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All You Need To Know Going Into Trade On Sept. 11

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

The bell inside the Yangon Stock Exchange (YSX) is seen in Yangon, Myanmar. (Photograph: Taylor Weidman/Bloomberg)
The bell inside the Yangon Stock Exchange (YSX) is seen in Yangon, Myanmar. (Photograph: Taylor Weidman/Bloomberg)

Stocks in Asia edged higher following a late rally in U.S. equities.

Japan, South Korea and Australia saw equities advance. Futures on the S&P 500 Index were steady. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.44 percent to 11,018.50 as of 7 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 erased losses in the final moments of trading as investors continued to gravitate to value shares.
  • Chinese assets will be in focus after the country removed a foreign investment limit in its capital markets.
  • With investors awaiting the European Central Bank’s policy decision on Thursday and the Federal Reserve’s next week, some are dialling back expectations for more aggressive central bank accommodation.
  • Apple suppliers in Asia will be in focus after the company unveiled its new iPhone lineup.
  • Oil erased earlier losses after the release of bullish U.S. inventory data that showed a larger-than-expected drop in crude stockpiles.

Get your daily fix of global markets here.

Opinion
India-China Spat Delays Deal Covering a Third of Global Trade

Indian ADRs

All You Need To Know Going Into Trade On Sept. 11

Stocks To Watch

  • Reliance Capital called off its general insurance unit’s sale to Hero Fincorp, forcing Anil Ambani to look for options as he seeks to reduce debt, Bloomberg reported quoting people familiar with the matter.
  • DSP Mutual Fund said that DHFL has paid the balance amount of Rs 75 crore, resulting in the complete recovery of CPs held by various schemes of DSP Mutual Fund. Company stated that it has honoured payment obligations in due course as original repayment schedule until July 5.
  • DFM Foods: AI Global Investments (Cyprus) PCC Ltd., a subsidiary of U.S.-based private equity firm Advent International Corporation, will acquire the company for Rs 852 crore. To comply with the market regulator’s guideline, AI Global Investments also made an open offer for 1.3 crore shares, or 26 percent of the voting share capital, at Rs 249.5 apiece, aggregating to Rs 326.1 crore. The offer price is at 9 percent discount from its current market price.
  • Reliance Nippon Life Asset Management: Promoter Reliance Capital plans to sell up to 1.93 crore shares or 3.15 percent of equity via offer-for-sale for over Rs 505 crore. Reliance Capital held 32.12 percent stake in the company as of June 30. The offer opens today for non-retail investors. The sale for retail investors will open on Sept. 12.
  • Meghmani Organics’ arm said that it will set up project of Epichlorohydrin with a capacity of 50,000 tonne per annum. The project will be setup with a capex of Rs 275 crore and is expected to generate revenue of Rs 460 crore per annum at optimum operating rate. At present, the aforementioned product is imported entirely for domestic consumption.
  • Sun Pharma unit has increased its stake in PJSC Biosintez (Russia) from 96.96 percent to 100 percent for $8.2 lakh.
  • Tata Motors: JLR sales down 6.7 percent year-on-year to 34,176 units.
  • HCL Technologies plans to acquire 100 percent stake in Sankalp Semi-Conductors for Rs 180 crore.
  • Quess Corp: Fair trade regulator Competition Commission of India has approved Amazon Group’s investment arm’s application to invest in equity shares of the company by preferential allotment.
  • Future Lifestyle Fashions: Board approved allotment 64.8 lakh shares at an issue price of Rs 463 per share aggregating to Rs 300 crore to Apollo India Private Equity (Mauritius).
  • Inox Leisure: HDFC MF increased its stake from 5.2 percent to 7.4 percent in the company.
  • Eveready Industries clarified that on the report of Duracell buying its assets, stating that no definitive decisions around such possible option has been made by the company.
  • Bharat Road Network: NCLAT withdrew Religare Finvest’s application for insolvency against the company, as amicable settlement has been reached between both the parties.
  • Goa Carbon: August Production of Calcined Petroleum Coke at 16,627 million tonnes.
  • Punjab & Sind Bank to consider capital infusion of Rs 800 crore by Government of India on Sept. 19.
  • Indian Overseas Bank to keep MCLR unchanged across various tenors at current levels with effect from Sept. 10.
  • Oriental Bank of Commerce has reduced MCLR by 15 to 20 basis points across various tenors with effect from Sept. 10. One Month MCLR at 8 percent and one-year MCLR at 8.4 percent.
  • Varun Beverages to increase its stake from 35 percent to 55 percent in Lunarmech Technologies for Rs 15 crore.
  • Essel Propack: Promoter Epsilon created pledge of 75 percent stake in the company in favor of DB International Trust (Singapore)
  • Indiabulls Real Estate plans to sell stake in four joint-ventures at an aggregate equity value of Rs 4,420 crore to Blackstone Group. The stake sale will help achieve the company its target of being zero net debt. The deal is subject to closing adjustments and is expected to complete soon.
Opinion
Yes Bank Clarifies On News Reports Regarding Stake Sale

Brokerage Radar

CLSA on Ashok Leyland

  • Maintained ‘Sell’; cut price target to Rs 40 from Rs 50.
  • Truck slowdown intensifying; risk of elongated downcycle.
  • Past two truck downcycles lasted 27-28 months.
  • Too early and too expensive to call for a stock bottom.

Goldman Sachs on Bandhan Bank

  • Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 615 from Rs 594.
  • Asset quality overdone; benefit from moderating interest rates.
  • Benign asset quality and healthy loan growth to drive profitability.
  • Expect net profit CAGR of 30 percent over FY20-22 largely on higher margins.

