KEY HIGHLIGHTS
Closing Bell: A Strong Finish
Indian equity markets began the final full trading week of August on a strong note, ending near the highest point of the day.
The S&P BSE Sensex ended nearly 1% higher at 38,799 while the NSE Nifty 50 index ended 0.83% higher at 11,466. Both Sensex and Nifty have now gained in five out of the last six trading sessions.
Among the sectoral indices, the Nifty Bank ended as the outperformer in today's session, with gains of 2.4%. Gains were largely led by private banks like HDFC Bank, ICICI Bank and Kotak Mahindra Bank.
Most other sectoral indices remained flat or rangebound. The Nifty Realty was the top sectoral laggard, ending 1% lower while the Pharma and I.T. indices fell 0.4% and 0.3% respectively.
While the midcap index was in-line with the benchmarks, ending 0.9% higher, the smallcap index outperformed, ending with gains of 1.7%.
The India Volatility Index ended 4.1% lower at 19.12.
Market breadth was in favour of the gainers. 1,070 stocks on the NSE ended with gains while 809 stocks declined.
How Did The Sectoral Indices Fare
Zee Entertainment Leads Gains On The Media Index
Buzzing Stock: Pfizer
- Gains as much as 5.8% to Rs 4,869
- Biggest single-day gain in four months
- Trades at the highest level in over three months
- Up for the second straight day
- Has gained in five out of the last six trading sessions
- Today's volumes are 21% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 72
- Has recovered 82% from its 52-week low of Rs 2,668 on August 30, 2019
- 7 out of the 10 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 3.7%
Kalyan Jewellers Files For IPO
Warbug Pincus-backed Kalyan Jewellers has filed for an Initial Public Offering, Bloomberg News reports citing a filing from the Kerala-based company.
The company intends to have a Rs 1,750 crore IPO, comprising a fresh issue of up to Rs 1,000 crore and sale by existing investors amounting to Rs 750 crore.
The company may further consider issue of equity shares, including a rights issue or a preferential issue of shares for up to Rs 500 crore in the pre-IPO placement.
Buzzing Stock: DCB Bank
- Among top performers on the Nifty Smallcap index
- Gains as much as 7.4% to Rs 89.95
- Biggest single-day gain in over a month
- Trades at the highest level in four months
- Up for the fifth straight day
- Longest winning streak in over two months
- Today's volumes are more than 13 times higher than its 20-day average
- Nearing overbought territory with Relative Strength Index (RSI) at 67
- Breaks above 50-Day Moving Average at 81
- Has recovered 52% from its 52-week low of Rs 58 on May 26, 2020
- 18 out of the 31 analysts tracking the stock have a buy recommendation; 5 sell calls
- Return potential of the stock as per Bloomberg data is 6.6%
Contributors To Nifty's Gains
Buzzing Stock: Sterlite Technologies
- Top performer on the Nifty Smallcap index
- Gains as much as 17.6% to Rs 174.4
- Biggest single-day gain since July 2017
- Trades at the highest level since September 2019
- Up for the second straight day
- Today's volumes are more than five times higher than its 20-Day Average
- Stock in overbought territory with Relative Strength Index (RSI) at 75
- The stock has nearly tripled from its 52-week low of Rs 58.6 on March 13, 2020
- Seven out of the 12 analysts tracking the stock have a buy recommendation; 3 sell calls
- The stock trades 15.3% higher than its 12-month consensus price target of Rs 146.6, implying a negative return potential
Markets At 2:10 P.M.
- Benchmark indices trade near the day's high
- Nifty up 1% at 11,481
- Sensex up 1% at 38,838
- Nifty Bank up 2.35% at 22,822
- Nifty Midcap index up 1.1%
- Nifty Smallcap index up 2%
- India Volatility Index down 3.1% to 19.32
- Nifty Pharma, Nifty Realty are top sectoral laggards; down 0.4% each
- Nifty Media is the other major sectoral gainer; up 1.1%
- Zee Entertainment is the top sectoral gainer; up 5.1%
- Power Grid is the top Nifty laggard; down 2%
- 1,136 stocks on the NSE trade with gains while 700 decline
Money Market Update
The rupee has seen strong gains in today's session, gaining the most in nearly two months.
