All You Need To Know Going Into Trade On Sept. 24
Asian stocks looked set for declines after China on Saturday called off planned trade talks with U.S. officials.
The U.S. and China are hours away from a new round of tariffs on each other’s goods.
Markets are closed in Japan, China and South Korea Monday and Treasuries won’t trade until the London open. Futures on Hong Kong’s Hang Seng Index indicated stock losses.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 11,151 as of 7:15 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- U.S. stocks dropped from early session highs to cap a record-breaking week with something of a whimper.
- The yield on 10-year Treasuries gained less than one basis point to 3.06 percent, a four-month high Friday.
Europe Market Check
- European stocks opened higher Friday after U.S. markets continued to show strength.
- Futures on Australia’s S&P/ASX 200 Index fell 0.4 percent.
- Futures on Hong Kong’s Hang Seng Index dropped 0.3 percent.
- West Texas Intermediate crude jumped 1.1 percent to $71.53 a barrel.
- Gold fell 0.3 percent to $1,196.51 an ounce.
Stocks To Watch
- IL&FS Group said that it was unable to service obligations on some debentures due Sept. 21, Bloomberg reported.
- DHFL’s Kapil Wadhawan stated that the company has not defaulted on any bonds or repayment nor has there been any single instance of delay on any of its repayment of any liability. In his statement he also said that the company has no exposure to IL&FS. He also added that the company’s debt instruments or fixed deposits are neither under watch nor there is any downgrade in the existing credit rating. The company stands with a liquidity of Rs 10,000 crore which equates to six months of cash, he expressed in a statement reported to the exchanges.
- Biocon and its partner Mylan announced that they have received positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use for recommending approval of bio-similar product ‘Fulphila’. This positive opinion will now be considered by the European Commission. The decision on approval is expected by Nov. 2018. The U.S. FDA also completed their inspection at Biocon’s Bangalore facility with no Form 483 being issued.
- Reliance Industries’ telecom unit signed a five-year contract with Star TV for broadcasting cricket content on its platform ‘JioTV’ and Hotstar. Reliance Jio will also launch iPhone XS and iPhone XS Max on its network with pre-booking starting from Sept. 21 and the company will also enable eSim features for both phones.
- ITD Cementation received an order worth Rs 845 crore for Trichy’s International airport upgradation from International Airport by Airports Authority of India and Port Blair’s jetty development by the Ministry of Shipping.
- ABB India to supply power solutions at 23 subtraction stations between 1,500 kilometers lines between Mumbai and Dadri. The deal is with Indian Railways over its Dedicated Freight Corridor which will run through Delhi, Mumbai. Kolkata and Chennai.
- Bayer CropScience mulls to merge with Monsanto India Ltd.
- Tata steel to takeover steel business of Usha Martin for anywhere between Rs 4300 crore to Rs 4700 crore.
- Sequent Scientific to acquire Mahad facility of Solara Active Pharma for an enterprise value of Rs 46.4 crore.
- Galaxy Surfactants gets clearance from the Maharashtra Pollution Control Board to re-open Taloja facility.
Also read: Why Panic Gripped Indian Markets On Friday
- BSE: MV SCIF Mauritius acquired 2.73 lakh shares or 0.52 percent equity at Rs 734.3 each.
- Indiabulls Real Estate: JNL Mellon Capital Management acquired 37.7 lakh shares or 0.83 percent equity at Rs 162.22 each.
- Bajaj Hindusthan Sugar: The Vanguard Group sold 57.4 lakh shares or 0.51 percent equity at Rs 10.42 each.
- Markans Pharma: The Vanguard Group sold 23.4 lakh shares or 0.57 percent equity at Rs 33.23 each.
- Garden Reach Shipbuilders IPO opens with issue price between Rs 115 and Rs 118 per share.
- Inventia Healthcare seeks SEBI Approval for IPO.
AGMs To Watch:
- Aban Offshore
- Care Ratings
- Strides Pharma Science
Who’s Meeting Whom
- Jindal Steel to meet investors from Sept. 24-25.
- Eicher Motors to meet Wells Fargo Asset Management and Lazard Asset Management from Sept. 24-25.
- Galaxy Surfactants to meet investors from Sept. 24-28.
