All You Need To Know Going Into Trade On March 27
A dog stands with crows on the near-empty Marine Drive during a lockdown imposed due to the coronavirus in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On March 27

RBI Governor’s Address At 10 A.M.

Asian markets are edging higher on Friday morning after a third straight day of gains on Wall Street. Investors were encouraged by the passing of the $2 trillion stimulus package in the Congress.

The MSCI All Country World index is set for a 13 percent rise this week. The U.S. Dollar has stabilised after a three-day drop.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.76 percent to 8,823 as of 7:30 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

  • Markets in Japan and South Korea are advancing over 3 percent while Australian markets are up 2 percent.
  • The Dow Jones saw its biggest three-day advance in nine decades on Thursday. Dan Skelly of Morgan Stanley Wealth Management believes that equities are in the process of forming a bottom.
  • U.S. jobless claims surged to a record 3.28 million last week as businesses shut down to prevent the spread of the Coronavirus. Fed Chair Jerome Powell has assured that the central bank will not run out of ammunition to fight the crisis.
  • The U.S. has surpassed Italy in terms of the total Coronavirus cases and is poised to overtake China as well.
  • Yields on the 10-year treasury in the United States was flat at 0.83 percent.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On March 27

Stocks To Watch

  • HDFC Life: Promoter Standard Life to offer up to 5 crore shares in a price range of Rs 431 to Rs 448.8 per share. The offer consists of a base deal size of 3.5 crore shares with a greenshoe option of an additional 1.5 crore shares. Price range is a 6-10 percent discount to Thursday's closing price. BoFA Securities is the sole bookrunner on the offer.
  • Tata Motors: Moody's places the company's Ba3 corporate family rating and Ba3 senior unsecured debt rating under review for a downgrade. The outlook has been revised to 'ratings under review' from negative.
  • NTPC: Executed a share purchase agreement to acquire 100 percent stake in NEEPCO from the Government for Rs 4,000 crore. The Cabinet Committee on Economic Affairs, on November 21, had given an in-principle approval to the government’s proposal to divest stake in NEEPCO to NTPC along with transfer of management control.
  • Yes Bank: Looks to raise another Rs 5,000 crore in one or more tranches.
  • Balrampur Chini Mills: ICICI Bank invests Rs 51 crore in the company’s NBFC arm-Auxilo Finserve for 9.9 percent stake.
  • L&T Infotech: The company’s arm Syncordis bagged a new deal for digital banking solutions from Standard Chartered Bank.
  • GOCL Corporation: The board approved the issue of collateral security up to Rs 1,000 crore for loans sanctioned / to be sanctioned to Hinduja National Power Corporation by a bank.
  • ESAF Small Finance Bank: Gets SEBI approval for Rs 976 crore IPO.
  • Maharashtra Seamless: Has acquired an offshore drilling rig from the company’s Singapore associate company - Star Drilling for $100 million. The acquired rig is currently operating under contract with ONGC.

Covid-19 Impact

  • Arvind Fashions: The board has deferred the rights issue of the company.
  • United Spirits: To close down its office and manufacturing units till April 14.
  • Bajaj Group: Has committed Rs 100 crore for a fight against Covid-19 through various initiatives.
  • Aviation Stocks: The government extends the ban for international flights till April 14.
  • SAIL: Capacity utilization is likely to go down during the period of lockdown, as per a company statement.

Brokerage Radar

Jefferies On India Strategy

  • Underwhelming government stimulus
  • Hopefully stimulus announced was just part one
  • About 1/3rd of the stimulus appears to be reuse of existing funds
  • No formal announcement but the FM dropped hints that more might be likely going ahead.

Elara Securities On India Strategy

  • Stimulus aimed at alleviating the discomfort faced by bottom-of-pyramid households
  • Announcements appear more as a relief measure
  • Lot needs to be done to provide a real booster shot to the economy to tide over the current dislocation
  • PM Kisan Yojana benefits will not have any fiscal impact
  • Current economic situation warrants further action and broad-based stimulants

Jefferies On Indian Midcaps

  • See tepid H1FY21 with maximum impact of lockdown in Q1
  • Upgrade Finolex Cables to buy on favourable valuation and strong balance sheet
  • Top Picks: Supreme Industries, V-Guard and Kajaria Ceramics
  • Rationale for top picks: Domestic focus, robust market share, high B2C mix and sturdy RoE
  • All our stocks excluding UPL have strong balance sheets or zero debt-to-equity as cash is now king.