The currency ended at 74.32 against the U.S. Dollar, as compared to Friday's close of 74.84. The rupee has ended at the highest level in over five months.
Today's gains made Rupee the best performing currency in Asia.
Yield on the 10-year government bond ended at 6.165% as compared to Friday's close of 6.088%.
Covid-19 Impact: National Fertilisers
- Continue to face shortage of empty bags from suppliers leading to disruption in dispatches.
- Pile up of stocks at units / ports
- Further delay in resumption of international flights, visa restrictions, quarantine requirements may delay the commissioning of on-going projects
- Production and sale of Nitric Acid is badly affected due to poor demand
- Recruitment action in hand could be delayed further as it will not be possible to make available manpower within the scheduled time.
- Delay in execution of ongoing projects has led to time and cost overrun, severely impacting the company's financial performance.
- Delay of JV is adding extra equity burden and loss of income from marketing of Urea.
- Facing liquidity constraints due to delay in release of fertiliser subsidy by the government owing to inadequate subsidy budget.
- Unprecedented higher borrowings to manage working capital requirement has led to incurrence of huge interest cost to the company.
Shares are off the day's high, after gaining as much as 2.2% to Rs 38.4.
Buzzing Stock: Neuland Laboratories
- Among top performers on the BSE Smallcap index
- Gains as much as 15% to Rs 1,097
- Biggest single-day gain since February 2019
- Trades at the highest level since November 2017
- Up for the third straight day
- Has gained in five out of the last six trading sessions
- Up 36% in the last six trading sessions
- Today's volumes are nearly triple its 20-Day average
- Stock in overbought territory with Relative Strength Index (RSI) at 80
- 200-Day Moving Average of Rs 481 was a resistance from Late-April to June 20
- Post breakout from its 200-DMA, the stock has gained 137%
- The stock has gained nearly four times from its 52-week low of Rs 245 on March 13, 2020
- Three out of the four analysts tracking the stock have a buy recommendation
- The stock trades 15.3% higher than its 12-month consensus price target of Rs 910.5, implying a negative return potential
Nifty Pharma Is The Top Sectoral Laggard
Buzzing Stock: Vinati Organics
- Among the top performing stock on the Nifty 500 index
- Trades at an all-time high
- Gains as much as 13.7% to Rs 1,197.7
- Biggest single-day gain since August 2018
- Up 18% in the last two sessions
- Today's volumes are more than 20 times higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 85
- Has recovered 83.8% from its 52-week low of Rs 651 on March 25, 2020
- Four out of the 11 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 12.1% higher than its 12-month consensus price target of Rs 1,030, implying a negative return potential
European Markets Open Higher
The benchmark indices in Europe have begun the new trading week on a firm footing, courtesy some easing in tensions between U.S. and China.
The Stoxx 600 index has opened 1.1% higher with all sectors opening higher. Technology, Chemical and Auto stocks are the outperformers.
Most Asian markets have ended higher while Futures on the Dow Jones are trading with gains of 180 points.
Brent Crude trades 0.5% higher at $44.57 per barrel while Gold is little changed at $1,942/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 up 1.3% at 3,301
- DAX up 1.4% at 12,945
- CAC up 1.3% at 4,960
- FTSE 100 up 1.1% at 6,069
- IBEX 35 up 1% at 7,054
How Are The Sectoral Indices Faring
Earnings Reaction: Minda Industries Q1FY21
- Revenue down 71% to Rs 417.1 crore
- Net loss of Rs 118.4 crore from net profit of Rs 53.5 crore
- Ebitda loss of Rs 71.5 crore from Ebitda gain of Rs 172.1 crore
- Extended lockdowns and low scale operations lead to decline in revenue
- All facilities are now operational across the globe
- Production levels have witnessed month-on-month improvement in utilisation levels
- Two-wheeler alloy wheels and BS-VI sensor business expected to start commercial operations from September 2020
- The company has launched a Rs 243 crore rights issue which will be open from August 25 to September 8
- All numbers are consolidated and compared on a year-on-year basis
Shares fell as much as 4.73% - the biggest single-day decline in over three months to Rs 326.
