All You Need To Know Going Into Trade On November 10

Asian markets are edging higher this morning, amidst promising results from a large-scale Covid-19 vaccine study.

Shares in Japan and Australia are advancing while those in South Korea are little changed.

However, concerns about a smaller U.S. fiscal stimulus package, surging Covid-19 cases and legal challenges to the U.S. election outcome continue to crimp the outlook.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 1.5% to 12,687 as of 7:05 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.

Let’s take a look at the factors that may influence equities in today’s session:

• Futures on the Dow Jones are trading little changed. The index closed 3% higher on Monday. The S&P 500 ended at a two-month high on Monday.
• The top infectious disease expert in the U.S., Anthony Fauci, said the shot being developed by Pfizer will have a “major impact” on everything we do with regards to Covid-19 going forward.
• The U.S. Federal Reserve warned that asset prices in key markets could take a hit if the coronavirus pandemic’s economic impact worsens in coming months.
• Yield on the 10-year treasuries fell to 0.91% - their highest since March. U.S. junk-bond yields fell to a record low.
• West Texas Intermediate crude fell 1.6% to $39.67 per barrel, paring some of Monday's gains.

Get your daily fix of the global markets here.

Stocks To Watch

• Pfizer: Early findings showed the vaccine being developed by the company and BioNTech SE protects most people from Covid-19. The shot prevented more than 90% of symptomatic infections in the trial of tens of thousands of volunteers, the most encouraging scientific advance so far in the battle against the coronavirus.
• HDFC: Has reduced its retail prime lending rate on housing loans, on which its adjustable rate home loans are benchmarked, by 10 basis points, from November 10. The change is applicable to all existing HDFC retail home loan customers.
• Tata Steel: Signs MoU to procure their complete domestic zinc requirements from Hindustan Zinc. The undertaking involves around 45 KT of Zinc and other value-added metals. Hindustan Zinc will cater to demands of both Tata Steel & Tata Steel BSL.
• Crompton Greaves Consumer Electricals: Two of the biggest shareholders plan to sell close to 3.83 crore shares in a placement, as per terms of the deal obtained by Bloomberg News. Amalfiaco is selling up to 2.51 crore shares with an option to upsize while Macritchie Investments plans to sell 1.32 crore shares with an option to upsize. The floor price for the same is set at Rs 290 per share, which is a 5% discount to Monday's closing price. Citigroup is the placement agent for the same.
• HFCL: Received a letter of award worth Rs 678.50 crore from L&T for supply of I.T. equipment, software solutions and associated equipment. The project is expected to be completed by April 2022.
• JB Chemical & Pharma: Promoter Tau Investments created pledge of 3.4 crore shares (44% equity stake). Pledge stake increased from 10% to 54%. Condition required to obtain financing for the acquisition of equity shares of the promoter Tau Holdco by Tau Investments.
• Engineers India: To consider buyback of equity shares on November 12.
• TCS: To acquire 100% stake in Postbank Systems from Deutsche Bank. The transaction is subject to both parties finalising agreements, which they intend to do by end of 2020.
• Inox Leisure: Launches QIP at Rs 263.1 per share. Floor price is a 1.42% discount to Monday's closing. Panel to meet on or after November 12 to discuss closing of QIP and issue price for the sale.
• Punjab & Sind Bank: To seek approval to offer, issue, create and allot equity shares worth Rs 6,000 crore through FPO, rights issue, QIP, preferential issue or any other mode or combination thereof. It intends to do the same in one or more tranches within a period of 12 months. This includes previous approval to raise Rs 500 crore through a QIP. It will also seek approval to increase the authorised equity share capital of the bank to Rs 10,000 crore from Rs 3,000 crore.
• Dalmia Bharat and Sugar Industries: Board gives in-principal approval to the expansion of sugar and distillery capacities. To increase overall cane crushing capacity by 5,000 TCD and distillery production to around 15 crore litres from the current 8 crore litres over the next 2-3 years. The capex for the same is pegged at Rs 412 crore which will be funded through internal accruals and debt.
• Birla Tyres: Anirban Moulik to resign as CFO from November 18.
• Nifty Earnings Today: GAIL, Mahindra & Mahindra, Hindalco
• Non-Nifty Earnings Today: Aarti Industries, Alkyl Amines, Aster DM Healthcare, Bata, Exide Industries, GMR Infra, Godfrey Phillips, Hindustan Copper, Info Edge, JB Chemicals, Kaveri Seed, Motherson Sumi, NCC, Raymond, RCF, RITES, Sadbhav Infra, Symphony, Tata Power, TTK Prestige, V-Mart Retail.

