All You Need To Know Going Into Trade On September 4
A pedestrian carrying an umbrella walks through Main Street Park in the Brooklyn borough of New York. (Photographer: Michael Nagle/Bloomberg)

All You Need To Know Going Into Trade On September 4

Asian markets have opened lower on the final trading day of the week, in-line with the decline by its peers on Wall Street.

The recent rally in global markets is showing signs of unwinding as investors questioned the sustainability of lofty valuations.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 1% to 11,430 as of 7:10 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.

Let's take a look at the factors that may influence equities in today's session:

  • Benchmark indices in Japan, South Korea and Australia are trading with losses. However, they are narrower than the those seen overnight on Wall Street.
  • Futures on the Dow Jones are trading lower by 30 points, while those on the Nasdaq are down 150 points. The Dow Jones ended 2.8% lower on Thursday while the Nasdaq fell over 5% - the biggest single-day decline since March.
  • Data on Thursday indicated that applications for jobless claims in the U.S. fell last week. The jobs report due today is forecast to show payrolls continuing its rebound in August.
  • Entry into haven assets has remained muted despite the drop in equities.
  • West Texas Intermediate crude fell 0.9% to $41.05 per barrel while Gold was little changed at $1,929.5/Oz.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On September 4

Stocks To Watch

  • Banking Stocks: Supreme Court has adjourned hearing in the loan moratorium case till September 10. Accounts not declared as NPAs as on August 31 shall not be declared so until further orders. Banks need to roll out resolution schemes for Covid-19 induced stressed accounts by September 15, FM Sitharaman told bankers on September 3.
  • Vodafone Idea: Clarified on the news of Verizon, Amazon may invest over $4 billion on the company stating that as a corporate strategy, the company is evaluating opportunities and currently there is no proposal as reported by media that is being considered by the board. The board meeting to discuss raising of funds to be held today.
  • Allcargo Logistics: Bloomberg News reports that the company is considering listing its international business on a European exchange, as it weighs its proposal to give up its listing in India. The company may seek a new listing as soon as next year. The company could seek to value the business at $800 million to $850 million in an offering.
  • The government has imposed an anti-dumping duty on Ciprofloxacin Hydrochloride imports from China for six months. A levy of $0.9-$3.49 per kg has been imposed on the raw material used in making antibiotics. Aarti Drugs, Aurobindo Pharma, Dr Reddy's Laboratories, Neuland Laboratories and Sun Pharma are some of the producers of the antibacterial drug in India.
  • Gujarat State Fertilizers and Chemicals: Has restarted its methanol plant with an installed capacity of 525 metric tonnes per day. The plant will be operating at its full capacity from September 10 and is expected to produce 470 metric tonnes of Methanol per day. As a result of this, the company’s top-line is likely to grow by Rs 150 crore in FY21.
  • Infosys: To acquire 100% stake in a product design and development firm Kaleidoscope Innovation for $42 million.
  • Hindustan Aeronautics: Government proposes to offer 5.02 lakh shares at Rs 950.95 per share to the company’s employees. The offer for sale will remain open from September 4-9.
  • CreditAccess Grameen: Says that loans under moratorium are now down to 18% in August as compared to 24% in July and 26% in June. Overall collections have also seen an improvement with efficiency rising to 82% in August from 76% in July. The board has also approved raising funds to the tune of 1,000 crore rupees through issue of equity shares.
  • Tata Power: MD Praveer Sinha stated in a webinar that the company has prepared a roadmap to retire its coal power plants after their shelf life.
  • Cheviot: To consider share buyback on September 8.
  • Mindspace Business Parks REIT: To consider raising Rs 500 crore via NCDs on September 14.
  • Hind Rectifiers: Mumbai manufacturing plant has increased its capacity to 30% from 10%.
  • Kaveri Seed: Pabrai Investment Funds decreased stake to 5.21% from 7.24% on September 1.
  • 5Paisa Capital: Board approved raising Rs 900 crore via issue of equity shares.
  • Trident: Has resumed operations at its Budhni plant in Madhya Pradesh.
  • Videocon Industries: 11 prospective resolution applicants have submitted their resolution plan.
  • Non-Nifty Earnings Today: Jubilant Life Sciences, Repco Home Finance

