All You Need To Know Going Into Trade On March 4

U.S. stock futures retraced a slice of Tuesday’s sharp decline, and the yen dipped as investors took in early Super Tuesday election results in the U.S. alongside the Federal Reserve’s emergency interest-rate cut.

Asian stocks were mixed, with Japan and Hong Kong flat, Korea up, and China and Australia down. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 11,271 as of 6:45 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. stocks tumbled and Treasuries surged as investors worried the Federal Reserve’s emergency cut won’t be enough to combat the economic impact of the coronavirus.
• Besides, early wins by Joe Biden lessened the chance of the Bernie Sanders nomination that had unsettled some investors.
• The two-year Treasury yield sunk to 0.70 percent, while the 10-year plunged below 1 percent for the first time ever.
• Oil advanced for a second day after an OPEC+ committee recommended a larger supply cut to offset lost demand from the spread of the coronavirus. Gold was little changed at $1,642 an ounce.

Get your daily fix of global markets here.

Key Events/Data To Watch

• Markit India services and composite PMIs for February to be released.
• Supreme Court will give its verdict on RBI’s cryptocurrency curbs and will also hear the case on Delhi riots.

Offerings

• Antony Waste Handling Cell has raised Rs. 60.94 crore from 3 Anchor Investors-Massachusetts Institute of Technology, Vantage Equity Fund and 238 Plan Associates LLC
• SBI Cards and Payment Services IPO subscribed 0.87 times. Retail investors subscribed 1.21 times.

Brokerage Radar

Morgan Stanley on Reliance Industries

• Maintained ‘Overweight’ with a price target of Rs 1,753.
• Chemicals margins are outperforming refining margins for RIL.
• Cheap feedstock and supply rationalisation support chemical margins.
• Refining is seeing tailwinds of lower crude prices and weakness in jet fuel demand.

Emkay on Bharat Forge

• Maintained ‘Buy’ with a price target at Rs 550.
• FY21 is expected to be a year of revenue recovery; FY22 could be the year of revenue upsurge.
• Expect earnings to fall 34 percent in FY20, and recover at 21 percent CAGR over FY20-22.
• Significant growth potential for nascent segments – Defense, Aerospace and Railways – remains.

HSBC on Phoenix Mills

• Maintained ‘Buy’; hiked price target to Rs 1,100 from Rs 1,000.
• Positive: consumption grows steadily, renewals up-tick, new mall pre-leasing satisfactory and new tenant pipeline strong.
• Expect significant renewals over next 3 years; new area addition to drive next leg of rental growth.

Investec on Aditya Birla Capital

• Initiated ‘Buy’ with a price target at Rs 135.
• Derive comfort from its strong risk management, low cost of funds and professional management.
• RoE expansion in lending subs is key to value creation over the medium term.
• Expect consolidated net profit to grow 27 percent CAGR and RoE to cross 13 percent by FY23.
• Current valuation provides a high margin of safety.

Axis Capital on Hero Moto

• Upgraded to ‘Buy’ from ‘Reduce’; maintained price target at Rs 2,530.
• Believe market share concerns are overplayed; valuations cheap and risk-reward favourable.
• Hero can benefit from potential recovery in rural markets.
• Two-wheeler industry outlook – flattish volumes in FY21; recovery in FY22.

IIFL on India Strategy

• Reasonable to assume a demand hit in India due to Corona virus.
• Supply-chain disruptions may last for some time.
• Stretched government fiscal will limit stimulus.
• Continue to favour quality names with strong turnarounds and avoid cyclicals.
• Picks:- Bharti Airtel, Hindustan Unilever, ICICI Bank, ICICI Lombard, Power Grid, SBI Life, Deepak Nitrite, Gujarat Gas and Navin Flourine.

CLSA on PVR

• Maintained ‘Buy’ with a price target of Rs 2,350.
• Synergy benefits from SPI playing out well.
• Acquisition was at significant premium; synergy benefits imply 8.6 years payback vs 5 years for organic expansion.
• Strategic fit justifies longer payback period.

Bulk Deals

• Cera Sanitaryware: Nalanda India Equity Fund acquired 3.13 lakh shares (2.41 percent) at Rs 2498.79 each
• Narayana Hrudayalaya: CDC Group sold 72.51 lakh shares (3.55 percent) at Rs 320.29 each
• Best Agrolife: Resonance Opportunities Fund acquired 1.5 lakh shares (1.88 percent) at Rs 240 each

Pledged Share Details

• Adani Green Energy promoter Adani Trading Services created pledge of 1.8cr shares from Feb. 26-28
• JSW Steel promoter Sahyog Holdings created pledge of 11.2 lakh shares on Feb. 26
• DB Corp promoter DB Consolidated created pledge of 26 lakh shares on Feb. 28
• Future Consumer promoter Future Consumer Enterprises Employees Welfare Trust created pledge of 1.1cr shares on Feb. 29

(As Reported On March 3)

Trading Tweaks

• Tata Chemicals ex-date for demerger
• Suven Life Sciences, DQ Entertainment (International) to move into ASM Framework
• FCS Software Solutions, Sadbhav Infrastructure Project to move into short term ASM Framework
• Subex to move out of short term ASM Framework
• Pricol, Automotive Stampings and Assemblies price band revised to 10 percent
• Sterling and Wilson Solar price band revised to 5 percent

Who’s Meeting Whom

• Dr. Lal Pathlabs to meet Dron Capital on March 4
• Heidelberg Cement to meet Pine Bridge India on March 4
• Shriram City Union Finance to meet Motilal Oswal Financial Services on March 4
• Prince Pipes and Fittings to meet Bank of America Corporation on March 4
• Tata Steel to meet Premji Invest on March 4

Insider Trading

• Sun Pharma promoter Shanghvi Finance acquired 19.8 lakh shares on March 3
• Filatex India promoter Gunjan Bhageria acquired 1.5 lakh shares on Feb. 28
• LT Foods promoter Raghuvesh Holdings acquired 1 lakh shares on March 2
• V2 Retail promoter V2 Conglomerate acquired 53,000 shares on Feb. 28
• Bajaj Auto promoter Jamnalal Sons acquired 1.07 lakh shares on March 2
• IDFC First Bank promoter IDFC Financial Holding acquired 80 lakh shares on March 2

Money Market Update

Indian bonds are likely to rally after the US Federal Reserve’s emergency rate cut and comments by the RBI governor that there was room to cut interest rates.

The options for India include a rate cut and liquidity measures to support the market, Governor Das said in an interview with Bloomberg News

In the currency market, the implied openings from forwards suggest that the rupee could start trading around 73.06 against the U.S. dollar. Currency traders will watch out for composite PMI data, that’s due at 10:30 a.m.

F&O Cues

Futures

• Nifty March futures closed at 11,294.7, discount of 8.5 points versus 9 points
• Nifty March futures open interest up 3.4 percent, adds 4.6lk shares in open interest
• Nifty Bank March futures closed at 29,223.7, premium of 46.7 points versus 16.7 points
• Nifty Bank March futures open interest up 4.6 percent, adds 53,000 shares in open interest

Options

• Nifty PCR at 1.20 versus 1.13 (across all series)

Nifty weekly Expiry: March 5

• Max open interest on call side at 11,600 (19 lakh shares)
• Max open interest on put side at 11,000 (17.7 lakh shares)
• open interest addition seen in 11,200P (+5.2 lakh shares), 11,100P (+3.1 lakh shares)

Nifty Monthly Expiry: March 26

• Max open interest on call side at 12,000 (25 lakh shares)
• Max open interest on put side at 11,000 (25.2 lakh shares)