Earnings Reported After Market Hours

Oil India Q2FY21

• Revenue down 32.5% to Rs 2,169 crore
• Net profit down 61.9% to Rs 239 crore
• Ebitda down 40.7% to Rs 737.4 crore
• Ebitda margin at 34% from 38.7%
• Exceptional loss of Rs 134 crore this quarter due to blowout at oil producing well in Assam
• All numbers are standalone and compared on a year-on-year basis
• Despite the decline year-on-year, the numbers are ahead of Bloomberg consensus estimates

JK Cement Q2FY21

• Revenue up 23.6% to Rs 1,550.7 crore
• Net profit up 2.1 times to Rs 223.5 crore
• Ebitda up 61.7% to Rs 410.7 crore
• Ebitda margin at 26.5% from 20.3%
• All numbers are standalone and compared on a year-on-year basis

EID Parry Q2FY21

• Revenue up 2.8% to Rs 5,836.2 crore
• Net profit up 75% to Rs 317.8 crore
• Ebitda up 33% to Rs 875.6 crore
• Ebitda margin at 15% from 11.6%
• Better realisations, cost reduction measures aid margin expansion
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

CLSA On Indian I.T.

• Margin beat in Q2FY21 was driven by transient factors, most of which could reverse
• Mean reversion would likely happen at a varied pace and degree
• Normalised margins over FY22/23 should sustain above the previously assumed levels
• Optically rich valuations and low probability of fresh triggers in a seasonally soft Q3, may keep stocks ranged in the near-term
• Incremental surprise could be more topline driven
• Maintain bottom-up bias for HCL Tech, Infosys, Tech Mahindra

HSBC Global Research on Cipla:

• Maintain Hold; TP revised to Rs 865 from Rs 820
• Q2 saw a strong recovery in India sales helped by growth in base sales
• Contribution from Covid-19 related products aided topline growth
• Key focus remains on scaling up gProventil sales in the U.S.
• Cost optimizations through higher digital adoption
• key catalysts: better pick-up in gProventil & beat on FY21 cost saving target

Investec Securities on Indian Banks:

• Positive convergence in H1’21 & H2’21e will have negative convergence
• Visible Stress – known known problem – Overdue
• Postponed stress – known unknown problem – Restructuring
• Unknown unknown problem - ECLGS ‘The hidden tail risks’ for Indian Banks
• Kotak (top pick), ICICI Bank and HDFC Bank - preferred large bank
• CUBK, DCBB and RBL - mid-sized banks picks
• Reiterate cautious stance towards Axis (Hold) and IndusInd Bank (Sell)

Pledged Share Details

• Sun Pharma: Promoter Shanghvi Finance released pledge of 42 lakh shares on November 4.
• Parag Milk Foods: Promoters released pledge of 49.43 lakh shares on November 9.

(As Reported On November 9)

Bulk Deals

• Apollo Pipes: Sageone Investment Advisors acquired 69,714 shares (0.53%) at Rs 597.1 per share.

Who’s Meeting Whom

• Syngene International: To meet Arohi AMC and AGF Investments between November 10-11.
• Shriram City Union Finance: To meet Canara Robeco AMC on November 10.
• KEC International: To meet Centrum Broking on November 11.
• Dixon Tech: To meet Enam AMC, Centrum PMS and other investors between November 12-13.
• MCX: To meet IIFL AMC, Alchemy Capital and Birla Mutual Fund from November 10-12.

Trading Tweaks

• AGM: AGC Networks.
• Price Band Revised From 20% To 5%: Menon Bearings, Mold-Tek Technologies, Nitin Spinners, Music Broadcast, Reliance Power.
• Price Band Revised From 10% To 5%: AGC Networks, Tirupati Forge.
• Move Into ASM Framework: IG Petrochem, Ducon Infratech.
• Move Into Short Term ASM Framework: Apollo Pipes, Acrysil.
• Move Out Of Short Term ASM Framework: Tera Software, HBL Power Systems.

Insider Trades

• Anant Raj: Promoter Ashok Sarin acquired 68,622 shares between November 5-6.

(As Reported On November 9)

Money Market Update

• The currency ended with modest gains on Monday, ending at 74.14 against the U.S. Dollar as compared to Friday's close of 74.2.

F&O Cues

• Nifty November futures closed at 12,480; premium of 19 points from discount of 4 points
• Nifty November futures add 2.3% and 2.61 lakh shares in Open Interest
• Nifty Bank November futures closed at 27,581; premium of 47 points from discount of 61 points
• Nifty Bank November futures shed 8% and 1.56 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.64

Nifty Weekly Expiry: November 12

• Maximum Open Interest on Call side at 12,700 strike (26.4 lakh shares)
• Maximum Open Interest on Put side at 12,000 strike (37.9 lakh shares)
• Active Options: 12,300 Put (+22.5 lakh shares) and 12,800 Call (+8.05 lakh shares)

Nifty Monthly Expiry: November 26

• Maximum Open Interest on Call side at 13,000 strike (18.5 lakh shares)
• Maximum Open Interest on Put side at 12,000 strike (27.4 lakh shares)