Earnings Reported After Market Hours

Jubilant Industries Q1FY21

  • Revenue down 38% to Rs 94.6 crore
  • Net loss of Rs 3.1 crore from net profit of Rs 9.6 crore
  • Ebitda down 76.8% to Rs 4.1 crore
  • Ebitda margin at 4.3% from 11.6%
  • All numbers are consolidated and compared on a year-on-year basis

Panacea Biotech Q1FY21

  • Revenue up 5.6% to Rs 132.8 crore
  • Net loss widens to Rs 33.1 crore from Rs 26.5 crore
  • Ebitda down 3.8% to Rs 22.5 crore
  • Ebitda margin at 16.9% from 18.6%
  • All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

CLSA On CreditAccess Grameen

  • Initiate coverage with buy rating
  • Price target of Rs 840
  • Madura Micro Finance acquisition will help consolidate leadership position
  • Better placed to capture the Indian MFI opportunity
  • Unique customer-centric business model, strong HR practices, steady branch expansion and MNC parentage
  • Asset quality during earlier crisis have been better than industry
  • Premium valuations are likely to sustain due to market leadership position with high growth and return ratios despite unsecured nature of loan book

CLSA On Tata Motors

  • Buy rating maintained
  • Price target raised to Rs 220 from Rs 135
  • Sequential volume recovery and cost cuts may drive turnaround in free cash flows
  • Cost-Savings focus starting to be reflected in JLR's financials
  • Forecasts are lower than guidance and AGM commentary
  • Raise FY21-23 Ebitda estimates by 1-6%
  • Raise free cash flow estimates to Rs 22,000 crore from Rs 16,500 crore
  • Risks: A sudden slowdown in recovery trajectory and significant rise in investments

Ambit On Page Industries

  • Sell rating maintained
  • Price target raised to Rs 16,200 from Rs 15,500
  • Higher price points, dominance in male innerwear category, and benefits of leveraging of male innerwear distribution are three long-term challenges
  • Street's expectations of 21-22% margins may not pan out due to higher incentives and employee costs
  • Expectations on revenue growth too need to adjust to new normalised 10-12%
  • Valuations are expensive
  • Upgrade FY21 Ebitda/EPS estimates by 23%/29% led by better cost control
  • Build-in revenue/Ebitda/PAT CAGR of 6%/9%/11% over FY20-22

Jefferies On Adani Ports & SEZ

  • Buy rating maintained
  • Being opportunistic on using balance sheet strength
  • Well placed to enhance shareholder value from distress asset sale in the current environment
  • Krishnapatnam acquisition is value accretive
  • Downside risk is a sustainable sharp slowdown in port volumes
  • Upside case: Mundra cargo volumes pick-up, faster ramp-up at the other ports, pick-up in port realisations
  • Upside case price target of Rs 500
  • Downside case: Stagnation in all-India port cargo volumes, other smaller ports are slow to ramp up, port realisations come off
  • Downside case price target: Rs 250

Macquarie On Indian I.T.

  • Market share of large cap companies has scope to rise further driven by improving capabilities
  • Cloud adoption, customer experience enhancement and core transformation to drive growth ahead
  • Introduce five-factor ranking framework for largecap companies
  • TCS and Infosys stand out compared to the rest
  • Raise FY22-23E EPS estimates by up to 8%
  • Top Largecap Picks: Infosys & HCL Technologies
  • Top Midcap Picks: L&T Infotech & Mphasis
  • Upgrade TCS to outperform from neutral; price target of Rs 2,424
  • Upgrade Wipro to outperform from neutral; price target raised to Rs 300 from Rs 210
  • Upgrade Mindtree to neutral from underperform; price target raised to Rs 1,219 from Rs 850

Pledged Share Details

  • JSPL: Promoters revoked pledge of 14 lakh shares on August 31.
  • GPT Infraprojects: Promoter GPT Sons created pledge of 37 lakh shares on September 3.