Buzzing Stock: eClerx Services
- Among the top performers on the Nifty 500 Index
- Gains as much as 9.8% to Rs 809
- Trades at the highest level since June 2019
- Up for the third straight day
- Has declined only twice in the last 13 trading sessions
- Up 71% in the last 13 trading sessions
- Today's volumes are nearly triple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 85
- The stock has more than doubled from its 52-week low of Rs 320 on March 24, 2020
- 4 out of the 10 analysts tracking the stock have a buy recommendation; 4 sell calls
- The stock trades 27.3% higher than its 12-month consensus price target of Rs 581.6, implying a negative return potential
Buzzing Stock: Metropolis Healthcare
- Gains as much as 9.55% to Rs 1,918
- Biggest single-day gain in five months
- Trades at the highest level in five months
- Has gained in five out of the last six trading sessions
- Up 13% in the last six trading sessions
- Today's volumes are 91% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 74
- The stock has doubled from its 52-week low of Rs 993 on March 24, 2020
- 8 out of the 12 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 11.1% higher than its 12-month consensus price target of Rs 1,702, implying a negative return potential
Markets At Noon
- Benchmark indices hold on to gains
- Nifty up 0.6% at 11,442
- Sensex up 0.63% at 38,676
- Nifty Bank up 2.1% at 22,781
- Nifty Midcap Index up 0.95%
- Nifty Smallcap index up 1.6%
- India Volatility Index down 2.8% at 19.37
- Nifty Auto and Nifty Realty are the other sectoral gainers; up close to 1% each
- Nifty Pharma (down 0.8%) and Nifty I.T. (down 0.4%) are the top sectoral laggards
- Eicher Motors remains the top Nifty gainer; up 6.7%
- Bharti Infratel is the top Nifty laggard; down 2.8%
- 1,109 stocks on the NSE trade with gains while 691 decline
Buzzing Stock: Bata India
- Gains as much as 2.5% to Rs 1,339
- Trades at the highest level in two months
- Up for the sixth straight session
- Longest winning streak since June 2019
- Up 9% in the last six trading sessions
- Today's volumes are 33% higher than its 20-day average
- Breaks above its 50 and 100-Day Moving Average at 1,288 and 1,294 over the last six trading sessions
- Has gained 32.8% from its 52-week low of Rs 1,000 on March 19, 2020
- 7 out of the 15 analysts tracking the stock have a buy recommendation; 5 sell calls
- The stock trades 2.3% higher than its 12-month price target of Rs 1,297.9, implying a negative return potential
Betting On Hotels During A Pandemic?
Buzzing Stock: Persistent Systems
- Trades at an all-time high
- Gains as much as 8.5% to Rs 1,128.3
- Biggest single-day gain in a month
- Up for the fifth straight day
- Has gained 13% in the last five trading sessions
- Today's volumes are double of its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 84
- Has more than doubled from its 52-week low of Rs 420 on March 23, 2020
- 18 out of the 33 analysts tracking the stock have a buy recommendation; 8 sell calls
- The stock trades 20% higher than its 12-month consensus price target of Rs 886, implying a negative return potential
Earnings Reaction: Punjab National Bank Q1FY21
- Net Interest Income up 63% to Rs 6,748.5 crore
- Net profit down 70% to Rs 308.5 crore
- Gross NPA at 14.1% from 14.2% last quarter
- Net NPA at 5.39% from 5.78% last quarter
- Provisions down 4% from the previous quarter to Rs 4,686 crore
Management Commentary:
- Will look to raise QIP fund raise by the end of September or in early Q4
- Will look to restructure 5-6% of our book this year under RBI's new scheme
- While there will not be a large rise in NPAs this year, will see a rise in stressed accounts which are being restructured
- Looking at 4-6% credit growth this year
Shares fell as much as 2.1% to Rs 34.9.
