 16.
  • Godrej Industries promoter Anamudi Real Estates LLP acquired 1.8 lakh shares between March 16-17.
  • JSW Steel promoter JTPM Metal Traders acquired 19.4 lakh shares from March 13-17.
  • NCC promoters acquired 1.22 lakh shares between March 13-16.
  • Great Eastern Shipping promoter Ravi Seth acquired 2 lakh shares from March 16-17.
  • Indian Hotels promoter Tata Sons acquired 2 crore shares between March 12-13.
  • Alembic promoter Nirayu acquired 4.27 lakh shares between March 16-17.
  • Nava Bharat Ventures promoters acquired 1 lakh shares on March 16.
  • Jindal Steel & Power promoter OPJ Trading acquired 1.5 lakh shares on March 16.
  • Welspun Enterprises promoter Balkrishna Goenka acquired 4.05 lakh shares on March 13.
  • GMR Infra promoter GMR Enterprises acquired 4.2 lakh shares from March 13-16.
  • Ashoka Buildcon promoter Ashish Ashok Katariya HUF acquired 1.09 lakh shares on March 16.

(As Reported On March 18)

Money Market Update

The rupee ended weaker at Rs 74.26 against the dollar on Wednesday versus Rs 74.21 against the dollar on Tuesday.

F&O Cues

Index Futures

  • Nifty March futures closed at 8433.7, a discount of 35 points.
  • Nifty March futures open interest fell 4 percent, shed 6.9 lakh shares in open interest.
  • Nifty Bank March futures closed at 20,517.9, a discount of 62 points versus 35 points
  • Nifty Bank March futures open interest rose 9 percent, added 1 lakh shares in open interest

Options

  • Nifty PCR at 0.95 versus 1.02 (Across all series)

Nifty: March 19 Expiry

  • Maximum Open Interest on Call side at 10,000 strike (17.6 lakh shares)
  • Maximum Open Interest on Put side at 8,100 strike (7.7 lakh shares)
  • 9,000 Call (9.4 lakh shares) and 8,800 Call (7 Lakh shares) see addition in open interest
  • 9,000 Put (4.9 lakh shares) and 8,100 Put (2 Lakh shares) see Open Interest Shedding

Nifty's Monthly Expiry

  • Maximum Open Interest On Call side at 12,000 strike (21.2 lakh shares)
  • Maximum Open Interest on Put side at 8,500 strike (20.2 lakh shares)
All You Need To Know Going Into Trade On March 19