All You Need To Know Going Into Trade On Sept. 25

Stocks in Asia fell after U.S. equities dropped and Treasuries rose on political turmoil in Washington.

Shares were lower in Tokyo, Sydney and Seoul, though losses were smaller than the biggest decline in a month on the S&P 500 overnight. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.38 percent to 11,587.50 as of 6:40 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.

• Oil fell on signs Saudi Arabia is making progress in restoring lost output following a drone attack on its facilities.
• The S&P 500 fell the most in a month after it was reported that House Speaker Nancy Pelosi would announce a formal impeachment inquiry of President Donald Trump. The benchmark cut losses earlier in the day after Trump said he would release a complete transcript on Wednesday of his phone call with the Ukrainian president.
• The 10-year Treasury yield hit a two-week low, while the dollar fell to session lows.
• The Stoxx Europe 600 Index ended little changed. The DAX Index dropped 0.3 percent and the FTSE fell 0.5 percent.

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Indian ADRs

Stocks To Watch

• SpiceJet is weighing an order for at least 100 Airbus planes as Boeing Co. grapples with the fallout over its grounded 737 Max, according to Bloomberg report. The company may buy a “sizable” number of Airbus A321LR and XLR jets to accommodate a planned expansion, the reported added quoting SpiceJet Chairman Ajay Singh.
• Kaveri Seed: Board approved share buyback of up to 28 lakh shares, or 4.44 percent of equity shares aggregating to Rs 196 crore. The buyback price is set at Rs 700 per share, which is at 28 percent premium to yesterday’s closing price. The promoters intend to participate in the proposed share buyback and they have 55.09 percent stake in the company.
• Zee Entertainment Enterprises: IDBI Trusteeship Services invoked pledge of 1 crore share, or 1.04 percent stake from Sept. 19-24. IDBI Trusteeship Services acted as debenture trustee for non-convertible debentures issued by Edinson Infrapower & Multiventures, Konti Infrapower & Multiventures, Pan India Network Infravest and Pan India Utilities Distribution.
• Centum Electronics has inaugurated its space facility in Bengaluru with an investment of Rs 50 crore. The company is an electronics industry partner for Indian Space Research Organisation .
• RPP Infra Projects JV received road construction order in Myanmar worth Rs 414 crore.
• Nagarjuna Fertilizers & Chemicals: Registrar of Companies has approved extension of time of holding the annual general meeting till Dec. 25.
• Mindtree: Shareholders approved appointment of Debashis Chatterjee as Chief Executive Officer and Managing Director and AM Naik as non-executive Chairman.
• Aster DM Healthcare has signed lease agreements for two new hospital projects in Bengaluru.
• Bosch has executed a business transfer agreement with Group’s arm Robert Bosch Packaging Technology to sell its packaging machinery business for Rs 144.6 crore. Sale of the aforementioned business to be effective from close of Sept. 30. The board has also decided to close the company’s thermo-technology business.
• GOCL Corporation said that it has fully repaid loan facilities of $300 million availed for the purpose of Houghton International. Company has received no due certificate from the bank which had provided the facility.
• Adani Group Stocks: Bombay High Court will hear on Sept. 30 a petition filed by the Group seeking direction to the GVK Group-run Mumbai International Airport and the aviation ministry to allow buying out minority stake held by South African firm Bidvest in the airport. The suit came up for hearing before a single bench of Justice AK Menon on Tuesday. The court said it would hear arguments for interim relief on Sept. 30. (PTI)
• SBI Life Insurance said that it is committed towards ensuring that company achieves minimum public shareholding norms as per Securities and Exchange Board of India order. Promoters required to a complete a further divestment of only 2.1 percent of the company’s paid-up capital equity share capital on or before Oct. 2, 2020.
• JSW Steel: Harsco signed three multi-year addon contracts for 10-15 years with company for a total value of $75 million, according to Bloomberg report. Besides, the board approved raising up to $400 million via unsecured notes.
• Reliance Communications: Global Cloud Xchange announced that Bill Barney, CEO of Reliance Communications and Chairman & CEO of Global Cloud Xchange has resigned his RCom role to focus full time at the helm of GCX during its corporate restructuring process.
• Future Retail: IDBI Trusteeship Services (acting for EC Holdings, EW Special Opportunities Funds and Edelweiss Commodities Services) acquired 1.31 crore shares. Company has also pledged additional 52.2 lakh shares to the debenture trustee for the benefit of NCD holders.
• Monsanto: Record date for amalgamation of the company with Bayer Cropscience extended to Sept. 30.
• GATI: Goldman Sachs reduced it stake in the company from 7.12 percent to 5.12 percent.
• JSW Steel: Board approved raising up to $400 million via unsecured notes.
• Morepen Laboratories: SEBI has prohibited the company from accessing the capital market and restrained it from dealing in securities in the securities including units of mutual funds for a period of one year. Order to come in force from immediate effect.
• Speciality Restaurants has incorporated a wholly owned arm in the U.S.
• Indiabulls Housing Finance: Ratings on the long-term debt instruments and bank facilities downgraded to CARE AA+ from CARE AAA. Revision due to the continued challenging funding environment for NBFCs and HFCs, with elevated risk aversion among lenders and investors, especially for wholesale lenders with significant exposure to the real estate sector.

