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All You Need To Know Going Into Trade On October 13

Stocks in the news, big brokerage calls of the day, complete trade setup and much more!

A person rides an electric scooter down a street lined with closed businesses in Madrid, Spain. (Photographer: Paul Hanna/Bloomberg)
A person rides an electric scooter down a street lined with closed businesses in Madrid, Spain. (Photographer: Paul Hanna/Bloomberg)

Asian markets were mixed at the start of trade this morning, as investors weighed a potential setback on progress towrds a Covid-19 vaccine.

A report stated that Johnson & Johnson's Covid-19 vaccine study has been paused due to an unexplained illness in a participant.

Benchmark indices in Japan are fluctuating, declining in South Korea while they trade with gains in Australia.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.4% to 11,925 as of 7:25 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 70 points lower. The index ended 0.9% higher on Monday. S&P 500 gained for the fourth day while Nasdaq gained the most since April, courtesy technology steps.
  • The yuan is extending an overnight decline, following steps on Monday to curtail its rally.
  • Morning trading session in Hong Kong has been scrapped as a tropical storm is nearing.
  • U.S. President Donald Trump tested negative on consecutive days for Covid-19, his doctor said on Monday afternoon, a week after being released from the hospital for treatment of the disease.
  • The virtual annual meetings of the IMF and the World Bank group begin today and will continue till October 18.
  • Yield on the 10-year treasuries fell to 0.76%.
  • West Texas Intermediate crude was little changed at $39.47 per barrel after declining nearly 3% overnight while Gold was little changed at $1,920.4/Oz.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On October 13

Stocks To Watch

  • Cipla: Arm Avenue Therapeutics gets complete response letter from the U.S. FDA for IV Trambol. The letter states that the application cannot be accepted in its present form. The drug is intended to treat patients in acute pain who require an opioid and is not safe for the intended patient population, according to the letter. U.S. FDA requires an adequate terminal sterlisation validation prior to the NDA approval, which has been planned for later this quarter.
  • SRF: Launches QIP issue on Monday. The floor price of Rs 4,168.7 per share is a 4.58% discount to Monday's closing price. As per SEBI regulations, the company may not offer a discount of more than 5% on the floor price.
  • Infosys: Completed acquisition of product design and development firm, Kaleidoscope Innovation.
  • Deepak Fertilizers: Stated that its rights issue has been oversubscribed.
  • Vivimed Labs: Gets approval for two Ophthalmic products and two oral liquid suspension products. The company is expecting five more approvals in ophthalmic and oral solids during the December quarter.
  • Shalby: Revenue down 8% year-on-year while net profit up 89.9% due to a tax reversal. Ebitda margin at 25.5% from 22.3% courtesy lower operating costs and higher bed occupancy from Covid-19 patients.
  • Rane Brake Lining: To consider share buyback on October 15.
  • Lakshmi Vilas Bank: Board to consider rights issue on October 15.
  • JSW Steel: Approved issuance of dollar denominated notes worth $500 million.
  • Somany Ceramics: ICRA downgraded commercial papers worth Rs 75 crore to ICRA A1 from ICRA A1+. The rating action factors in the ICRA's expectations of weak demand prospects for ceramic tile industry that would in turn result in relatively muted profitability for the company.
  • Suzlon Energy: Has approved allotment of 7.86 crore equity shares on conversion of foreign convertible bonds at Rs 2.61 per share.
  • Non-Nifty Earnings Today: California Software, Karnataka Bank, Tata Steel Long Products.

Earnings Expectations: Wipro Q2FY21

  • Revenue seen 1.1% higher at Rs 15,084.7 crore
  • U.S. Dollar revenue seen 2% higher at $1,960 million
  • Ebit seen 4.1% higher at Rs 2,680.2 crore
  • Ebit margin seen at 17.8% from 17.2%
  • Net profit seen 3.6% higher at Rs 2,477 crore
  • All estimates are compared on a quarter-on-quarter basis

Factors At Play For Wipro:

  • Buyback worth Rs 7,000 crore - Rs 9,000 crore expected
  • Cashflow hedge gain seen at Rs 135 crore
  • Constant currency growth seen between 0.7-2% as per a BQ poll
  • Revenue growth to be aided by integration of 4C and IVIA acquisitions
  • Turnaround plans of the new MD & CEO to be in focus
  • Guidance for Q3FY21 will be critical to watch.