- Apollo Tyres promoter group acquired 7.85 lakh shares on Sept.18.
- Elpro International promoter acquired 4.6 lakh shares on Sept. 19.
- Som Distilleries promoter acquired 11,000 shares on Sept. 18.
(As reported on Sept. 21)
- IL&FS Investment Managers’ circuit filter revised to 10 percent.
- Shree Renuka Sugars’ circuit filter revised to 5 percent.
- Globus Spirits placed under ASM framework.
- Navneet Education’s buyback period is from Sept. 24 to Oct. 8.
- Thyrocare Technologies’ buyback up to Rs 63 crore at a maximum price of Rs 730 per share starts today.
Money Market Update
- Rupee strengthened for second straight day, ending 0.3 percent higher at 72.21 against the U.S. dollar on Friday. The home unit fell for the fourth straight week, down 0.5 percent.
- The 10-year benchmark bond inched up to 8.08 percent. The bond yields snapped a five-week rising streak; down five basis points for the week.
- Nifty September futures closed trading at 11,166 at premium of 23 points versus 39 points.
- September series-Nifty open interest down 8.7 percent; Bank Nifty open interest up 6.7 percent.
- India VIX ended at 15.5, up 10.9 percent.
- Max open interest for Sept series at 11,500 strike price call option (open interest at 33.7 lakh, open interest down 19 percent).
- Max OI for Sept series at 11,000 strike price put option (open interest at 38.4 lakh, open interest up 2.6 percent).
- In Ban: Adani Enterprises, Adani Power, Wockhardt
- New in Ban: Adani Power
- Out of Ban: Balrampur
- Nifty PCR at 1.14 unchanged.
- Nifty Bank PCR at 0.6 versus 0.43.
IIFL on NBFCs
- Believe the panic in NBFC stocks has not settled completely.
- See concerns over short-term liquidity in commercial papers raised by NBFCs.
- Believe investors will probably wait and watch for a clear picture to emerge.
- Broker margin calls is expected to lead to further pressure on market from Monday onwards.
JP Morgan on Tata Steel
- Maintained ‘Overweight’ with a price target of Rs 980, implying a potential upside of 57 percent from the last regular trade.
- Usha Martin acquisition at attractive valuations.
- Removes overhang of Bhushan Power acquisition.
- Indian steel environment currently is strongest over the last few years.
Morgan Stanley on Biocon
- Maintained ‘Overweight’ with a price target of Rs 785, implying a potential upside of 16 percent from the last regular trade.
- Fulphila received a positive opinion from Committee for Medicinal Products for Human Use (CHMP) on Sept. 21, with approval likely in the December quarter for the EU.
- If approved, this would be fifth potential biosimilar approval in nine months.
- Regulatory progress seems to be on track for monetizing biosimilar assets for EU and the U.S. markets.
Credit Suisse on Marico
- Maintained ‘Outperform’ with a price target of Rs 405, implying a potential upside of 20 percent from the last regular trade.
- Floods in Kerala have not impacted the reversal of copra cycle reversal.
- Copra is now at Rs 100 per kg compared to peak of Rs 145 a kg in January 2018.
- Improving volume trends to address key investor concern.
BofA-ML on Telecom
- Handset checks suggest Jio is adding 4-5 million JioPhone users per month.
- Expect Jio's 9-10 million subs add to continue due to 20 million featurephone inventory, better coverage and Chhattisgarh order.
- Industry experts expect another smartphone upgrade cycle in the second half of 2018.
- Expect Bharti/Jio to gain share; Vodafone Idea vulnerable.
Morgan Stanley on Reliance Industries
- Maintained ‘Overweight’ with a price target of Rs 1,230, implying a potential upside of 1 percent from the last regular trade.
- Chemicals division is going through a tussle.
- Rise in ethane costs getting cushioned by very strong PX margins.
- Believe both ethane gas prices and PX margins remain unsustainable at current levels.
Morgan Stanley on L&T
- Maintained ‘Overweight’ with a price target of Rs 1,786, implying a potential upside of 34 percent from the last regular trade.
- Orders in buildings and water divisions have seen a very sharp increase in the next financial year.
- Contributions from power T&D and hydrocarbons is lower.
- 'Saubhagya' implementation and higher oil prices could reverse these trends.