Buzzing Stock: Deepak Fertilisers
- Second best performing stock on the BSE 500 index
- Gains as much as 13% to Rs 183.8
- Biggest single-day gain in five months
- Trades at the highest level since November 2018
- Up for the second straight day
- Has gained nearly 20% in the last two trading sessions
- Today's volumes are nearly quadruple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 71
- Has more than tripled from its 52-week low of Rs 57 on March 19, 2020
Brokerage Reaction: SRF
Shares of the specialty chemicals maker are trading at an all-time high in today's session. Brokerage firm Haitong Securities has initiated coverage on the company with an outperform rating, citing massive opportunities in the specialty chemicals space to drive growth.
Haitong's Rationale:
- Growth momentum in specialty chemicals business may rise backed by higher capex intensity, capabilities and opportunities.
- Strengthening its dominant position in the non-specialty space
- Comfortable debt and strong operating cash flow generation
- Commissioning of two new BOPET lines likely to significantly boost growth
- See Ebitda growth of 18% CAGR over FY20-23E
- Risks: Low commodity prices may shift preference towards generic products, packaging tailwinds may be short-lived, tepid recovery in the Auto Sector.
Haitong has placed a price target of Rs 5,010 on the stock, implying a potential upside of 17% from Friday's closing price.
Shares gained as much as 3.2% to an all-time high of Rs 4,423 and are up for the second straight day.
Nifty Bank Is The Top Sectoral Gainer
Stock Reaction: Steel Strips Wheels
The company has informed the exchanges that it has won export orders for over 3,200 wheels from the EU Truck and U.S. Mobile home market.
The of these orders is worth $57,000, according to the company's exchange filing.
The orders will be executed in the month of September from the company's Chennai plant.
The company has also expressed confidence that its exports business is likely to register a 30% year-on-year growth in FY21.
Shares gained as much as 3.5% to Rs 492, post the announcement and are trading at a five-month high. The stock is up for the second straight day.
Stock Reaction: Orient Bell
Shares of the ceramic wall and floor tiles manufacturer are up for the sixth straight day in today's session and trading at the highest level in over five months.
Porinju Veliyath's Equity Intelligence India acquired 80,000 shares or 0.56% stake in the company on Friday at Rs 91.87 per share.
Shares gained as much as 13.4% - the most in two months to Rs 105.
The stock has risen 26% in the last six trading sessions.
Stock Reaction: BASF India
Shares of the chemicals and specialty chemicals manufacturer rose after Plutus Wealth Management acquired 3.15 lakh shares or 0.73% stake in the company on Friday at Rs 1,584.4 per share.
Shares of the company gained as much as 15.7% to Rs 1,875 - its highest lelvel since October 2018.
The stock had also ended in an upper circuit of 20% on Friday and is up for the fifth straight day. It has gained over 40% during the last five trading sessions.
Market At 10:10 A.M.
- Benchmark indices trade with gains
- Nifty up 0.6% at 11,440
- Sensex up 0.55% at 38,649
- Nifty Bank up 1.5% at 22,631
- Nifty Midcap index up 0.75%
- Nifty Smallcap index up 1.3%
- India Volatility Index down 0.6% to 19.82
- Nifty Media, Nifty Auto index gain over 1% each
- Nifty I.T. (down 0.4%), Nifty Pharma (down 0.75%) the only sectoral laggards
- Eicher Motors is the top Nifty gainer; up 8.4%
- NTPC is the top Nifty laggard; down 1.3%
- 1,150 stocks on the NSE trade with gains while 574 decline
Money Market Update
The currency has opened little changed in today's trading session, after ending the previous week with a positive bias.