HSBC on Glenmark Pharma

  • Maintained ‘Hold’; cut price target to Rs 435 from Rs 480.
  • Efforts ongoing to unlock value after reorganising business in three distinct entities.
  • Stake sale in API and non-core assets to reduce debt but timing is uncertain.
  • Notable operational performance and value unlocking key trigger.

Macquarie on NCC

  • Maintained ‘Outperform’; cut price target to Rs 108 from Rs 122.
  • Affordable housing project to start in December quarter.
  • Balance sheet in decent shape; working capital to gradually reduce.
  • Cut EPS by 16 percent and 10 percent respectively for the current and the next financial year respectively to factor in slowdown in Andhra Pradesh.
  • Still remains best mid-cap pick in the construction space.

Edelweiss on Nestle India

  • Downgraded to ‘Hold’ from ‘Buy’; hiked price target to Rs 12,850 from Rs 12,410.
  • Downgrading post recent rally and due to limited upside.
  • Recent stimulus to drive rural growth, proportion of which to Nestle’s revenue is limited.
  • Focus on innovation and premiumization to help clock strong volume led growth.

HSBC on Escorts

  • Maintained ‘Buy’; cut price target to Rs 770 from Rs 980.
  • Tractor demand may bottom out in H2 as 3 states should see pick up in monsoons.
  • Slowdown in construction activity leads to fall in rural labour prices which is negative.
  • TP cut led by lower valuation multiple due to demand deterioration.

Jefferies on UPL

  • Maintained ‘Buy’; cut price target to Rs 745 from Rs 780.
  • Choppy near term; robust long term.
  • Interim hiccups should be ironed out by business synergies & accretive cash flows.
  • Cut EPS estimates by 13 percent, 5 percent and 3 percent for the current and the next two financial years respectively to factor in slower pace of synergy accruals and higher adjustments.

Credit Suisse on Tech Mahindra

  • Maintained ‘Outperform’; hiked price target to Rs 800 from Rs 730.
  • Hike EPS estimates by 3-7 percent for FY20-22 due to higher growth and recent INR depreciation.
  • Telecom business is amidst a strong recovery since last four quarters.
  • Confident telecom business is well placed to achieve high single-digit growth in the current financial year.
Opinion
Watch This Stock for Early Signs of India’s Consumption Revival

Trading Tweaks

  • Rajratan Global Wire ex-date for bonus issue at 4:3.
  • Jaypee Infatech to move into ASM Framework.
  • Essar Shipping, Kirloskar Electric, Prabhat Dairy, Prakash Industries, Puravankara, Ludlow Jute & Specialities to move into short term ASM Framework.
  • Balaji Telefilms to move out of short term ASM Framework.
  • Alembic price band revised to 20 percent.
  • Ludlow Jute & Specialities, Shankara Building Products, RattanIndia Power price band revised to 10 percent.
  • Shilpa Medicare, Hathway Cable & Datacom price band revised to 5 percent.

Insider Trading

  • Elpro International promoter International Conveyors acquired 4 lakh shares on Sept. 5.
  • Anant Raj promoters acquired 3.3 lakh shares from Sept. 5-6.
  • Panama Petrochem promoter group Ittefaq Ice and Cold Storage acquired 84,000 shares from Sept. 5-6.
  • Jindal Stainless Steel promoter Ratan Jindal acquired 1.56 lakh shares from Sept. 5-6.
Opinion
BSE Small-Cap, Mid-Cap Stocks Plunge Over 15% In 2019-20 So Far

Who’s Meeting Whom

  • Exclerx Services to meet ICICI Pru MF on Sept. 13.
  • Bharat Forge to meet Walter Scott and East Bridge Capital from Sept. 11-13.
  • MCX to meet White Ok, O3 Capital and other investors from Sept. 11-13.
  • Ceat to meet BOB Capital on Sept. 13.

Money Market Update

The Indian rupee is likely to open weaker today, inline with emerging Asian peers. The implied opening from forwards suggest rupee may start trading at 71.92 against the U.S. dollar.

In the bond market, the sovereign bonds are likely to drop amid a sharp surge in U.S. treasury yields and a rise in crude prices.

U.S. bond market’s September sell-off kept going yesterday, driving treasury yields to the highest levels in a month, likely due to the expanding supply of issuance there. Brent crude is also now trading above $62.5 a barrel.

F&O Cues

September Futures

  • Nifty Sep futures closed at 11,025, premium of 22 points versus 27.4 points.
  • Nifty futures OI down 2 percent, sheds 3.4 lakh shares in open interest.
  • Bank Nifty Sep futures closed at 27,551, premium of 47 points versus 58 points.
  • Bank Nifty futures OI up 5 percent, adds 78,000 shares in open interest.

Options

  • Nifty PCR at 1.41 versus 1.30 (across all series)

Nifty Weekly Expiry: Sept. 12

  • Max open interest on call side at 11,000 (17 lakh shares)
  • Max open interest on put side at 10,900 (30.2 lakh shares)
  • Open interest addition seen at 10,900P (+9.2 lakh shares), 11,000P (+7.8 lakh shares)
  • Open interest shedding seen at 10900C (-3.6 lakh shares)

Nifty Monthly Expiry: Sept. 26

  • Max open interest on call side at 11,500 (20.6 lakh shares)
  • Max open interest on put side at 10,800 (33.4 lakh shares)
All You Need To Know Going Into Trade On Sept. 11