All You Need To Know Going Into Trade On October 27
Morning commuters make their way to work in buses and motorcycles in the Bac Giang province, Vietnam. (Photographer: Linh Pham/Bloomberg)

All You Need To Know Going Into Trade On October 27

Asian markets have opened lower this morning, tracking a weak overnight session on Wall Street.

Concerns over global economic growth rise as Covid-19 sees a second wave in U.S. and Europe while stimulus talks drag on.

Benchmark indices in Japan, Australia and South Korea are declining in early trade. The U.S. Dollar has held gains while oil prices are steady after a fall.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.2% to 11,794 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.

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

  • Futures on the Dow Jones are currently trading 70 points higher. The index fell 2.3% on Monday. The S&P 500 too saw its biggest fall in a month.
  • Ongoing spending talks in Washington continued to weigh on sentiment as prospects dimmed for fiscal aid before the presidential election.
  • A gauge of technology stocks in Europe fell the most since March, after a 22% decline in SAP SE, following a cut to its sales forecast and a warning that the pandemic will hurt business through mid-2021.
  • “The reflation trade which was working so beautifully is being part unwound – not because of election repricing, but due to the new wave of Covid cases,” Chris Weston, head of research at Pepperstone wrote in a note.
  • Yield on the 10-year treasuries stood at 0.79%.
  • West Texas Intermediate crude was up 0.2% at $38.65 per barrel.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On October 27

Stocks To Watch

  • NTPC: To consider proposal for share buyback on November 2. SEBI had granted certain exemptions to the company for proceeding with the share buyback on October 23. The government holds 51% stake in the company, as per the latest shareholding pattern.
  • Aurobindo Pharma: Novartis has filed a complaint in the Federal Court in Wilmington, Delaware against the company, stating that Aurobindo's proposed generic version of a treatment for dry eye infringes 15 patents for Xiidra, which Novartis acquired in 2019 for $3.4 billion. Novartis has sought a court order blocking copies until the patients expire.
  • IDBI Bank: To consider raising funds via Qualified Institutional Placement on October 29.
  • Great Eastern Shipping: Board approved raising Rs 150 crore via NCDs.
  • Forbes & Co: ICRA downgrades rating on long-term funds to ICRA BB+ from ICRA BBB+ while the outlook has been retained as negative. Similarly, it has also downgraded the rating on short-term funds to ICRA A4+ from ICRA A2. The rating downgrade reflects the weakening financial profile of its parent company, Shapoorji Pallonji.
  • NCL Industries: Cement production up 65% in the September quarter to 6.14 lakh MT. Cement dispatches up 68% to 6.16 lakh MT. Cement boards production down 50% to 9,216 MT while Cement boards dispatches down 9% to 13,748 MT. Numbers compared on a year-on-year basis.
  • Coforge: Promoter Hulst BV sold 38 lakh shares or 6.27% stake at Rs 2,310.56 per share.
  • Nifty Earnings Today: Bharti Airtel, Tata Motors
  • Non-Nifty Earnings Today: Amara Raja Batteries, Castrol India, CEAT, ICICI Prudential, JM Financial, Nippon Life India AMC, Suven Life, SKF India

Earnings Reported After Market Hours

Torrent Pharma Q2FY21

  • Revenue flat at Rs 2,017 crore
  • Net profit up 27% to Rs 310 crore
  • Ebitda up 17.4% to Rs 635 crore
  • Ebitda margin at 31.5% from 27%
  • Lower other expenses contribute to profit, margin improvement
  • India revenue up 7% to Rs 963 crore
  • U.S. revenue down 14% to Rs 327 crore
  • Brazil revenue down 18% to Rs 129 crore
  • Germany revenue up 4% to Rs 261 crore
  • All numbers are consolidated and compared on a year-on-year basis