The rupee opened at 74.86 against the U.S. Dollar as compared to Friday's close of 74.84. The currency was the third worst performer in Asia last week.
Within the Bond Markets, the RBI sold a 30-year bond at a cutoff yield 10 basis points higher than estimated in a Bloomberg survey.
Yield on the 10-year government bond opened at 6.102% as compared to Friday's close of 6.088%.
Buzzing Stock: Eicher Motors
- Top gainer on the Nifty 50 index
- Gains as much as 10% to Rs 2,389
- Trading ex-stock split in today's session
- Up for the third straight day
- Has gained in five out of the last six trading sessions
- Today's volumes are quadruple its 20-day average
- Stock nearing overbought territory with Relative Strength Index (RSI) at 69
- 21 out of the 46 analysts tracking the stock have a buy recommendation; 19 sell calls
- The stock trades 14.4% higher than its 12-month consensus price target of Rs 2,046, implying a negative return potential
Coronavirus India Updates
- India reports fewer cases than Saturday and Sunday over the last 24 hours
- 61,408 new cases reported in the last 24 hours
- Total confirmed cases at 31,06,348
- Active cases at 7,10,771
- Patients cured / discharged / migrated at 23,38,035
- Death toll rises to 57,542
- 836 deaths reported in the last 24 hours
- 57,469 patients recovered in the last 24 hours
Brokerage Reaction: Jubilant Foodworks
Shares of the QSR company are rising in today's session after brokerage firm ICICI Securities upgraded the stock to Add from Hold, stating that it is best positioned to gain from a faster-than-expected recovery in the economy.
ICICI Securities' Rationale:
- Digital infrastructure and delivery relationships are a competitive advantage
- Consolidation in the industry likely to benefit
- Delivery charge and variabilisation of costs can help mitigate the near-term pressure on profitability
- Expect revenue / Ebitda / PAT CAGR of 9% / 15% and 33% respectively over FY20-22E
The brokerage has also raised its price target on the stock to Rs 2,100 from the earlier Rs 1,800.
Shares rose as much as 3.1% to an all-time high of Rs 2,040. The stock is up for the sixth straight day - its highest gaining streak since January this year.
Earnings Reaction: Union Bank Of India Q1FY21
- Net Interest Income up 2.5 times to Rs 6,524.4 crore
- Net loss widens to Rs 2,897.8 crore from Rs 2,713 crore
- Gross NPA at 14.95% from 14.15% last quarter
- Net NPA at 4.97% from 5.49% last quarter
- Total provisions at Rs 3,590 crore from Rs 1,531.1 crore
- Deposits up 7.3% to Rs 8,92,542 crore
- Advances up 2% to Rs 6,50,127 crore
- Merged with Andhra and Corporation Bank on April 1
- Covid-19 provisions worth Rs 343.2 crore this quarter, overall provisions at Rs 683 crore
Shares gained as much as 5.8% to Rs 32.2 and are up for the second straight day.
Opening Bell: A Steady Start
Indian equity markets opened on a steady note to begin the final full trading week of August amidst mixed Global cues.
The S&P BSE Sensex opened 0.3% higher at 38,566 while the NSE Nifty 50 index opened above the 11,400 mark, up 0.36% at 11,412.
All sectoral indices have opened higher with the Nifty PSU Bank index opening with gains of 1.3%.
The Nifty Bank, Media and Metal indices have gained 1% each at the start of trade.
Broader markets have opened higher than the benchmarks in today's session. The midcap index gained 0.9% while the smallcap index is up 1.1% at the start of trade.
Market breadth was in favour of the advances. 1,277 stocks on the NSE opened with gains while 279 are declining.
