All You Need To Know Going Into Trade On March 31  
Fishing boats and other vessels ferrying goods move along the Ganges river at sunrise in Kanpur, Uttar Pradesh, India. (Photographer: Udit Kulshrestha/Bloomberg)

All You Need To Know Going Into Trade On March 31  

Global equity markets are on track to post their worst quarterly performance since the last three months of 2008 as they continue to grapple with the economic impact of the Covid-19.

Asian markets have opened mixed on Tuesday morning despite a strong day of trade in the U.S. The U.S. dollar is holding on to gains against peers while gold is declining.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 1.7 percent to 8,491 as of 6:55 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 Australia and South Korea have opened with gains while Japanese equities are declining for the second day in a row.
  • Futures on the S&P 500 are edging higher after the index climbed for the fourth time in five sessions.
  • Shares of Johnson and Johnson gained after it pledged a $1 billion-plus effort with the U.S. government to make a vaccine against Covid-19. Abbott Laboratories surged after unveiling a five-minute Covid-19 test.
  • Yields on the 10-year treasury in the U.S. fell two basis points to 0.71 percent.
  • West Texas Intermediate crude is up 2.6 percent to $20.61 per barrel, after falling 6 percent on Monday.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On March 31  

Covid-19 Impact

  • Jubilant Lifesciences: Bloomberg News reports that some employees at its Mysore unit have been found Covid-19 positive. The plant has been shut for sanitisation and workers have been self-quarantined.
  • Hero Group: Pledged Rs 100 Crore for the ongoing Covid-19 relief-efforts in India. Half of this sum, Rs 50 Crore, will be contributed to the PM-CARES fund and the remaining Rs 50 crore will be spent in other relief efforts.
  • Bharti Airtel: Extended the pre-paid pack validity for over 80 million customers till April 17. All these customers will continue to get incoming calls on their Airtel mobile numbers even after the validity of their plan is exhausted. The company will also credit an additional talk time of Rs 10 to these customers.
  • HPCL: Bloomberg News reports that the company has issued force majeure on Iraq’s oil marketing company.
  • Reliance Industries: Announced Rs 500 Crore contribution to PM-CARES fund.
  • Infosys Foundation: Committed Rs 100 crore towards Covid-19 relief efforts, out of which Rs 50 crore has been earmarked for PM-CARES fund.

Stocks To Watch

  • IndusInd Bank: In an investor concall on Monday, the lender informed that it has seen a withdrawal of 10-11 percent of its deposits, largely led by a state government. Wholesale and retail deposits too saw a decline. The lender said it has replaced the outflows via various means such as long duration refinance / forex borrowings swapped to the Indian Rupee. The lender also said that the moratorium granted by the RBI should help its portfolio in various segments.
  • Adani Transmission and Tata Power: The Government of Maharashtra announced on Monday that electricity tariff will be cut by an average of 8 percent for the next five years to help businesses and people tide over the Covid-19 crisis.
  • SBI: Considering extending the loan repayment moratorium to all term loans extended by the bank. The bank will conduct a special communication campaign to explain to borrowers the specifics of the moratorium. SBI will seek that borrowers who are capable of paying should reach out to the bank and repay regularly. Bank’s board will meet in early-April to finalize the implementation of the moratorium. That is a BloombergQuint Exclusive.
  • Reliance Industries: To consider fund raising via NCDs on April 2.
  • Heidelberg Cement: De-bottlenecking projects at Imlai and Jhansi plants have been duly completed and the grinding capacity of these plants has been enhanced to 6.26 million tons per annum.
  • Britannia: Despite products being essential, operations have been disrupted due to the lockdown. The company said that it is taking all necessary steps to restore operation of factories.
  • Suzlon Energy: Lenders led by State Bank of India have approved a resolution plan of the company and its certain identified subsidiaries.
  • Wockhardt: Extended the date of redemption of 16 crore preference shares till March 2021.
  • Aster DM Healthcare: Sold its loss-making pharmacies in Kuwait for 4,83,000 Kuwaiti Dinar.
  • Federal Bank: The board approved an investment of Rs 148 crore in its arm Fedbank Financial Services through a rights issue, to infuse regulatory capital.
  • Fortis Healthcare: ICRA has upgraded the company’s long-term rating to ICRA A- from ICRA BBB+. Short-term rating has been upgraded to ICRA A1 from ICRA A2. Both ratings are on watch with developing implications.
  • Bharti Infratel: Re-appointed DS Rawat as Managing Director and Chief Executive Officer till September 30, or up till next ensuing annual general meeting of the company, whichever is earlier.
  • Indian Bank: Revised rates across various tenors with effect from April 1. Base rate reduced from 9.45 percent to 9.15 percent. The benchmark prime lending rate was reduced from 14.2 percent to 13.4 percent. These rates will be effective after the merger with Allahabad Bank.

Brokerage Radar

Motilal Oswal On Bharti Airtel

  • Buy rating maintained
  • Price target of Rs 620
  • Incremental ARPU growth opportunity not captured
  • Covid-19 to have limited impact on earnings
  • Expect strong rise in ARPU or market share

Morgan Stanley On Lupin

  • Overweight rating maintained
  • Price target of Rs 948
  • gFostair facility cleared by European Union
  • Addressable brand size estimated around 700 million Euros
  • Assuming 60-65 percent price drop and 25-30 percent market share, estimate this to be sales worth 50-60 million Euros with high margins.