Angel Broking Q2FY21

  • Revenue up 80.4% to Rs 309.9 crore
  • Net profit up 3.9 times to Rs 74.5 crore
  • Ebitda up 3 times to Rs 110.5 crore
  • Ebitda margin at 35.7% from 21.7%
  • Declares dividend of Rs 4.15 per share
  • Added 5,49,802 new clients in the current quarter
  • All numbers are consolidated and compared on a year-on-year basis

Finolex Industries Q2FY21

  • Revenue up 1.6% to Rs 585.8 crore
  • Net profit up 16.6% to Rs 119.7 crore
  • Ebitda up 76.6% to Rs 144.8 crore
  • Ebitda margin at 24.7% from 14.2%
  • PVC Resin volume growth of 15% to 47,630 MT
  • Business has witnessed recovery in Q2 with near normal operating conditions
  • Better realisations, lower costs and higher volumes in PVR Resin segment aid operational performance
  • Pipe and Fittings volume decline 9.2% to 43,618 MT
  • All numbers are standalone and compared on a year-on-year basis

Brokerage Radar

Phillip Capital On Godrej Consumer Products

  • Buy rating maintained
  • Price target raised to Rs 860 from Rs 770
  • Household Insecticides business will see a strong rebound due to rising preference for disease prevention products
  • Hair colour business to make a comeback in FY22
  • Personal wash segment becomes an interesting proportion
  • Strong consumer response to health-based soaps in the Southern market
  • Will prioritise growth over margins given the raw material tailwinds
  • Raise FY22-23 EPS estimates by 7% each
  • Top anti-consensus high-conviction buy

Emkay On SBI Life Insurance

  • Buy rating maintained
  • Price target cut to Rs 1,006 from Rs 1,084
  • VNB margins likely to improve, however, pricing is key
  • Best-in-class operating efficiency maintained
  • Management expects stability over operating expenses
  • Trimmed VNB margin estimates to ~21.3% for FY23E
  • Continue to like the stock based on an attractive risk-reward

Pledged Share Details

  • Adani Ports & SEZ: Promoter SB Adani Family Trust created pledge of 1.74 crore shares on October 23.
  • Dish TV: Promoters invoked pledge of 2.95 crore shares on October 22.
  • Adani Transmission: Promoter SB Adani Family Trust created pledge of 1.63 crore shares on October 23.

(As Reported On October 26)

Who’s Meeting Whom

  • India Energy Exchange: To meet Max Life Insurance and ICICI Prudential Life Insurance on October 27.

Trading Tweaks

  • Price Band Revised From 10% To 5%: Reliance Home Finance, Tata Teleservices (Maharashtra).
  • Price Band Revised From 20% To 10%: AGC Networks.
  • Move Into Short Term ASM Framework: Reliance Power, Himatsingka Seide.
  • Move Out Of Short Term ASM Framework: Jaiprakash Associates.

Money Market Update

  • The rupee ended lower at 73.85 against the U.S. Dollar as compared to Friday's close of 73.61.
  • It ended as the second worst performer in Asia on Monday.
All You Need To Know Going Into Trade On October 27

F&O Cues

  • Nifty October futures closed at 11,780; premium of 12 points from 4 points
  • Nifty October futures shed 12.6% and 13 lakh shares in Open Interest
  • Nifty Bank October futures closed at 24,126; premium of 51 points from 50 points
  • Nifty Bank October futures shed 13.2% and 2 lakh shares in Open Interest
  • Nifty Put-Call Ratio at 0.85
  • Enters F&O Ban: Coforge
  • Out Of F&O Ban: BHEL, Canara Bank, Punjab National Bank
  • Stocks In F&O Ban: Coforge, Escorts, Nalco, Vedanta, Vodafone Idea

Nifty Monthly Expiry: October 29

  • Maximum Open Interest on call side at 12,500 strike (56 lakh shares)
  • Maximum Open Interest on put side at 10,500 strike (37 lakh shares)
  • Active Options: 11,900 Put (-7.2lakh shares) and 11,900 Call (19.2 lakh shares)
All You Need To Know Going Into Trade On October 27
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