New Offering

• State-owned Indian Railway Catering and Tourism Corp.’s Rs 645.12 crore IPO opens on Sept 30 and closes on Oct. 3. The price band is set at Rs 315-320 apiece.

Brokerage Radar

CLSA on Varun Beverages

• Maintained ‘Buy’; hiked price target to Rs 860 from Rs 783.
• Focus shifts from territory consolidation to improving return ratios.
• Expect growth to remain strong as mgmt. will focus on market share gains.
• Hike EPS by 9-14 percent to factor in strong second quarter and lower tax rates.

Morgan Stanley on SBI

• Downgraded to ‘Equal-weight’ from ‘Overweight’; maintained price target at Rs 330
• Downgrade as upside appears limited given uncertainty on asset quality.
• Hike FY21/22 EPS estimates by 5 percent as tax rate cut outweighs lower margins.
• Prefer large private banks where better EPS progression and re-rating is expected.

Macquarie on United Spirits

• Maintained ‘Neutral’; hiked price target to Rs 592 from Rs 565.
• Steep inflation seen in raw materials – ENA, molasses and glass.
• Expect margin pressure due to higher raw material prices, higher tax in Maharashtra and no price hike.
• Competitive intensity remains strong; hike price target to factor in lower tax rate.

BofAML on Voltas

• Maintained ‘Neutral’ with a price target of Rs 672.
• Festive sales key to watch.
• Onam sales muted due to rains; Diwali and Dussehra key to watch.
• Chinese players struggling in distribution and after sales service – most important aspect.
• Voltbek: Full scale operation in Diwali 2020; targets 10 percent market share and breakeven by 2025.

HSBC on Titan

• Upgraded to ‘Buy’ from ‘Hold’; hiked price target to Rs 1,450 from Rs 1,200.
• View Titan as long-term structural winner.
• Well positioned to monetise the ongoing shift from unorganised to organised sector.
• Market share gains have accelerated; valuations appealing.

Trading Tweaks

• Texmaco Rail & Engineering record date for Rights Issue at 19:100, at a premium of Rs 45.7 per share.
• Bank of India to move out of F&O trading with effect from Nov. 29.
• Taj GVK Hotels & Resorts, Ind-Swift to move into short term ASM Framework.
• Gallantt Ispat, Aditya Birla Money, SMS Lifesciences India, Williamson Magor and Lumax Industries to move out of short term ASM Framework.

Who’s Meeting Whom

• Granules India to meet Fidelity International, Polunin Capital and other investors on Sept. 25
• Sundaram Fasteners to meet Carnelian Capital Advisors on Sept. 25.
• Nocil to meet Edelweiss Financial Services on Sept. 25.

Insider Trading

• HEG promoter RSWM sold 29,000 shares on Sept. 20.
• Vakrangee promoter & director Dinesh Nanadwana acquired 13.5 lakh shares on Sept. 24.
• Anant Raj promoter Amar Sarin acquired 1.24 lakh shares on Sept. 23.
• Tourism Finance Corporation promoter Redkite Capital sold 1.15 lakh shares from Sept. 20-23.
• Apollo Tricoat Tubes promoter Saket Agarwal sold 1 lakh shares on Sept. 23.

Money Market Update

A drop in crude oil prices and U.S. Treasury yields are likely to support sovereign bonds that have been under pressure on government’s second half borrowing plans. The administration so far plans to stick to earlier announced borrowing calendar and there has been no decision on the overseas bond sale, a government official told reporters yesterday. Yield on the 10-year note is expected to trade in a range of 6.75-6.80 percent in the day.

In the currency market, implied opening from forwards suggest the pair may start trading around 71.02 a dollar. Asian markets are trading in the red with concerns on U.S.-China trade war. Traders see the pair in a range of 70.80-71.35 a dollar

F&O Cues

Futures

• Nifty September futures closed at 11,613.8, premium of 25.8 points versus 7 points.
• Nifty futures open interest across series down 2.5 percent, sheds 5.5 lakh shares in open interest.
• Bank Nifty September futures closed at 30,250, premium of 67 points versus discount of 26.6 points.
• Bank Nifty futures open interest across series down 4 percent, sheds 68k shares in open interest.
• Nifty Rollover at 38 percent, Bank Nifty Rollover at 35 percent.

Options

• Nifty PCR at 1.43 versus 1.50 (across all series).

Nifty Monthly Expiry: Sept. 26

• Max open interest on call side at 11,700 (27.4 lakh shares).
• Max open interest on put side at 11,500 (34.9 lakh shares).
• open interest addition seen at 11,500P (+8.8 lakh shares), 11,700C (+6.5 lakh shares), 11,600P (+4.7 lakh shares).