(As Reported On September 3)

Who’s Meeting Whom

  • Mahindra Holidays & Resorts: To meet Enam Group on September 7.
  • Pidilite Industries: To meet Columbia Threadneedle Investments on September 4.
  • SH Kelkar: To meet Bay Partners, Tata Mutual Fund and other investors from September 4-11.

Trading Tweaks

  • AGM Date: ITC, Divi’s Laboratories, Balkrishna Industries, Amber Enterprises, Diamines Chemicals, Hester Biosciences, IFB Industries, IFB Agro, InterGlobe Aviation, Insecticides, Pfizer, Kokuyo Camlin, Zuari Global, Shalby, Ingersoll Rand.
  • Fund Raising: ADF Foods, South Indian Bank, Pricol, Vodafone Idea.
  • Price Band Revision From 10% To 5%: Future Retail.
  • Price Band Revision From 20% To 10%: Marine Electricals.
  • Price Band Revision From 5% To 20%: Fairchem Speciality, Max Healthcare Institute.
  • Move Into ASM Framework: Beardsell, Jump Networks.
  • Move Into Short Term ASM Framework: Ausom Enterprise, IndiaMART InterMESH, Adani Green Energy.
  • Move Out Of Short Term ASM Framework: GSS Infotech, Minda Industries, Gujarat Narmada Valley Fertilizers and Chemicals, Somany Ceramics, Sadbhav Infrastructure Project, Welspun India.
  • Move Into Surveillance Measure Due To High Encumbrance: JSW Energy, Vedanta, Panacea Biotec, DPSC, Sterling & Wilson Solar, Future Consumer.
  • Move Out Of Surveillance Measure Due To High Encumbrance: Max Financial Services, Emami, Sequent Scientific, Jindal Stainless (Hisar), Jindal Stainless.

Insider Trades

  • Usha Martin: Promoter Neutral Publishing House acquired 3.93 lakh shares on August 31.
  • Jamna Auto: Promoter Map Auto acquired 64,867 shares on September 1.

(As Reported On September 3)

Money Market Update

  • The currency posted its biggest single-day decline in four months, ending at 73.48 against the U.S. Dollar as compared to Wednesday's close of 73.03.
  • The rupee was the worst performing currency in Asia on Thursday.
All You Need To Know Going Into Trade On September 4

F&O Cues

  • Nifty September futures closed at 11,550; premium of 22 points from 30 points
  • Nifty September futures add 1.8% and 1.9 lakh shares in Open Interest
  • Nifty Bank September futures closed at 23,580; premium of 49 points from 46 points
  • Nifty Bank September futures add 6.3% and 88,000 shares in Open Interest
  • Nifty Put-Call Ratio at 1.27
  • Enter F&O Ban: Canara Bank, Vodafone Idea
  • Stocks In F&O Ban: Canara Bank, Escorts, Indiabulls Housing Finance, PNB, Vodafone Idea

Nifty Weekly Expiry: September 10

  • Maximum Open Interest on Call side at 11,600 strike (14.6 lakh shares)
  • Maximum Open Interest on Put side at 11,500 strike (12.4 lakh shares)
  • Active Options: 11,500 Put (7.8 lakh shares) and 11,600 Call (9.5 lakh shares)

Nifty Monthly Expiry: September 24

  • Maximum Open Interest on Call side at 12,000 strike (19.6 lakh shares)
  • Maximum Open Interest on Put side at 11,000 strike (27.9 lakh shares)
All You Need To Know Going Into Trade On September 4
BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.