Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services:
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.
Ajit Mishra, VP - Research, Religare Broking:
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.
Vinod Nair, Head of Research at Geojit Financial Services:
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.
Yash Gupta, Equity Research Associate, Angel Broking:
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.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
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.
Market close:
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.
ICICIdirect on JK Cement:
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 receives USFDA approval
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 data:
Tata Motors sales in the domestic & international market for August 20 stood at 36472 vehicles, compared to 32166 units during August 2019.
Jyoti Roy, DVP- Equity Strategist, Angel Broking:
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
Jyoti Roy , DVP- Equity Strategist, Angel Broking:
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.
Most active stocks on NSE in terms of volumes
NBCC signs MoU eith Election Commission for office building in Delhi for Rs 150 crore
: NBCC has signed the MoU with Election Commission of India for planning, designing and construction of “Office Building in Dwarka, New Delhi” on September 1, 2020 wherein NBCC will work as Project Management Consultant. The likely estimated cost of the project would be Rs 150 crore, the company said in an exchange filing.
Keshav Lahoti, Associate Equity Analyst, Angel Broking
: Rossari Biotech is rallying on the news that Plutus Wealth Management LLP acquired 3 lakh shares of the company at Rs 773.82 per share. Currently, the stock is trading twice the issue price i.e. doubling the wealth of investors in less than 2 months. Market is positive on the stock considering that it has a strong balance sheet, good return ratios, outlook of the business is positive, proven track record of robust financial performance and surge in demand of home and personal care segment (sanitizers, cleaning products) due to COVID-19. The stock performance will depend on how fast the company will be able to ramp up the production on the new capacity and also on the EBIDTA margins.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
: Crude oil prices traded lower with NYMEX WTI Crude oil prices falling by nearly 0.8 percent to USD 41 on Thursday. MCX Crude oil September futures were trading down by 1 percent to Rs 3028 by noon. Crude oil prices traded down despite bullish weekly inventory data on lower demand amid slower refinery run rates. The weekly oil stockpiles fell by 9.3 mb last week. Due to shutdowns ahead of Hurricane Laura, US refinery utilization rates fell by 5.3 percentage points to 76.7 percent of total capacity. We expect oil prices to trade sideways to down for the day with MCX Crude oil September futures has support at Rs 2970 with resistance at Rs 3090.
Yash Gupta, Equity Research Associate, Angel Broking
: The Indian indices are range bound, up 18 points and 4 points respectively. The market opened higher on back of positive global market clues though it has sold off somewhat post that. Sensex has managed to hold on the back of defensive stocks. We expect the broader market to see some pressure. Global markets continued its rally yesterday as the Dow Jones rallied by 454 points while the NASDAQ was up by 116 points.
Rupee at close
Rupee ends at 73.47 per US dollar against September 2 close of 73.03 per US dollar. The local currency posted single-biggest session fall against US dollar since May 4.
Tata Power bags order
: Tata Power Company has bagged order worth Rs 490 crore from Defence Ministry. "We are pleased to inform you that the Strategic Engineering Division (SED) of the Company has signed the Pinaka 3 contract with the Ministry of Defence, Government of India. Pinaka Multi Barrel Launcher Rocket System is an all-weather indirect fire artillery rocket system," it said in an exchange filing.
European Market trade firm:
Gokul Refoils buyback to open on Sept 11:
The company proposed to buyback of 3,29,00,000 equity shares of face value Rs 2 each for cash at a price of Rs 12 per equity share for cash aggregating upto Rs 39,48,00,000 through Tender Offer route.
Motilal Oswal of ONGC:
Although gas production has been delayed, we expect a significant jump in ONGC stock over the next 3-4 years, led by the various projects that ONGC has been working on. Oil production is expected to remain flat. Factoring in the delay, we have revised down our gas production estimates for FY21/FY22E to 24.7bcm/30.2bcm (from earlier 26.7/35.2); our estimates for oil at 23.6mmt/24mmt remain unchanged.
ONGC is trading at 3.0x FY22E EV/EBITDA and 3.8x FY22E P/E. We value the company at 10x FY22E adj. EPS of Rs 7.8 and add value of investments to arrive at a target price of Rs 105, maintaining a buy call on the stock.