Latest On The Coronavirus
- Total cases cross 23.3 million globally
- Death toll rises to 8.07 lakh
- Deaths in the U.S. fall below 1,000 for the first time in five days
- New Zealand reports seven new confirmed cases
- 266 new cases reported in South Korea, down from 397 on Sunday
- 3,948 new cases reported in Mexico with 226 deaths. Death toll now above 60,000
- 494 deaths reported in Brazil over the last 24 hours
- 4,897 new cases reported in France, the largest increase since the Mid-April peak
- 284 new cases recorded in Greece, taking the total to 8,664
- U.K. cases remain above 1,000 for the fourth straight day
- 1,210 cases reported in Italy, higher than 1,071 on Sunday
How Did The Fund Flows Fare On Friday
Key Stocks In Focus
- Indiabulls Housing Finance: The company in a press release has stated that the phase of reduction in loan book and AUM is over. It plans to grow its AUM in FY21 by 12%,. It has executed an agreement for co-origination with a mid-sized private sector bank for MSME loans. Active sources of loans shall begin from September 1. It also aims to grow its balance sheet by 7-8% in FY21.
- Mindspace Business Parks REIT: Public unit holder BREP Asia SG Pear Holding created an encumbrance of 5.43 crore units amounting to a 9.16% stake in favour of certain overseas financial institutions availed for a credit facility availed by the trust.
- ICICI Lombard: Will acquire Bharti AXA General Insurance's non-life insurance operations in a share swap deal for an undisclosed sum. Shareholders of Bharti AXA will receive two shares of ICICI Lombard for every 115 shares held, as per the share swap ratio.
- A2Z Infra Engineering: Gets work order worth Rs 104 crore for fibre installation from Airtel's group company.
- Sun Pharma: Gets U.S. FDA approval for Methylphenitdate Hydrochloride.
- Phoenix Mills: Closes its QIP issue on August 21. The issue price of Rs 605 per share is a 1.03% discount to the floor price and a 13% discount to Friday's closing price.
- Dixon Technologies: The Board of Directors have approved raising of funds by way of issuance of any instrument or security, including equity shares, fully / partly convertible debentures, NCDs, Foreign Currency Convertible Bonds, warrants or any other combination thereof, in one or more tranches for an amount not exceeding Rs 200 crore, subject to necessary approvals.
- Granules India: Wholly-owned subsidiary gets U.S. FDA approval for its Abbreviated New Drug Application (ANDA) for Ramelteon Tablets. The drug is used in the treatment of insomnia. The drug had U.S. sales of approximately $33 million for the most recent twelve months ending in June 2020, as per IQVIA.
- Non-Nifty Earnings Today: Ingersoll Rand, Globus Spirits, IRB Infra, LIC Housing, Nocil, Suzlon
To know more about earnings reported after market hours, key brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Final Full Trading Week Of August
Good Morning!
Indian equity markets closed the week ended Aug. 21 with gains, led by positive global sentiment. So far this month, the Nifty 50 has risen close to 3%.
Futures are indicating a steady start to the new trading week. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.4% to 11,421 as of 7:40 a.m. on Monday.
The street will watch out for companies like Indiabulls Housing Finance, Union Bank of India, Rossari Biotech, Coffee Day Enterprises and Godfrey Phillips that reported their quarterly earnings late on Friday and over the weekend. IRB Infra, LIC Housing Finance, Globus Spirits, NOCIL are some of the non-Nifty 50 firms that are set to announce their financials today.
Orient Bell and BASF India will also be in focus on account of large trades that took place on Friday.
Globally, Asian markets have begun the new trading week on a muted note. Markets in Japan and Australia are little changed, while those in South Korea are fluctuating.
Futures on the Dow Jones are trading higher by 70 points. The index ended 0.7% higher on Friday, to erase its losses for the week.
West Texas Intermediate crude was flat at $42.34 per barrel, while gold fell 0.3% to $1,934.9/Oz.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
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