News and Impact
Expect market to open on flat note on account weak opening in the Asian markets. Asian stocks traded lower in the morning as U.S. President Donald Trump threatened to raise tariffs on Chinese goods if the two economic powerhouses do not strike a deal. Both Hong Kong and Nikkei Index declined over half percent each. SGX Nifty declined 38 points or 0.3%.
The Nasdaq Composite climbed to a fresh record on the back of gains in megacap tech companies even as the Dow Jones Industrial Average sank following disappointing reports from retailers. Gains in Facebook, Broadcom and Tesla lifted the Nasdaq while Home Depot was the biggest drag on the Dow Jones by 0.3% after the company cut its annual forecast for the second time this year
Traders buy on dips in the market concern of trade war. FIIs were net sellers nearly Rs4000cr in the four trading sessions, yesterday was net sellers worth Rs915cr. However, positive factor that the fall in USDINR and OIL price, good quarterly results and continued government reforms.
Reliance – Credit Swiss TGT 1400, Morgan Stanley overweight TGT 1479. IndiGo – Outperform by Credit Swiss TGT 1900, Tata Steel sell by Citi with TGT 330. Apollo Hospital TGT by Nomura 1787.
Sector watch – Telecom, Banking and PSU
Actionable – Buy Reliance (Reliance GDR gained over 6%), SBI and Axis Bank. Expects negative for metal stock concern of trade war.
Market summary – Govt to bring down its stake below 51 pc in CPSEs soon, Reliance Jio to hikes tariff, Shree Cement announced QIP with a floor price at Rs19806.46 a share (Yesterday closing Rs20007), Bharat Forge and Motherson Sumi may positive after Germany Auto sales spikes. Britannia hold back product launches, Yesterday PE funds sold 3% SBI Life via block deal for about Rs4635cr. Yes Bank NPA divergence Rs632cr is a concern.
Cabinet Commeitte and SEBI board meeting will be held today. Cabinet may disinvest of five PSU stocks like CONCOR, BPCL, SCI – expects momentum on PSU stocks.
SEBI meeting will be held today at 11pm and press conference at 4.30pm on PMS and right issue are main agenda.
Brent Crude fell to below $61/bbl concern of trade war between US-China. Fall in oil price may positive on Oil marketing companies – BPCL, HPCL and IOC.
Watch on Lupin - Lupin launches generic Hypokalemia drug in US – Positive for Lupin.
Siemens reported net profit Rs334cr, up 18% and EBITDA margin 21% vs 22.4% previous year.
Britannia – Britannia has postponed product launches on account of consumption slowdown in the country which is said to expected to revive in the next 9-12 months – Stock has rich valuation, correction will be better entry points
Dewan Housing update - Media news that the Lenders to ask the RBI to refer Dewan Housing to the NCLT after rules were changed last week to bring NBFC companies with in the ambit bankruptcy code. DHFL has debt Rs85000cr while Rs38000cr exposure to the banks – NCLT refer will help steamline the debt repayment process. – It will be positive on Banks like SBI.
Watch on Dixon Tech - Media news that the South Korean TV maker Samsung to re-start TV production after a year. Company likely to sign a deal with Dixon Technology to manufacture TV set of 55 inches – News is positive for Dixon Tech.
PSU stocks expected to momentum like Engineers India, BEL, BEML, SCI after the news that the Cabinet likely to consider proposal to bring down its stake below 51 pc in CPSEs soon (central public sector enterprises) – Media report – Expects positive for PSU stocks.
The Cabinet headed by PM Narendra Modi is likely to take a call on the merger of public sector general insurance companies. Last week, FM said the Govt. would move forward on the merger of the three state-owned general insurance companies - National Insurance, United India Insurance and Oriental Insurance - as announced in the previous Budget. For example, the sources said, if LIC picks up stake which lowers the government holding below threshold level of 51 percent. The Govt. fixed an ambitious disinvestment target of Rs 1.05 lakh crore for the current financial year, up from Rs90,000 crore projected in Interim Budget 2019-20 in February - It will be positive for economy to bring down fiscal deficit.
Yesterday, there was renewed buying in Reliance, Bharti Airtel, Bharti Infratel, SBI, Infosys and HDFC Bank which lifted Nifty by close to half a percent or 56 pts to end at 11940. Sentiments were boosted after telecom major announced tariff hike. Shares of PSU banks advanced as the SC ruled in favor of financial creditors in its verdict on the Essar Steel insolvency case. Moreover, fall in oil price and USDINR also boosted the market sentiments. However, Nifty 500 stocks advance decline ratio was 1:1 and India VIX declined 2% at 15.42.
Telecom subscription (September) - Vodafone losers 25.8lakh subscribers, Bharti Airtel losers 23.8lakh subscribers while Reliance add 69.8lakh subscribers - Big positive on Reliance
PIT news that the Reliance Jio to hike tariffs next - Positive for Reliance
Watch on Shree Cement - Company announced QIP with a floor price at Rs19806.46 a share (Yesterday closing Rs20007) - We are neutral on the stock
Vargin Atlantic expand technology partnership with TCS - Positive for TCS
ICICI Bank denies report of raising funds via QIP, earlier media report that the ICICI Bank may coming out a QIP worth Rs20000 cr. However, we are positive on the stock. Company reported strong Q2 results and attractive valuation.
Watch on Bharat Forge - Yesterday German Index surged over 1% after a strong Auto monthly sales volume. October sales volumes spiked over 12% on YoY basis.
Yes Bank founders firm Yes Capital sells 0.8% in Bank Nov 13-14 - Positive for Yes Bank .
Media reported that the government is planning to cut stake on PSU Banks to below 51% stake - Positive for PSU Banks.
Prestige Estates Projects said in the press note on Monday post-market hours that it has acquired 28.99% stake in a commercial project in Mumbai of DB Realty - Positive for Prestige Estates.
Dilip Buildon wins orders worth Rs2122cr for Nigahi projects in MP - Positive
Watch on small private Bank (DCB, Federal Bank) ahead of CSB IPO update - CSB Bank to Sell Shares at 193-195 Rupees Each in IPO - CSB Bank, formerly called Catholic Syrian Bank, proposes to raise as much as Rs240mns selling new shares in an initial public offering; existing investors will offer for sale 19.78 million shares in the IPO. Offer opens Nov. 22 and closes Nov. 26. IPO valued at about Rs4.1bn at the top end of price band. Retail investors can bid for minimum 75 shares of face value Rs10
Watch on Spice Jet after improves market share - The airline saw a rise in market share from 14.7% in Sep'19 to 16.3% in Oct'19 - Positive for Spice Jet.
Watch on Banks positive after cut FD rate - After the RBI rate cut in October, all the major banks are slashing interest rates on fixed deposit (FD) on a regular basis. SBI, HDFC Bank, Axis Bank, PNB, Yes Bank, Bank of Baroda (BoB) Kotak Bank and IDBI Bank are some of the banks which tweaked FD interest rates for different tenure this month cut fixed deposit rate - Fixed deposit interest rate cut will improve margin on banks.
JSPL-Sarda Mine Case : SC defers hearing over movement, sale of iron ore of Rs 2000 cr by JSPL – Stock declined 3% yesterday after the news. However, we are positive on the stock.