News and Impact
Expect market to open on a flat note on account of global cues. US Dow gained 1% after the Trump administration signaled progress on trade negotiations and U.S. Commerce Secretary Wilbur Ross said the nation will delay restrictions imposed on some business operations of China’s Huawei Technologies Co for 90 days. Moreover, US 10-Year Bond Yield recovered from 1.54% to 1.60%.
European market gained 2% each yesterday after the Germany said to stimulate for the country. Asian markets open on a positive note after China announced to cut borrowing cost boost economy. Nikkei and Tiwan Index gained marginally. Hong Kong Index declined 0.5%. SGX Nifty declined 25 points or 0.2%. US Dow Future declined 0.1%
Expect higher intra-day volatility in the market. Traders buy on dips in the market. USDINR surged to 6-month high of 71.43 which is a major concern in the market. Traders watch on USDINR trend today. Positive factor that the above normal monsoon and Brent Crude fell to below $60/bbl. FIIs net sellers marginally of Rs309cr yesterday.
Watch on Mahanagar Gas – Media news that the BG Asia global fund to sell 10% stake of Mahanagar Gas worth Rs733. – Any decline will be buying opportunity, company reported impressive Q1 results.
Sector watch – Private Banks, NBFC
Buy – Reliance Industries, Zee Ent and IndusInd Bank
Momentum BUY – Piramal Enterprices and KEC International
Brokers Radar – NTPC CLSA BUY with TGT 165, Credit Swiss Reliance Ind TGT 1210 from 1028, Va-Tech TGT reduce Nomura from 550 to 445, L&T Infotech TGT 1900 by Credit Swiss
Yesterday, Nifty gained marginally by 7 points, Nifty pared it gains from the intra-day high due to selling pressure in the last hour. Auto, Banking, Metal and FMCG stocks declined from the intra-day high. FIIs were marginally net sellers of Rs306cr yesterday.
Watch on Zee – Media news that the Essel group set to repay Mutual Funds Rs2600cr this week out of Rs4200cr it released by selling 11% in Zee Entertainment to global fund Invesco Oppenheimer. NBFC will get Rs1100cr. Essel Group to repay MFs Rs3700cr more – It will be positive for Zee group stocks which will repay partial debt to MFs and NBFC.
REC Plans to sell up to Rs55bn bond issue - Positive for REC
IMD says Monsoon rainfall is 2% above normal – Normal monsoon will be positive sentiment in the market. FMCG, Auto and NBFC stocks likely to be positive.
Market summary – Monsoon rainfall above 2% normal, KEC International bagged large order, USDINR 6-month high, Avenue Supermart AGM today, Reliance Jio dominated market shares of telecom subscriber, Indiabulls Housing USD Bond Set for Longest Losing Run in Month, Mahanagar Gas stake by BG Asia.
IPO Listing – Sterling and Wilson will be listing today. It subscribed by 85%.
Vodafone Idea : Chief Executive Officer Balesh Sharma stepped down from the role with immediate effect due to personal reason – Negative for Vodafone.
DHFL defaulted in payment of non-convertible debentures and commercial papers worth Rs 1,571 crore, which were due on Aug. 19 – Avoid on the stock
Watch on Avenue Super mart, HEG and IDBI Bank - Company's AGM will be held today
Watch on Quess Corp - Company's EGM will be held today.
Watch on Reliance Industries – Morgan Stanley overweight on the stock – (Media report) - Reliance Industries' faster asset monetisation, together with the rebalancing of oil refining market and cheaper feedstock, could help drive upside in company's price-to-earnings (PE) ratio, Morgan Stanley said in a report. Including Reliance Industries (RIL) in its 'Three in Three' report for Asia Pacific, the brokerage firm upgraded the company stock to 'overweight'.
Reliance continued to increase mobile subscriber - As per Trai data, Reliance Jio added over 82.6 lakh users in June, while Bharti Airtel and Vodafone Idea continued to lose subscribers - 41.75 lakh combined - during June. Also, Jio has gained 82.68 lakh customers in June, higher than 81.80 lakh additions it had notched in May – Positive for Reliance Industries.
Sonata Software’s European arm completed the sale of its entire stake in Izara Aps – Positive for Sonata Software.
Crompton Greaves Consumer Electricals: Life Insurance Corporation of India reduced its stake in the company from 5.2 percent to 3.1 percent via open market sale - We are positive on Crompton
Hindalco : LIC increased its stake in the company from 8.3 percent to 10.4 percent via open market purchase. – positive for Hindalco.
MEP Infra Developers promoters Anuya Mhaiskar acquired 26,000 shares on Aug. 19 – Positive for MEP Infra after promotes bought shares from market.
Outcome of RBI Governor press meeting today - RBI expects government capital infusion in banks to happen soon. Objective of new stressed loan resolution circular is to ring-fence future build up of bad loan stress. Growth is a matter of highest priority, Das says, adding that implementation of reforms isn’t complete and remains uneven in the non-banking space. Says there’s a need to strengthen corporate governance structure in banks, and RBI has sent its suggestions to the government on the matter - Expect positive for Banks – We are positive on SBI in the PSU Banking space and positive on private Banks like Axis, ICICI and HDFC Bank
Rating agency CARE says that the India’s jobs scene -- with unemployment at a 45-year high -- is looking gloomy with hiring activity slowing across most sectors - Cncern in the market and may impact on growth in economy.
KEC International bags orders worth Rs850cr - positive for KEC International, strong order book and reported good quarterly results, will be positive for the company
Indiabulls Housing USD Bond Set for Longest Losing Run in Month - Copany’s $350m 6.375% 2022 notes fell 0.2 cents on the dollar to 90.7 cents in Hong Kong. Bonds have declined for a fifth day, the longest losing streak since late July. Moody’s last week downgraded Indiabulls Housing’s rating to Ba2 from Ba1 - Negative for India Bull Housing.
India Ratings Assigns Sterlite Power Grid Ventures’ NCDs Final ‘IND A+’/Stable – Positive for Sterlite Power.
CARE Ratings cut Tata Motors’ long-term bank facilities and NCDs to AA- from AA – Tata Motors has already declined 40% from the recent high. No major impact on the stock
Glenmark Pharma received regulatory approval to market a combination of Remogliflozin medicine in India. The drug is indicated for treatment of type-2 diabetes mellitus in adults - Stock declined in the last few days after announced poor Q1 results. However, current risk reward ratio is favorable - BUY for long term prospects
Government is expected to notify rules and other details for onshore dollar-rupee derivative trading to be settled in foreign currency – Measures has been taken to control fluctuation of Rupee against dollar – Expect stablility on USDINR.
Dr Reddy's launches biosimilar of Roche's Avastin in India – Positive for Dr Reddy.
Cholamandalam expects to get home finance unit license by March, company's target buyers of low cost home, company to offer home loans of as much as Rs15lakh - Positive for Cholamandalam Finance as entering in the housing finance segment
Pennar Industries wins orders worth Rs538cr. - Positive for Pennar Industries after bagged large orders
CRISIL downgrades long term ratings of DCM Ltd to D from BB+/Watch Negative - Negative for DCM Ltd.
L&T allots Rs14bn of 6.77% NCD - Positive for L&T at lower interest rate. Strong order book and reported good Q1 results will be positive for the company
HCL Tech sign pact with MADC to expand Mihan Cmpus, Company says campus will employ 8000 people when operational.
Dividends – Astrazenaca Pharma, Balkrishna Industries, Bharat Electronics, City Union Bank, KPR Mills, Sun Pharma and Sun TV