All You Need To Know Going Into Trade On September 17
Passengers wear protective masks while travelling on a Delhi Metro. (Photographer. T. Narayan/Bloomberg)

All You Need To Know Going Into Trade On September 17

Asian markets struck a cautious note this morning after U.S. Federal Reserve Chair Jerome Powell highlighted the uncertainty of an economic rebound without further stimulus.

The treasury yield curve steepened as Powell stopped short of offering new specifics on the Fed's approach to the monthly bond purchases.

The U.S. Dollar was little changed while the offshore yuan fell.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.3% to 11,570 as of 6:45 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 which may influence equities in today's session:

  • Benchmark indices in Japan and Australia are flat while those in South Korea are declining.
  • Futuers on the Dow Jones are trading 80 points lower this morning. The index ended flat on Wednesday as well. S&P 500 and Nasdaq undeperformed, owing to selling pressure in technology shares like Apple and Facebook.
  • The Fed chair said that while recovery has progressed more quickly than generally expected, the path ahead remains highly uncertain.
  • "Easy financial conditions and a low rate outlook for the next couple of years maintains a supportive backdrop for risk assets and downward pressure on the U.S. Dollar," Kerry Craig of JPMorgan asset management told Bloomberg.
  • The Bank of Japan, Bank of Indonesia and Bank of England will come out with their policy decisions today.
  • Yield on the 10-year treasuries stood at 0.69%.
  • West Texas Intermediate crude stood at $40.22 per barrel, after a 4.9% jump overnight. Gold was little changed at $1,960.1/Oz.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On September 17

Stocks To Watch

  • HCL Technologies: Announces expansion of strategic partnership with Google Cloud.
  • Aviation Stocks: Civil Aviation Minister Hardeep Singh Puri, in a written reply to parliament said that airline operators have sought government help to ask banks to defer loan repayments by six months and not to classify such loans as an NPA. Carriers have also sought Aviation Turbine Fuel (ATF) to be included under the GST regime and excise duty on jet fuel to be abolished.
  • Dhanuka Agritech: Sets September 28 as record date for buyback of shares. The board had approved a buyback worth Rs 100 crore at Rs 1,000 per share on July 22.
  • ICICI Bank: Board approved proposal to resume seeking approval from RBI for the appointment of Sandeep Batra as a whole-time director (designated as Executive Director) of the bank, for a period of five years.
  • Suven Pharma: September 28 set as record date for bonus issue. The company had approved a 1:1 bonus issue on August 17.
  • Puravankara: Board approves raising Rs 70 crore through NCDs.
  • Intellect Design Arena: Company’s banking platform has gone live for Bank of Bahrain and Kuwait.
  • HSIL: To consider share buy-back on Sept.21.
  • Deepak Nitrite: CRISIL upgrades long-term rating outlook of the company's bank loan facilities worth Rs 750 crore to CRISIL AA-/Positive from CRISIL AA-/Stable. It has also re-affirmed the short-term rating as CRISIL A1+.
  • Sanofi India: Charles Billard resigns as CFO from September 30, to take up a new role within the group. He will continue as the non-executive director of the company.
  • India Energy Exchange: Dalmia Cement (Bharat) acquired 70 lakh shares (2.34%) at Rs 206.2 per share and DPVL Ventures sold 70 lakh shares (2.34%) at Rs 206.2 per share.

Brokerage Radar

CLSA On Reliance Industries

  • Outperform rating maintained
  • Price target of Rs 2,250
  • Media speculation of 40% stake sale in Reliance Retail to Amazon sounds odd
  • Any such move may only be in the form of a merger and we remain skeptical of such a merger
  • Reliance will clearly be diluted in this merger scenario, implying a spot bull case price target of Rs 2,560
  • Any immediate upside remains capped

CLSA On Dalmia Bharat

  • Buy rating maintained
  • Price target cut to Rs 1,000 from Rs 1,010
  • Annual report emphasises ESG improvement and becoming a pan-India player
  • Capacity expansion should enable strong growth in the next few years and improve RoCE
  • Expect RoCE to improve 250 basis points in FY21-23
  • Key Concerns: High non-core investments, clinker availability, Low RoCEs
  • Concerns of investors are more than priced in
  • New expansions unlikely to face clinker shortages
  • At EV/tonne of $63, we see risk-reward as attractive

Citi On SAIL

  • Upgrade to buy from neutral
  • Price target raised to Rs 50 from Rs 40
  • Open a 90-day positive catalyst watch for the stock
  • Domestic steel prices up by Rs 3,000-4,000 per tonne since June/July lows
  • Improving domestic demand, rising volumes and likely lower exports augur well
  • Expect SAIL to be profitable in FY22E as compared to a loss earlier
  • Raise Ebitda estimates by 64%, 16% and 22% respectively for FY21E/FY22E/FY23E
  • Raise price-to-book multiple to 0.5 times from 0.4 times

Jefferies On Container Corporation of India

  • Buy rating maintained
  • Price target of Rs 525
  • Expect 25% year-on-year volume decline in Q2
  • Stock has potential to double over the next three years
  • See 26% volume CAGR over FY21E-25E with the commissioning of the DFC
  • Privatisation will provide the additional upside
  • Disappointment on higher Land License Fees revision has led to some loss of faith with investors
  • Rise in volumes, news of DFC commissioning will lead to re-rating from current levels
  • Upside Scenario price target: Rs 700