Gateway Distriparks looks options to restructure group companies:
Company board approved to explore various structures for streamlining the businesses currently being carried out by different group entities of the Company including Gateway Rail Freight Limited, Gateway East India Private Limited and evaluation of options for undertaking internal group restructuring as may be permitted under applicable laws, including but not limited to mergers, reverse merger, demerger or any other form of business restructuring which is beneficial to the company and all stakeholders involved.
BSE Healthcare Index added 1 percent supported by the Opto Circuit, Vivimed Lab, Caplin Point:
Page Industries Q1
The company's net loss was at Rs 39.6 crore versus profit of Rs 111 crore and revenue was down 65.9% at Rs 284.4 crore against Rs 835 crore, (YoY), reported CNBC-TV18.
Power Mech bags order
Power Mech Projects share price gained nearly 10 percent intraday on September 3 after company received letter of intent/L1 intimation for the work worth Rs 1,311.70 crore.
Dr Reddy's launches Concerta generic tablets
Dr. Reddy’s Laboratories announced the launch of Methylphenidate Hydrochloride Extended-Release Tablets USP, 18 mg, 27 mg, 36 mg and 54 mg, a therapeutic equivalent generic version of Concerta (methylphenidate Hydrochloride) Extended-Release Tablets, 18 mg, 27 mg, 36 mg, and 54 mg, approved by the US Food and Drug Administration (USFDA).
Jyoti Roy , DVP- Equity Strategist, Angel Broking:
US class 8 truck orders were up sharply by 90% YoY and 3.0% MoM for the month of August 2020 to 20,500 units which is positive news for forging companies like Bharat Forge and Ramakrishna forging which supplies components for US class 8 trucks.
This is the second month in a row that class 8 truck orders have been above 20,000 units and are expected to stay in the range going forward as the US economy is gradually opened up.
While the domestic MHCV industry is expected to remain muted for some time, greater demand from the US should provide support to forging companies.
TCS gets order from ABB Info Solutions
Tata Consultancy Services has been selected by ABB Information Systems for transforming its hosting infrastructure and cloud service management. The Swiss-headquartered technology leader identified TCS as its service partner as a part of the organization’
endeavor to Rationalizing IT Operations and intendsto increase the flexibility.
JSPL production and sales data
Company's August consolidated production was up 21% YoY at 8.25 lakh tonnes versus 6.81 lakh tonnes and sales were up 38% YoY at 8.36 lakh tonnes versus 6.06 lakh tonnes.
August Services PMI: Playing catchup: Barclays
The services PMI improved in tandem with the manufacturing PMI in August, though it continues to lag manufacturing activity.
With new relaxing of activity restrictions in September, we expect services to improve faster than manufacturing in the coming months.
Jyoti Roy, DVP- Equity Strategist, Angel Broking:
The central government announced that domestic airlines will now be allowed to operate at 60% of their pre-Covid level capacity as compared to 45% earlier. After resuming domestic passenger flights in India from the 25th of May the Civil Aviation Ministry had allowed Indian airlines to operate at 33% of their pre-COVID levels which was increased to 45% from the 26th of June.
While this move is sentimentally positive for Airline companies we believe that demand will remain muted in the near future and is expected to pick up post the festive season and maintain a neutral rating on the sector.
Markets will be keenly awaiting data for the domestic aviation industry for the month of August which will be released in a few days by the DGCA.
Nifty Bank Index down 1 percent dragged by the HDFC Bank, Bank of Baroda, Federal Bank:
Zydus Cadila gets final USFDA approval
Zydus Cadila received final approval from the USFDA to market Midodrine Hydrochloride Tablets (US RLD- ProAmatine Tablets) in the strengths of 2.5 mg, 5 mg, and 10 mg.
Rupee extends losses
:Indian rupee hasextended the early losses and trading near the day's low at 73.36 per dollar, amidrangeboundtrading seen in the domestic equity market.
Market Updates
Benchmark indices are trading flat with positive bias with Nifty around 11550.
At 11:21 IST, the Sensex was up 24.82 points or 0.06% at 39110.85, and the Nifty was up 20 points or 0.17% at 11555. About 1395 shares have advanced, 769 shares declined, and 122 shares are unchanged.
Jyoti Roy, DVP- Equity Strategist, Angel Broking:
The central government announced that domestic airlines will now be allowed to operate at 60% of their pre-Covid level capacity as compared to 45% earlier. After resuming domestic passenger flights in India from the 25th of May the Civil Aviation Ministry had allowed Indian airlines to operate at 33% of their pre-COVID levels which was increased to 45% from the 26th of June.