Brokerage Radar

CLSA On Power Sector

  • Reform-led liquidity injection begins
  • $12 billion liquidity injection will lubricate the power sector
  • Excited about the draft allowing timely pass-through of change-in-law claims against the discoms which would lead to automatic tariff hikes
  • Looking at a national tariff policy, amendments to the electricity act and the $2 trillion funding scheme for discoms to achieve sustainability in H2FY21
  • Buyers of NTPC, Power Grid and JSW Energy as defensive growth at deep-value multiples.

UBS On DLF

  • Buy rating maintained
  • Price target raised to Rs 210 from Rs 195
  • Strategic shift in sales strategy, key hirings to drive residential sales and cash flow
  • Revised sales estimates and reduction in overheads drive a 3-7% rise in EPS forecasts over FY21-FY23E.
  • Annuity portfolio should do well over the long-term despite potential challenges
  • Available at a significant discount to the sum of its parts

HSBC On L&T

  • Buy rating maintained
  • Price target cut to Rs 1,160 from Rs 1,200
  • Government's capex has continued close to last year's run rate despite Covid-19
  • Capex outlook has improved on the back of demand recovery
  • Cut earnings estimates by 6-9% to factor in higher finance costs
  • Cut in earnings estimates also factor in lower profitability in real estate business

Pledged Share Details

  • Star Cement: Promoter Vinay and Co created pledge of 2 lakh shares on October 6.

(As Reported On October 12)

Bulk Deals

  • UTI AMC: Edelweiss Alternative Equity Scheme sold 9.18 lakh shares at Rs 515.56 per share.

Who’s Meeting Whom

  • Metropolis Healthcare: To meet ICICI Securities on October 14.

Trading Tweaks

  • Price Band Revised From 20% To 10%: Dynacons Systems & Solutions, Thyrocare Technologies, GTPL Hathway.
  • Buyback Announcement: Wipro.
  • Move Into ASM Framework: Jindal Poly Films, Bal Pharma, Uttam Galva Steels, Videocon Industries.
  • Move Into Short Term ASM Framework: Mohota Industries, Dynacons Systems & Solutions, Repco Home Finance, Sagardeep Alloys.

Money Market Update

  • The rupee snapped a three-day gaining streak on Monday, ending at 73.27 against the U.S. Dollar, as compared to Friday's close of 73.13.
  • The currency was the third best performer in Asia on Monday.
All You Need To Know Going Into Trade On October 13

F&O Cues

  • Nifty October futures end at 11,937; premium of 6 points from 34 points
  • Nifty October futures shed 1% and 93,000 shares in Open Interest
  • Nifty Bank October futures end at 23,769; premium of 56 points from 105 points
  • Nifty Bank October futures add 1% and 19,000 shares in Open Interest
  • Nifty Put-Call Ratio at 1.47
  • Enter F&O Ban: Canara Bank, SAIL
  • Exit F&O Ban: Vedanta
  • Stocks In F&O Ban: Adani Enterprises, BHEL, Canara Bank, JSPL, SAIL, Vodafone Idea

Nifty: October 15 Expiry

  • Maximum Open Interest on Call side at 12,500 strike (36.2 lakh shares)
  • Maximum Open Interest on Put side at 11,500 strike (23.6 lakh shares)
  • Active Options: 11,000 Put (-5.4 lakh shares) and 12,000 Call (12 lakh shares)

Nifty: October 29 Expiry

  • Maximum Open Interest on Call side at 12,500 strike (23 lakh shares)
  • Maximum Open Interest on Put side at 10,500 strike (35 lakh shares)
All You Need To Know Going Into Trade On October 13