Edelweiss On Auto

  • Turn positive on the sector post the sharp correction in stocks
  • Current valuations price-in key risks of a protracted slowdown and subdued recovery
  • Structural long-term drivers remain intact
  • Upgraded To Buy: Hero Motocorp, Suprajit Engineering, CEAT and Minda Corp
  • Upgraded to Hold: Maruti Suzuki

Emkay On NTPC

  • Buy rating maintained
  • Price target of Rs 146
  • Deal is valued at 0.9x of the combined FY19 book value of two entities
  • Acquisition at current consideration is value-accretive
  • Operates a regulated business model and current slowdown in demand will not have much negative impact

Emkay On Auto

  • Wholesale volumes likely to be under pressure across segments
  • Festive season volumes severely impacted by lockdowns
  • Tractor volume growth trajectory turns negative
  • Weak dispatches in Passenger Vehicles
  • Performance of Two-Wheelers subdued
  • MHCV volumes likely to remain in the slow lane

Credit Suisse On Cement

  • Upgrade ACC to Outperform from Neutral and cut price target to Rs 1,450 from Rs 1,700
  • Upgrade Shree Cement to Neutral from Underperform and price target cut to Rs 18,500 from Rs 20,000
  • Upgrade due to demand resillience, tailwinds and valuations
  • See 70-75 percent impact on demand in April, 30 percent in Q1FY21 and 5 percent in FY21 due to the lockdown
  • Demand is discretionary and vulnerable to income cuts
  • Demand can be pent up and reflects in strong growth as normalcy returns

Bulk Deals

  • Indiabulls Housing Finance: Promoter Sameer Gehlaut acquired 23 lakh shares (0.54 percent) at Rs 96.56 per share.
  • Jindal Stainless (Hisar): Albula Investment acquired 38.82 lakh shares (1.76 percent) at Rs 35 per share and India Max Investment Fund sold 38.82 lakh shares (1.76 percent) at Rs 35 per share.
  • Apollo Pipes: Promoter Saket Agrawal sold 1.3 lakh shares (0.99 percent) at Rs 250 per share.
  • Apollo Tricoat Tubes: Promoter Shri Lakshmi Metal Udyog acquired 1.58 lakh shares (0.52 percent) at Rs 300.32 per share.
  • Just Dial: Goldman Sachs sold 3.6 lakh shares (0.56 percent) at Rs 281.2 per share.
  • GHCL: HDFC Bank sold 10.29 lakh shares (1.05 percent) at Rs 74.08 per share.
  • JSW Steel: Theleme Master Fund acquired 2.85 crore shares (1.18 percent) at Rs 153.8 per share and Morgan Stanley (France) sold 2.19 crore shares (0.91 percent) at Rs 153.8 per share.

Who’s Meeting Whom

  • Info Edge to meet CLSA on March 30
  • Mahindra Logistics to meet Ashmore Investments on March 27

Trading Tweaks

  • Record Date For Demerger: Sharda Motors
  • Enters F&O Segment From Today: Godrej Properties
  • Price Band Revised To 10 Percent From 20 Percent: Indian Terrain Fashions, Shriram City Union Finance.
  • Move Into ASM Framework: JMC Projects, MAS Financial Services, IIFL Finance, Lemon Tree, KRBL, Heritage Foods, Ujjivan Small Finance Bank, Future Enterprises, Repco Home Financce, Jubilant Life.
  • Move Into Short-term ASM Framework: Asahi Songwon, Symphony, Brigade Enterprises, Prism Johnson, HEG, KEC International, GATI and Spandana Sphoorty.

Insider Trading

  • Godrej Industries: Promoter Anamudi Real Estates acquired 4 lakh shares between March 23-25.
  • Adani Ports & SEZ: Promoter Flourishing Trade acquired 35.61 lakh shares on March 25
  • JSW Steel: Promoter JTPM Metal Traders acquired 20.7 lakh shares between March 23-24
  • Great Eastern Shipping: Promoter Ravi Seth acquired 1.32 lakh shares between March 23-24.
  • Jamna Auto: Promoter Map Auto acquired 54,550 shares between March 24-25.

(As Reported On March 26)

Money Market Update

  • The rupee ended stronger at 75.16 against the U.S. dollar on Thursday as compared to 76.07 against the dollar on Tuesday.

F&O Cues

Index Futures

  • Nifty April futures closed at 8,677, a premium of 35.8 points
  • Nifty futures Open Interest up 8 percent across series and add 13.4 lakh shares in open interest
  • Nifty Bank April futures closed at 19,338.9, a discount of 275 points
  • Nifty Bank futures Open Interest up 9 percent across series and adds 1.2 lakh shares in open interest
  • Nifty rollovers stood at 62 percent while Nifty Bank rollovers were at 55 percent.

Options

  • Nifty Put-Call Ratio at 1.42 Vs 1.22 across all series.

Nifty weekly Expiry: April 1

  • Maximum Open Interest on Call side at 9,000 strike (6.8 lakh shares)
  • Maximum Open Interest on Put side at 8,000 strike (7.4 lakh shares)
  • 8,500 Put (6.6 lakh shares), 12,000 Call (6 lakh shares) and 8,000 Put (4.9 lakh shares see Open Interest addition.

Nifty Monthly Expiry: April 30

  • Maximum Open Interest on Call side at 9,000 strike (12.4 lakh shares)
  • Maximum Open Interest on Put side at 8,000 strike (16.8 lakh shares)
All You Need To Know Going Into Trade On March 27
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