While this move is sentimentally positive for Airline companies we believe that demand will remain muted in the near future and is expected to pick up post the festive season and maintain a neutral rating on the sector.
Markets will be keenly awaiting data for the domestic aviation industry for the month of August which will be released in a few days by the DGCA.
Buzzing Stock
Bharti Infratel share price jumped over 4 percent, rising over 8 percent in the last two days after the company got a go-ahead from the board for Indus Tower merger. Bharti Infratel has informed the exchanges that its Board of Directors discussed, in a meeting held on August 31, the scheme of arrangement with Indus Towers and related agreements, and has decided to proceed with the merger.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking
: Market seems to be in a wait and watch mode. Some of the geopolitical concerns with respect to India-China border are looming over. In addition, the Supreme Court’s verdict on moratorium will be out anytime soon. All these factors have created some uncertainty among the market participants and this is clearly getting reflected in last two day’s price action. Going ahead, it would certainly be very intriguing to see how things pan out in next couple of days. Meanwhile, 11550 followed by 11650 are the levels to watch out for in the upward direction; whereas on the flip side, 11450-11400-11325 is the cluster of supports. Traders are advised to keep following stock centric approach by maintaining strict stop losses. Although the overall undertone is still strongly bullish, it’s better to stay light till the time the uncertainty disappears.
Buzzing Stock
UPL share price gained over 4 percent after global research firm CLSA maintained a buy call on the stock. The global research firm has maintained a buy call on the stock with target at Rs 620 per share, according to a CNBC-TV18 report.
PMI data
India August Services PMI was at 41.8 versus 34.2 and India August Composite PMI was at 46 versus 37.2 (MoM), reported CNBC-TV18.
Nifty IT index up over 1 percent supported by the Wipro, TCS, Infosys, Coforge:
Samba Financial Group selects iGTB of Intellect Design Arena
Samba Financial Group has selected iGTB’s Digital Transaction Banking (DTB) solution of Intellect Design Arena.
The bank has selected DTB to power its digital transformation initiatives to strengthen its corporate offering and help attract more customers.
The solution will help the bank become more competitive, streamline internal processes and, in turn, generate additional revenue streams.
Large and mid-sized Indian private banks poised to gain more market share: Fitch Ratings
Indian private banks, which have stronger loss-absorption buffers than the public sector banks, are likely to gain market share from their state-owned peers in the medium term, says Fitch Ratings.
Private banks' loss absorption buffers, in particular enhanced capital bases, strengthen their ability to recognise losses up-front with less disruption in their efforts to accelerate market-share gains. However, we do not expect immediate gains as the sector's credit growth is likely to remain subdued, and will only resume meaningfully once a sustained recovery from the pandemic gets underway.
Embassy REIT to join FTSE EPRA Nareit Global Emerging Index:
Embassy Office Parks REIT announced that the REIT will be included in the FTSE EPRA Nareit Global Emerging Index with effect from September 21, 2020.
The changes were announced by FTSE Russell as part of the FTSE EPRA Nareit Global Real Estate Index Series September 2020 quarterly review on September 2, 2020.
Rupee Opens
Indian rupee opened 20 paise lower at 73.23 per dollar on Thursday against previous close of 74.03.
Auto Index rose 1 percent led by the Motherson Sumi, Ashok Leyland, Tata Motors:
SC Hearing on Loan Moratorium
The Supreme Court (SC) will resume hearing on a batch of petitions seeking interest waiver on loan moratorium granted by Reserve Bank of India (RBI).
The SC will resume hearing the case at 2 pm on September 3. Solicitor General Tushar Mehta will continue presenting his arguments.
Senior Advocate Rajiv Dutta, who appeared for a petitioner, on September 2 said "interest on interest is absolutely and prima facie wrong and they cannot charge it".
The SC has previously said there is "no merit in charging interest on interest".
The RBI had on June 4 said lenders will lose Rs 2 lakh crore if interest is waived during the moratorium period.
ICICIdirect
:
The dollar strengthened overnight, helped by positive US manufacturing data. However, investors will now be looking to see if the ECB will follow the US Federal Reserve in shifting its policy towards inflation, as it reviews its monetary policy next week.
The dollar-rupee September contract on the NSE was at 73.35 in the last session. The open interest in the September series declined 1.00% while it increased 0.08% in the next series.