Kotak Institutional Equities On InterGlobe Aviation

  • Buy rating maintained
  • Price target of Rs 1,520
  • Market share gains good for now, may not sustain
  • Gains in current positive contribution margin environment help provide it with much needed liquidity and may obviate the need for external funding.
  • May be better placed to maintain a reasonable share and improve domestic yields
  • Able competition may limit scope to sustain high market share over time
  • Bake in 52% share for IndiGo over the medium-term
  • Earnings more valuable if driven by stabilising spreads, steady share and overseas growth

Antique Stock Broking On Raymond

  • Buy rating maintained
  • Price target cut to Rs 395 from Rs 427
  • Operating performance better than our expectations
  • Consumer spending may improve ahead of upcoming festive season
  • Cut earnings estimates for FY21 sharply in view of the adverse scenario and lack of visibility
  • Will revisit earnings outlook on getting a clearer picture

BOB Caps On Shriram Transport Finance

  • Initiate coverage with buy rating
  • Price target of Rs 1,000
  • Expect business to rebound in H2FY22 led by firming up of used CV prices
  • Bake in a 7% AUM AGR over FY20-23 with stable spreads of ~6%
  • Expect restructuring post-pandemic to be limited to less than 10% of AUM
  • See average credit cost of ~300 basis points through to FY23
  • RoA and RoE are forecast to recover in FY22 to 2.4% and 12.9% respectively

Pledged Share Details

  • Max India: Promoter Max Ventures Investment Holdings released pledge of 10.15 lakh shares on September 11.
  • Laurus Labs: Promoter Satyanarayana Chava released pledge of 6.5 lakh share on September 15.
  • Sadbhav Engineering: Promoter Shashin Patel created pledge of 31.83 lakh shares on September 14.
  • Asian Paints: Promoter Smiti Holding and Trading released pledge of 8.36 lakh shares on September 15.
  • MEP Infra Developers: Promoter Sudha Mhaiskar revoked pledge of 4.5 lakh shares on September 11.

(As Reported On September 16)

Who’s Meeting Whom

  • India Energy Exchange: To meet ASK Investments, Kontiki Capital Management and other investors between September 17-24.
  • Syngene: To meet Fidelity International, First State Investments and JP Morgan between September 17-18.
  • Mahindra Holidays and Resorts: To meet Enam AMC on September 17.
  • Escorts: To meet Wellington Management on September 17.
  • Rossari Biotech: To meet Fiera Capital on September 17.

Trading Tweaks

  • AGM Date: IPCA Labs, Suven Pharma, Uflex, BEML, REC, Vinati Organics, Suzlon Energy, Majesco, Indraprastha Gas, Neogen Chemicals, Phoenix Mills, Arvind, Apollo Hospitals, Glenmark Pharma, PI Industries, IOL Chemical and Pharma, Kiri Industries.
  • Listing: Happiest Minds Technologies.
  • Record Date For Rights Issue: Deepak Fertilizers and Petrochemicals (rights at 3:20, premium of Rs 123 per share)
  • Price Band Revised From 10% To 5%: Datamatics Global Services, SMVD Poly Pack.
  • Move Into ASM Framework: Dangee Dums, CHD Chemicals,
  • Move Into Short Term ASM Framework: Max India, Adani Green Energy.
  • Move Out Of Short Term ASM Framework: AstraZeneca Pharma, Future Retail, Investment Trust of India, HLE Glascoat, Cheviot.

Insider Trades

  • Grasim: Promoter IGH Holdings acquired 43.5 lakh shares between September 10-11.
  • Sequent Scientific: Promoters sold 10 lakh shares between August 27 - September 14
  • Trident: Promoter Trident Capital acquired 9 lakh shares on September 15.
  • Mindtree: Promoters sold 18.5 lakh shares on September 14.
  • Max Healthcare Institute: Promoter Max Ventures Investment Holdings sold 4.6 crore shares on September 11

(As Reported On September 16)

Money Market Update

  • The rupee recovered from the day's low to end with gains at 73.53 against the U.S. Dollar on Wednesday, as compared to Tuesday's close of 73.65.
All You Need To Know Going Into Trade On September 17

F&O Cues

  • Nifty September futures closed at 11,612; premium of 7 points from 12 points
  • Nifty September futures add 4.4% and 5 lakh shares in Open Interest
  • Nifty Bank September futures closed at 22,646; premium of 72 points from 131 points
  • Nifty Bank September futures shed 3% and add 51,000 shares in Open Interest
  • Nifty Put-Call Ratio at 1.32
  • Enters F&O Ban: Aurobindo Pharma
  • Stocks In F&O Ban: Adani Enterprises, Aurobindo Pharma, Bank of Baroda, BHEL, Canara Bank, Escorts, Indiabulls Housing Finance, JSPL, Tata Chemicals, Vedanta, Vodafone Idea

Nifty Weekly Expiry: September 17

  • Maximum Open Interest on Call side at 11,700 strike (27.7 lakh shares)
  • Maximum Open Interest on Put side at 11,500 strike (31.7 lakh shares)
  • Active Options: 11,600 Put (14.9 lakh shares) and 11,500 Call (-11.4lakh shares)

Nifty Monthly Expiry: September 24

  • Maximum Open Interest on Call side at 12,000 strike (26.2 lakh shares)
  • Maximum Open Interest on Put side at 11,500 strike (32.2 lakh shares)
All You Need To Know Going Into Trade On September 17
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