All You Need To Know Going Into Trade On March 23
Vehicles travel along the near deserted New Pantai Expressway near Kuala Lumpur, Malaysia. (Photographer: Samsul Said/Bloomberg)

All You Need To Know Going Into Trade On March 23

U.S. stock futures tumbled in early Monday trading as the death toll from the Coronavirus continued to rise globally. Sentiment is also soured by the failure of the Congress to agree to a relief package.

S&P 500 futures fell 5 percent to a lower circuit while the Dow futures trade lower by as much as 850 points as of 6:30 a.m. Equities in Australia fell as much as 8 percent, while those in Japan fluctuated.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 10.6 percent to 7,826 as of 6:40 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

  • U.S. Markets posted heavy losses on Friday, to cap their worst week since the global financial crisis of 2008.
  • The S&P 500 fell 15 percent last week, to end at its lowest level in three years.
  • The European Union has said that the recession this year may be as bad as the one in 2009.
  • Goldman Sachs has warned that the U.S. economy may shrink 24 percent on an annualised basis in the second quarter
  • Yield on the 10-year treasury in the United States fell back below 1 percent.
  • Oil fell further to take its weekly decline to 29 percent - the worst since 1991 while Gold prices edged higher.
  • St. Louis Fed President James Bullard predicted that the U.S. unemployment rate may hit 30 percent in the second quarter due to shutdowns to combat the virus.

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All You Need To Know Going Into Trade On March 23

Stocks To Watch

  • Escorts: Kubota Corporation, a tractor and machinery manufacturer from Japan, will acquire a 10 percent equity stake, on a post capital reduction basis, in the company. Escorts will issue and allot 1.22 crore equity shares through a preferential issue to Kubota at an issue price of Rs 850 per equity share, subject to approvals from regulators and shareholders.
  • SBI: To open ad-hoc credit facilities for MSME borrowers impacted by Covid-19. Borrowers will be allowed access to loans up to Rs 200 crore under this facility, for a period of 12 months at a rate of 7.25 percent.
  • Ashok Leyland: Board says it will now acquire 6.99 percent stake in Hinduja Leyland Finance Ltd. from the previous 19 percent, after considering feedback from minority shareholders. The company had earlier planned to invest Rs 1,200 crore in the unit by acquiring shares in tranches, leading to a nearly 30 percent fall in price on March 19.
  • Pokarna: To temporarily suspend production operations till March 31.
  • Sandhar Technologies: To shut down temporary production in its units in Haryana, Rajasthan, Maharashtra and Uttarakhand. The corporate office too will be shut till March 31.
  • Shree Cement: Undertaking measures to shut all plants in Rajasthan till March 31.
  • Whirlpool Of India: To suspend manufacturing operations at its Faridabad and Pune units with immediate effect till March 31.
  • Birla Corporation: The Rajasthan power plant will be shut till March 31 while the cement plant in West Bengal too will be shut till March 27. Sales are expected to be affected due to the lockdown in various districts.
  • Sundaram Clayton: To shut operations at all its manufacturing facilities and offices for two days effective March 23, 2020.
  • Titan: To shut all manufacturing facilities for one week starting March 23. To shut all retail stores across all brands till March 29.
  • Future Retail: Most of the stores in most of the states are closed except those selling only essential commodities and grocery items. The said stores will operate till the time permitted by the respective local authorities.
  • Yes Bank: The RBI has appointed former Reserve Bank of India deputy governor R Gandhi and Ananth Narayan Gopalakrishnan, Associate Professor at SP Jain Institute of Management and Research as additional directors with effect from March 26, for a period of two years.
  • Eicher Motors: Royal Enfield has successfully cleared all existing inventory of BS-IV motorcycles across channels and dealerships All Royal Enfield stores will sell only BS-VI compliant motorcycles starting March 21.
  • InfoEdge: Acquired 37.9 percent stake in alumni management platform Univariety for Rs 8 crore and 16.9 percent stake in pharmaceutical platform Medcords for Rs 7 crore.
  • Lupin: Launched Betamethasone Dipropionate Ointment USP, which is used for skin treatment.
  • Welspun Corp: One of the orders planned from its U.S. facility has been deferred. The customer has communicated that owing to the unprecedented energy environment, execution of this order of 159 KMT slated for FY20-21 will be deferred for a period of 9 months.
  • Zee Entertainment: Aparajita Jain and Surinder Singh resign as independent directors, with effect from March 20.
  • IFCI: The Government has sanctioned a release of Rs 200 crore to the company towards a subscription to share capital during the current financial year.
  • GMR Infra: MIHAN India - the concession-granting authority for the development of Nagpur Airport has annulled the bidding process for the modernization, operation, upgrading, and maintenance of Nagpur Airport, previously awarded to the GMR Airports. Group has initiated appropriate legal action with this regard.
  • IPCA Labs: The U.S. FDA makes an exception to the company's import alert due to the Covid-19 outbreak and the shortage of certain drugs and finished products. Exceptions are for the company's Hydroxychloroquine (HCQs) and Chloroquine Phosphate APIs produced at the company's API manufacturing unit in Ratlam and HCQ tablets produced at its manufacturing units in Indore, Pithampur and Silvassa.
  • Graphite India: The local management of its wholly-owned subsidiary in Germany has decided to gradually and completely shut down production starting March 23. The closure would be in place till April 13.
  • Adani Green Energy: Approved a draft of a joint venture agreement to be entered into with TOTAL Solar Singapore PTE Ltd. and Adani Green Energy Twenty Three Ltd. The JV Company, which is presently a wholly-owned subsidiary of the company, is proposed to house 2,148 MWac of operating solar power projects, presently being owned by the Company through its direct wholly-owned subsidiaries or step down subsidiaries.
  • Dalmia Bharat: Approves a share buyback worth Rs 500 crore through an open market mechanism. The maximum buyback price is placed at Rs 700 per share, a 36 percent premium to Friday's closing price. The total outflow on completion of the buyback is estimated at nearly Rs 620 crore.
  • Emami: Board approves a buyback worth Rs 192 crore at a price of Rs 300 per share, a 63 percent premium to Friday's closing price.
  • Ramkrishna Forgings: Board approved a buyback for up to Rs 40 crore at a price of Rs 250 per share, a 48 percent premium to Friday’s closing price.
  • IOL Chemicals: Has pre-paid Rs 63.93 crore against balance outstanding term loans of the company. It has pre-paid the term loan aggregating Rs 225.37 crore to date.
  • Magma Fincorp: Approved an investment up to a sum of Rs 100 Crores in the Equity Share Capital of Magma Housing Finance Ltd., a wholly-owned subsidiary, to augment its lending business.
  • L&T Finance: Agreement about the proposed equity investment by an external party in one of its subsidiaries - L&T Infra Debt Fund Ltd., stands terminated due to the expiry of the long stop date.
  • Max India: Board of Directors of the company have considered and approved a proposal for further investment of up to Rs 115 Crore, in Antara Senior Living Ltd., a wholly-owned material subsidiary by subscribing to its Compulsorily Convertible Preference Shares in one or more tranches to meet its funding / business expansion proposals.
  • Reliance Communication Infrastructure: NCLT extends insolvency resolution period by 90 days.
  • Ruchi Soya: NCLT stays Bihar tax department's attachment order to recover tax dues.

