All You Need To Know Going Into Trade On Sept. 23

Asian stocks were mixed and yuan climbed along with U.S. equity futures as investors monitored signs of progress in trade discussions between America and China.

Shares in Sydney rose and were little changed in Seoul. Japan is closed for a holiday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 1.35 percent to 11,493 as of 8:10 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 all that could influence equities today.

• With Tokyo closed for a holiday, cash Treasuries won’t trade until the London open.
• Oil advanced following a report that full repairs to Saudi oil fields hit by the drone attack may take many months.
• The S&P 500 halted a three-day advance on Friday after Chinese trade officials cancelled farm visits and President Donald Trump called the nation a threat.

Get your daily fix of global markets here.

Indian ADRs

Stocks To Watch

• Thyrocare Technologies said that the company will not sell the shares of wholly owned subsidiary Nueclear Healthcare to A. Velumani, the promoter, chairman, MD and CEO. Audit committee recommended the board to not accept the offer as they felt that the same may result in dilution of his focus and time, which is not in the interest of the company.
• Reliance Capital: CARE Ratings downgraded rating on debt programmes worth Rs 17000 crore of company to D on account of recent instance of delay in servicing of coupon on several non-convertible debentures. The company said that the payments were delayed by one day due to technical glitch in bank servers.
• Federal Bank received RBI approval for reappointment of Shyam Srinivasan as the MD & CEO of the Bank with effect from Sept. 23, 2019 till Sept. 22, 2020.
• Cipla received Establishment Inspection Report (EIR), indicating closure of the inspection, from the U.S. FDA for the company's API manufacturing facility in Virgonagar, Bengaluru.
• Biocon received eight Form 483 by the U.S. Food and Drug Administration for two units in Bengaluru. The U.S. FDA had conducted a pre-approval inspection of these units from Sept. 10-19, and even gave one general observation after the inspection. The company said that the pre-approval inspection of new facilities does not have any impact on the current commercialisation plans from company’s existing facilities.
• Petronet LNG: Tellurian Inc. said it signed a $7.5 billion agreement with the company to buy its proposed liquefied natural gas terminal in Louisiana, in what could potentially be one of the largest foreign investments in the U.S. to ship shale gas abroad. Petronet will spend $2.5 billion for an 18% equity stake in the $28 billion Driftwood LNG terminal -- the largest outside holding so far in the project -- and negotiate the purchase of 5 million tons of gas per annum, Bloomberg reported quoting Tellurian Chief Executive Officer Meg Gentle.
• ICRA received a reply to termination letter by the counsel of Naresh Takkar. The rating agency said that it is considering the reply and will respond appropriate.
• MCX will consider raising total limit in foreign investment in the company by up to the prescribed sectoral cap of 49 percent.
• Torrent Pharma is expanding its voluntary recall for tablets used to control hypertension in the U.S. due to detection of traces of N-Methylnitrosobutyric acid, according to health regulator U.S. FDA, according to PTI report. “The recall is expanded to include an additional three lots of Losartan potassium tablets USP and two lots of Losartan potassium/hydrochlorothiazide tablets, USP,” the news agency reported quoting company’s announcement.
• Cox & Kings defaulted on the payment of commercial papers worth Rs 30 crore, which was due on Sept. 20.
• Filatex India said that it has increased its polymerization capacity from 900 TPD to 1,050 TPD and added machines for producing 170 TPD of Partially Oriented Yarn at Dahej unit, has commenced its operations.
• Alkem Laboratories acquired Cachet Pharma from its subsidiary company for Rs 51.85 crore.
• Seamec stated that deployment of vessel SEMEAC II has extended the contract for a further period of 91 days, till Dec. 28.
• Uflex: Arun Kumar Pandey resigned from chief financial officer’s post with effect from Sept. 20.
• Info Edge: The National Company Law Tribunal has approved the capital reduction plan of the company.
• IPCA Lab: Board to consider issuance of convertible bonds on Sept. 26.
• IOB: Raised Rs 500 crore via Basel III Tier II bonds issue.
• Syndicate Bank, OBC, UCO Bank: All India Bank Officers’ Confederation, All India Bank Officers’ Association, Indian National Bank Officers’ Congress, National Organization of Bank Officers have called for an all India strike by Bank Employees on Sept. 26 and 27.
• Edelweiss: Brickworks ratings revised the rating assigned to secured non-convertible debentures worth Rs 50 crore from ‘BWR AA+’ rating to ‘BWR AA’, outlook remains negative.

