News and Impact
Expect market to open on a positive note on account of global cues and smart recovery in the oil price. Crude oil gave back some of Monday’s 15% surge from $71/bbl to $64/bbl as Saudi officials said they had restored just under half the output lost at the Abqaiq plant, one of the world’s biggest oil facilities. The S&P 500 Index and Dow Jones gained marginally (0.2%) ahead of US Fed interest rate decision today.
As U.S. policy makers get ready to decide interest rates, investors are also trying to gauge the risk of a potential oil shortage weighing on a global economy that already seemed to be slowing down. Meanwhile, concerns linger about trade tensions, with U.S. and Chinese working-level negotiators set to resume talks in the next week, before a meeting of top officials in October.
Asian market are witnessing mixed bag. Nikkei. Kospi, Hong Kong, Taiwan Index are trading flat to positive. US Future declined 0.1%. SGX Nifty is up 45 points or 0.4%
Brent recovers from 71/bbl to $64/bbl- Brent Crude recovered after the Saudi officials said they had restored just under half the output lost at the Abqaiq plant, one of the world’s biggest oil facilities. Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.
Recover in the Brent Crude price and hope of stable Saudi oil production will be positive for the market. However, ahead of US Fed interest rate decision and GST council meeting (20th Sept) expected range bound market. Expect positive for HPCL, BPCL, IOC, Asian Paints, Ceat Tyre after recovery in oil price.
Brokers Radar - CLSA BUY GAIL TGT 165, Credit Swiss TGT on Reliance 1210, Dr Reddy Credit Swiss outperform with TGT at 3055, Credit Swiss Neutral on Britannia with TGT 2750 and AU SMALL Finance TGT by CITI at 720.
Sector watch - Tech, Pharma, Auto and OMCs
Actionable - BUY Infosys and Reliance
Watch on Reliance - Chairman Mukesh Ambani's stake in RIL has increased to 48.87% from 47.29% following a scheme of amalgamation – Positive for Reliance.
Watch on Tech stocks – Media news that the US Government may relax on HI B Visa – expect positive for Tech stocks – Infosys.
The Securities and Exchange Board of India (SEBI) has barred ousted CG Power and Industrial Solutions chairman Gautam Thapar and three others from accessing the securities market until further orders – Avoid on CG Power
Watch on Hotel stocks – Media news that the GST Council may cut GST rate from 28% to 18% of higher slab room tariff – Positive for Indian Hotel
Watch on Bajaj Finance – Board approved raising up to Rs 8500 cr via QIP – Positive for Bajaj Finance.
Media news that the Coffee Day signed defenit agreement with Blackstone to sale its Tech Park at Enterprise value of Rs2700cr – Positive
Rating agency S&P downgraded Glenmark Pharma from stable
Balmer Lawrie board deferred the proposals bonus issue – negative
Gujarat Alkalies commission 12.5mw solar power plant – Positive for Gujarat Alkalies
Ahluwalia Contracts wins orders Rs497cr – Positive
NCC – Aditya Birla Sun Life MF increased stake from 5.09% to 7.24% - positive sentiment
Watch on Dixon Tech – Media news that the 5% import duty cut on LED TV may positive on Dixon Tech
Nifty slipped nearly 200 points (1.7%) to close 2-week low on fears that a spike in crude oil prices following attacks on Saudi oil facilities could hurt the economy further. India’s current account and fiscal deficit could take a hit if oil prices continue to rise after the attack, RBI Governor Shaktikanta Das had said. Auto stocks declined sharply after media report that the GST Council may not be reduce GST rate. STC, MMTC dip up to 18% on reports that the govt plans to shut operations. CG Power hits 5% upper circuit after KKR India picks up 10% stake. FIIs were net sellers worth Rs808cr yesterday.
US Fed rate decision at 11.30pm today (ISD) - The US Federal Reserve is widely expected to lower U.S. interest rates in response to slowing global economic growth and muted inflation. Chairman Jerome Powell will hold a post-decision press conference Wednesday at 11.30PM ISD. Commentary by US Fed chairmen will be important for the global market.
Others like Bank of Japan monetary policy decision is on Thursday, Bank Indonesia and Bank of England also decide policy on Thursday. India GST Council meeting will be held on 20th September
USDINR spiked to nearly 72 of 2-week high. Rising USDINR likely to be positive on Tech and Pharma stocks.
Info Edge Says Further Worsening Of India Slowdown Could Impact Business - Info Edge (India) Ltd. said further worsening of the economic slowdown in India won’t bode well for its business.“If the slowdown worsens or is sort of long, of course our business will be impacted.
NHPC board has approved the proposal for raising of debt up to Rs2,500cr NCD, ECB.
TRF intimates of termination of share purchase agreement by Canyon - Shares of TRF slipped yesterday after the company announced that Canyon Point Investment expressed its inability to complete the share purchase agreement which was signed by TRF on May 17 - Avoid
Bharti Airtel fell over ~2% intraday on Tuesday after a CNBC report said that talks to sell stake in merged tower company were ongoing. The report said that the company was in talks to sell stake in the merged company of Bharti Infratel and Indus Towers – We are positive on Bharti Airtel
Expect negative on Auto stocks - Media news that the government may not cut GST rate on 20th GST council meeting. It may negative on Hero Motocorp, Maruti, M&M, Tata Motors - However traders wait till 20th September outcome of GST meeting
Tata Power to sell entire stake in South African JV for $106mn - Positive for Tata Power to exit non core business
Glenmark announced that the US FDA has granted Orphan Drug Designation to its bispecific antibody candidate GBR 1342 for the treatment of patients with multiple myeloma who have received prior therapies - stock declined sharply. Current valuation is attractive buy
Defence PSU BEML and Wipro Infrastructure Engineering signed a MoU to work together in aerospace, industrial automation, 3D printing, artificial intelligence and hydraulic system engineering - Positive for BEML.
Asian Paints announced that Asian Paints Internationa, Singapore, wholly owned subsidiary of the company, has divested its entire stake in Berger Paints Singapore, owned subsidiary by Omega Property Investment, Australia - Positive for Asian Paints. However, higher Oil price is a concern for Asian Paints
Overseas Singapore based fund Amansa Capital raises Intellect Design stake to 5.06% from 4.92% - Positive for Intellect Design
SAIL - Central government allowed the state-run producer of the alloy to sell 70 million tonnes of iron ore from its captive mines - News is positive but slower demand and reported poor quarterly results - Avoid.
Tata Comm a leading global digital infrastructure provider and CreditPilot, a financial technology company specializing in digital and mobile financial services, transactional and payment infrastructure, have come together to offer mobile and digital financial services solutions to mobile operators - Positive for Tata Comm.
Appellate Tribunal for Electricity allows Adani Power’s compensation claim for non-availability of supply from Coal India, and use of alternate coal by company in respect of its agreement with Rajasthan state distribution company for supply of 1,200 megawatts of power - Avoid on Adani Power.
Avenue Supermart - SEBI approval on minimum public holding - Positive for Avenue Super Mart after the SEBI approval.
L&T Finance approves raising up to Rs150cr via preference share - We are long term positive on L&T
Westlife Development says company shares now trading on NSE – No change its fundamental but sentiment may improve for trading on NSE.
Dividends – Engineers India, Relaxo Footwear, Vardhaman Textiles. Board Meetings – Indian Bank, OBC and United Bank of India, AGM – Ashoka Buildcon, Balmer Lawrie, Finolex Cable, Hindustan Aeronautics, Indian Energy, Inox Leisure and National Aluminum