Automakers, Ancillaries Respond To Covid-19 Outbreak

  • Maruti Suzuki: To suspend production at its manufacturing facilities in Manesar and Gurugram. The R&D centre at Rohtak will also remain closed.
  • Hero MotoCorp: To suspend production at all of its facilities in India, Columbia and Bangladesh and its global parts centre in Neemrana. Employees at the Centre of Innovation and Technology in Jaipur will continue to work from home.
  • Mahindra & Mahindra: Has suspended manufacturing operations at its Nagpur facility. It will also stop production at its units in Chakan and Mumbai from Monday night onwards.
  • Escorts: Closed down offices and plants in Faridabad till March 31.
  • SML Isuzu: To suspend production at its manufacturing plant in Punjab till March 31.
  • Lumax Industries: To temporarily shut all manufacturing facilities across India till further notice. Duration of the shutdown will depend on further directions from the Government.
  • TVS Motor: To shut operations at all its manufacturing facilities and offices for two days effective March 23.
  • Eicher Motors: Royal Enfield will suspend all operations globally till March 31. This includes company offices and company-owned dealerships. Employees will continue to work from home and there will be no salary deduction. There will also be no reduction of any workforce.
  • JTEKT India: Company will shut its offices and operations at its facilities in Gurugram, Dharuhera and Bawal with immediate effect till further notice. Duration of the shutdown will depend on further directions from the Government.
  • GNA Axles: To shut all manufacturing facilities in Punjab including all offices till March 31.
  • Minda Industries: To suspend manufacturing operations in North India, Rajasthan and Maharashtra till further notice. Production volumes in Spain, Mexico and ASEAN have been significantly impacted.