Morgan Stanley On Autos

  • Low earnings visibility but value is emerging
  • Covid-19 outbreak can delay an Auto cycle recovery
  • Expect volume decline across all segments in FY21
  • Upgrade Bajaj Auto to Overweight; cut price target to Rs 2,807 from Rs 3,039
  • Downgrade Bharat Forge to Underweight; Cut price target to Rs 283 from Rs 401

Morgan Stanley On Financials

  • Expect banks to reduce deposit/lending rates
  • Lower rates with slower growth will impact margins across banks
  • A potential partial offset can be the lower savings deposit rates
  • The medium-term outlook is strong until NPLs rise

HSBC On NTPC

  • Buy rating maintained
  • Price target of Rs 155
  • Acquisitions of NEEPCO and THDC fairly priced
  • Expect units to support growth for consolidated portfolio

Jefferies On Just Dial

  • Upgrade to buy from underperform
  • Price target cut to Rs 430 from Rs 500
  • Reasonably robust business
  • Higher growth in tier-2, tier-3 cities with high free cashflow generation
  • Rs 235 per share of cash on balance sheet
  • Cutting EPS estimates to reflect Covid-19 impact
  • Upgrade on compelling valuations and favourable risk-reward

Emkay On IndusInd Bank

  • Buy rating maintained
  • Price target cut to Rs 630 from Rs 1,725
  • New MD & CEO reiterated his long-term stance of retailisation of assets, liabilities
  • Institutional deposits ran down post Yes Bank issue, replaced with CDs, borrowings
  • Plans to adopt calibrated growth approach in near to medium-term

Bulk Deals

  • Jain Irrigation Systems: Avtar Investments acquired 28.9 lakh shares (0.58 percent) at Rs 3.23 per share and Vanguard Group sold 35.3 lakh shares (0.71 percent) at Rs 3.23 per share.
  • Cerebra Integrated Technologies: Societe General sold 8.45 lakh shares (0.7 percent) at Rs 18.5 per share.
  • Rajapalayam Mills: Morgan Stanley Asia acquired 87,000 shares (1.18 percent) at Rs 458.05 per share and Metrica Asia Event Driven Master Fund sold 87,000 shares (1.18 percent) at Rs 458 per share.
  • Teamlease Services: Enam Investment Services sold 99,152 shares (0.58 percent) at Rs 1,495 per share.

Who’s Meeting Whom

  • EIH: To meet Sundaram AMC on April 1
  • Mahindra Logistics: To meet Stewart Investors, Motilal Oswal MF and other investors on March 31.

Trading Tweaks

  • Moves Out Of Short-term ASM Framework: Greenlam Industries
  • Move Into Short-term ASM Framework: Unichem Laboratories, Indian Terrain Fashions
  • Move Into ASM Framework: MEP Infra, Bajaj Hindusthan
  • Price Band Revised To 5 Percent From 10 Percent: ADF Foods, Balrampur Chini, IFB Agro, V2 Retail, Venky's.

Insider Trading

  • Godrej Industries: Promoter Anamudi Real Estates acquired 3 lakh shares between March 26-27.
  • HFCL: Promoter Mahendra Nahata acquired 4.15 lakh shares on March 30.
  • JSW Steel: Promoter JTPM Metal Traders acquired 9.35 lakh shares between March 26-27
  • India Cements: Promoter Anna Investments acquired 1.3 lakh shares between March 26-27.
  • Gateway Distriparks: Promoter Perfect Communications acquired 1.2 lakh shares between March 26-27.

(As Reported On March 30)

Money Market Update

  • The currency snapped a three-day gaining streak on Monday, ending a 75.42 against the U.S. dollar as compared to Friday's close of 74.92.

F&O Cues

Index Futures

  • Nifty April futures closed at 8,290, a premium of 9 points versus a discount of 9 points.
  • Nifty April futures Open Interest rose 7 percent, added 6.3 lakh shares.
  • Nifty Bank April futures closed at 18,799.5, a premium of 17 points versus a discount of 190 points.
  • Nifty Bank April futures open interest rose 3 percent, added 24,900 shares.

Options

  • Nifty Put-Call Ratio at 1.10 versus 1.23 across all series.

Nifty Weekly Expiry: April 1

  • Maximum Open Interest on Call side at 10,000 strike (17.7 lakh shares)
  • Maximum Open Interest on Put side at 7,000 (10.9 lakh shares)
  • 9,000 Call (6.2 lakh shares), 10,000 Call (4 lakh shares) and 8,700 Call (3.6 lakh shares) see addition in open interest.
  • Open Interest shedding seen in 8,500 Put (-2 lakh shares)

Nifty Monthly Expiry: April 30

  • Maximum Open Interest on Call side at 9,000 strike (14.5 lakh shares)
  • Maximum Open Interest on Put side at 8,000 strike (18 lakh shares)
All You Need To Know Going Into Trade On March 31  
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