Brokerage Radar

Morgan Stanley on Banks

• Tax cut structurally positive for large banks; full benefit in 2020-21.
• Near-term EPS likely be affected by DTA reversal, which would be large for banks with NPL problems.
• Avoid challenged lenders given asset quality concerns.
• Tax cut is very positive for earnings, but asset quality stress is unlikely to go away.
• HDFC Bank: Maintained ‘Overweight’; hiked price target to Rs 1,700 from Rs 1,500.
• IndusInd Bank: Maintained ‘Overweight’; hiked price target to Rs 2,000 from Rs 1,875.

Morgan Stanley on Autos

• Lower tax benefits all OEMs.
• See greater EPS upside risk for Ashok, Amara, Hero and Eicher.
• Tax cut could also boost private investments, job creation.
• Tax cut to benefit domestic consumer discretionary spend.

Morgan Stanley on Oil & Gas

• Reduction in income tax to benefit Reliance, oil marketers and gas utilities the most.
• Should lower investor concern on downside risks from weaker demand/margins.
• Raises the overhang from potential equity divestments for ONGC and IOCL.

Nomura on Ashok Leyland

• Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 87 from Rs 72.
• Visibility improves on investment-led CV revival.
• Demand benefit should come across the sector as the GDP growth improves over time.
• Valuations factor in tough near-term weakness.

Citi on India Electric Utilities

• Power demand slowdown in August was likely a blip.
• Coal supply position comfortable; though weaker than Q1FY20.
• Merchant prices have bottomed out and are at healthy levels now.
• Imported coal prices continue to remain soft.
• Receivables situation remains a concern; increased to Rs 74,600 crore in July 2019 versus Rs 58,300 crore in March 2019.

Trading Tweaks

• State Trading Corporation of India, MMTC price band revised to 10 percent.
• Orient Paper & Industries, Shree Rama Newsprint, Somany Ceramics to move out of short term ASM Framework.

Who’s Meeting Whom

• Titan to meet Rare Enterprises, Limiar Capital and WCM Investment Management from Sept. 23-26.
• Tata Motors to meet Karma Capital, SBI MF and other investors from Sept. 23-27.
• Jyothy Labs to meet BNP Paribas Securities on Sept. 23.
• Tata Steel to meet Fidelity Investments and Westwood Global Investment from Sept. 23-26.
• Chalet Hotels to meet HDFC Standard Life Insurance on Sept. 23.
• Mahindra & Mahindra to meet Axis Capital and Premji Investment from Sept. 23-26.
• Mahindra Logistics to meet Reliance MF, Goldman Sachs and other investors from Sept. 24-25.

Insider Trading

• Bombay Dyeing & Manufacturing promoter Jer Mavis Settlement sold 54,000 shares on Sept. 18.
• Godrej Industries promoter Anamudi Real Estates acquired 64,000 shares from Sept. 18-19.
• HEG promoter RSWM sold 1.6 lakh shares on Sept. 18.

Money Market Update

• The rupee closed at 70.95/$ versus 71.33/$ on Thursday.

F&O Cues

Futures

• Nifty September futures closed at 11,295, premium of 21.5 points versus 6.5 points.
• Nifty futures OI across series up 8 percent, adds 17.5 lakh shares in OI.
• Bank Nifty Sep futures closed at 28,989.9, premium of 8 points versus 24.2 points.
• Bank Nifty futures OI across series down 1 percent, sheds 11,000 shares in OI.
• Nifty Rollover at 24 percent, Bank Nifty Rollover at 20 percent.

Options

• Nifty PCR at 1.38 versus 1.03 (across all series)

Nifty Monthly Expiry (Sept. 26)

• Max OI on call side at 11,500 (27.4 lakh shares)
• Max OI on put side at 11,000 (48.5 lakh shares)
• OI addition seen at 11,000P (+26.4 lakh shares), 11,200P (+19 lakh shares), 11,000P (+19 lakh shares)