Brokerage Radar

Emkay On Escorts

  • Buy rating maintained
  • Price target cut to Rs 954 from Rs 1,000
  • Kubota partnership to open new opportunities in medium-term
  • Management sees revenue potential of 3x of investments over medium-term
  • Outlook for tractor industry in FY21 is positive
  • Channel checks suggest that Covid-19 outbreak can be a risk if it persists

HSBC On India Oil & Gas

  • Earnings outlook appears materially deteriorated amid sharp fall in both oil & natural gas prices
  • ONGC's interim dividend announcement appears brave
  • Sustainability of dividends requires recovery in oil prices

HSBC On ONGC

  • Downgrades to hold from buy
  • Price target cut to Rs 70 from Rs 150

HSBC On Oil India

  • Downgrade to hold from buy
  • Price target cut to Rs 90 from Rs 180

Morgan Stanley On Cadila Healthcare

  • Overweight rating maintained
  • Price target of Rs 304
  • Business operations are more or less normal
  • Multi-fold API scale-up for Chloroquine is underway
  • Not looking to use pricing levers and focus remains on expanding volumes

SBICAP Securities On ITC

  • Upgrade to buy from hold
  • Price target cut to Rs 210 from Rs 235
  • Expect new dividend policy to boost sentiment
  • Sustained diversification should fructify when the economy recovers
  • Raised prices for 70 percent of the portfolio
  • Quantum of price hikes to be sufficient to absorb tax increases

Jefferies On NTPC

  • Buy rating maintained
  • Price target of Rs 160
  • Operations not seeing any disruption as most plants in isolated locations
  • Tariffs were not reduced even during Global Financial Crisis and regulated RoE remained unchanged
  • Well stocked for any potential coal mine disruption of 2-3 weeks

Bulk Deals

  • Indiabulls Housing Finance: Promoter Sameer Gehlaut acquired 35 lakh shares (0.83 percent) at Rs 98.56 per share.
  • Thermax: Nalanda India Fund acquired 11.28 lakh shares (0.95 percent) at Rs 689.84 per share
  • Veto Switchgear Cable: Maven India Fund acquired 1.68 lakh shares (0.88 percent) at Rs 29.32 per share
  • BEML: Abu Dhabi Investment Authority sold 2.69 lakh shares (0.65 percent) at Rs 483.55 per share

Trading Tweaks

  • Syndicate Bank, Allahabad Bank, Andhra Bank, Corporation Bank: Record date for amalgamation.
  • Oriental Bank of Commerce, United Bank of India: Ex-date for amalgamation.
  • Price Band Revised To 5 Percent From 10 Percent: General Insurance Corporation of India
  • Price Band Revised To 10 Percent From 20 Percent: Filatex India, Genus Power Infra, HCC, Majesco, Sonata Software, Zuari Global.
  • Price Band Revised To 20 Percent From 5 Percent: Borosil Renewables
  • Move Into ASM Framework: Sharda Cropchem, Delta Corp, Tejas Networks, Reliance Naval.
  • Move Out Of ASM Framework: Vikas Proppant & Granite, Indiabulls Integrated Services.
  • Move Into Short-Term ASM Framework: AU Small Finance Bank, Quess Corp, Music Broadcast, Future Lifestyle Fashions, MAS Financial Services.

Insider Trading

  • JK Lakshmi Cement: Promoters acquired 50,000 shares between March 16-17.
  • Thirumalai Chemicals: Promoter Parthasarathy acquired 62,500 shares on March 19.
  • Nava Bharat Ventures: Promoters acquired 1.27 lakh shares between March 18-19.
  • Astra Microwave Products: Promoters acquired 1.04 lakh shares between March 16-19.
  • Hubtown: Promoter Khilen Shah acquired 1.03 lakh shares between March 18-19.
  • Sadbhav Infrastructure Project: Promoter Sadbhav Engineering acquired 2.37 lakh shares between March 18-19.

(As Reported On March 20)

Money Market Update

  • The rupee ended weaker at Rs 75.21 against the U.S. dollar on Friday versus Rs 75.07 on Thursday.

F&O Cues

Index Futures

  • Nifty March futures closed at 8,723, a discount of 22.3 points.
  • Nifty March futures open interest up 1 percent, adds 1.1 lakh shares in open interest.
  • Nifty Bank March futures closed at 20,294.3, a discount of 23 points versus 62 points.
  • Nifty Bank March futures open interest rose 1.6 percent, added 17,000 shares in open interest.

Options

  • Nifty Put-Call Ratio at 1.18 versus 1.14 (across all series)

Nifty Monthly Expiry: March 26

  • Maximum Open Interest on Call side at 12,000 strike (21.6 lakh shares)
  • Maximum Open Interest on Put side at 8,500 strike (20.1 lakh shares)
  • 8,000 Put (9 lakh shares), 7,000 Put (8.9 lakh shares) and 8,500 Put (3.7 lakh shares) see addition in open interest.

Securities In F&O Ban

  • Yes Bank
  • Adani Enterprises
  • Indiabulls Housing
  • Vodafone Idea
  • Jindal Steel & Power
  • Just Dial
  • NCC
  • Punjab National Bank
  • PVR
All You Need To Know Going Into Trade On March 23
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