Closing Bell: Sensex, Nifty end flat amid volatility; IT, pharma stocks gain

Taking Stock: D-Street snaps 2-day winning streak; Nifty holds 11,500

Sectorally, the action was seen in consumer durables, IT, capital goods, and auto while mild profit taking was seen in banks, finance, metals, and energy stocks.... Read More

Nifty index opened positive but remained consolidative in between 11500 to 11570 zones for most part of the trading session. It formed a small Bearish Candle on daily scale as it closed below its opening levels but continued its formation of higher low for third consecutive session. It is finding hurdle at higher zones but at the same time decline is being bought into.

It is forming a Symmetrical triangle pattern on lower time frame as supports and resistances are coming closer to give a decisive price breakout. Now index has established an immediate support near to 11400 and 11333 while a hold above 11550 zones could again give an upper hand to bulls to drive the move towards 11650 and 11750-11800 zones.

Markets ended almost unchanged amid volatility, in continuation to the prevailing consolidation phase. The bias was upbeat in the beginning, following firm global cues but the news of India’s PMI data fell for the sixth month in a row in August dented the sentiments in the middle and remained range-bound thereafter. Amid all, the movement on the broader front kept the participants busy however a mixed trend was witnessed on the sectoral front wherein Consumer durable, IT and Capital Goods posted decent gains while Banks, Metal and Energy traded subdued.

The recent macroeconomic data suggests that economic revival would be gradual. Further, there are no positive domestic triggers to boost sentiments thus we suggest continuing with a cautious approach and keeping a close watch on the lingering broader tension between India and China for cues. We’re seeing selective sectors and stocks are still doing well so traders should spend more time in the stock selection process. Among the sectors, we feel the performance of the banking index would be critical for the next directional move in the benchmark.

Markets exhibited volatility and ended flat for the day, switching between gains and losses. However, global markets, especially Europe, were generally positive for the day, anticipating better economic data. Domestically, data emerged that the services sector had contracted for the 6th consecutive month, in spite of phased reopening of the economy in the last 2 months.

This has led to worries that the comeback, foreseen for the economy, could be long drawn out. Investors advised to remain light and keep booking profits.

Lupin Ltd announced the launch of Leflunomide Tablets USP, 10 mg and 20 mg, the company had earlier received approval from the U.S. FDA. Leflunomide Tablets USP, 10 mg and 20 mg, is the generic equivalent of Arava® Tablets, 10 mg and 20 mg, of Sanofi-Aventis U.S. LLC., and is indicated for the treatment of adults with active rheumatoid arthritis (RA). Leflunomide Tablets USP (RLD: Arava®) had an annual sales of approximately USD 42 million in the U.S. (IQVIA MAT June 2020). This is one of the significant approvals for Lupin, we continue with our Neutral outlook for Lupin limited.

The markets traded with lacklustre volumes with no definite direction. We continue being in a range between 11400-11600. If we need to see higher levels, we need to cross the resistance of 11600. That could take us to levels as high as 12000. A break of 11400 can take us to 11200-11250 levels.

Benchmark indices ended flat in the rangebound trading on September 3 with buying seen in the IT, auto and pharma stocks.

At close, the Sensex was down 95.09 points or 0.24% at 38990.94, and the Nifty was down 7.50 points or 0.07% at 11527.50.About 1452 shares have advanced, 1199 shares declined, and 176 shares are unchanged.

Bharti Infratel, Grasim Industries, Titan Company, UPL and Wipro were among major gainers on the Nifty, while losers were Bharti Airtel, ICICI Bank, Hindalco Industries, Axis Bank and Kotak Mahindra Bank.

Among sectors, buying witnessed in the IT, pharma, auto and FMCG pack, while bank and metal remained under pressure.

The management’s efforts to improve cost efficiencies through newly added capacities (4.2 MT) are expected to improve profitability, going ahead. Thus, we remain positive on the company considering its margin profile and healthy balance sheet.

The full benefit of expansion would be visible in FY22E. Factoring in the same, we upgrade the stock to buy with a revised target price of Rs 1800/share.

Strides Pharma Science's step-down wholly owned subsidiary, Strides Pharma Global Pte.Singapore, has received approval for Prednisone Tablets USP, 1 mg from the United States Food & Drug Administration (USFDA). The product is a generic version Meticorten Tablets, 1 mg of Schering Corporation.

Tata Motors sales in the domestic & international market for August 20 stood at 36472 vehicles, compared to 32166 units during August 2019.

Coal India reported a 25.9% YoY de-growth in consolidated revenues to Rs 18,487 crore for Q1FY21, as compared to revenues of Rs 24,939 crore for Q1FY20. Sales volume for the quarter was down by 21.5% YoY to 120.4mn Tons while production was down by 11.6% YoY to 121mn Tons.

EBIDTA for the quarter stood at Rs 3,052 crore down 53.8% YoY while EBIDTA margins contracted by ten percentage points to 16.5%.

Consolidated net profit for the quarter stood at Rs 2,078 crore as compared to profit of Rs 4,630 crore in the corresponding quarter previous year. Overall the Q1FY21 numbers are above street expectation which coupled with strong production and offtake numbers for the month of August should provide some tailwind to the stock in the short term.

With Rs 10,000-28,000 crore of public issues lined up, IPO season is about to hit D-Street

As per industry reports nearly 30-34 Companies have received approvals for initial public offerings (IPOs) totalling around Rs 33,500 crore, are yet to tap stock markets.... Read More

Jindal Steel & Power recorded a 38 percent YoY growth in consolidated steel sales to 8,36,000 tonne in August 2020 while consolidated steel production was up by 21 percent YoY to 8,25,000 tonne. JSPL’s standalone steel production was up by 18 percent YoY to 6,25,000 while standalone sales was up by 37 percent YoY to 6,82,000 tonne. It continues to report robust sales numbers given the company’s continued focus on exports which continues to drive growth despite slowdown in domestic steel demand. We believe that the company will continue to focus on exports for some time till the time domestic steel demand does not normalize.