Information News and impect

News and Impact

Expect market to open on a positive note on account of global cues. U.S. Dow jones gained over half percent as renewed signs of easing trade tensions diverted attention from the swirling impeachment drama in Washington. SGX Nifty is up 0.3%

Asian market like Nikkei and Hong Kong Index gained half percent after S&P 500 halted a three-day slide, with tech and bank shares pacing the gain. Equities rattled by the political turmoil in America turned higher after President Donald Trump suggested a trade deal with China was possible and then moved toward a pact with Japan. The advance recouped most of Tuesday’s drop sparked by the start of a formal impeachment inquiry of Trump. US Future currently declined 0.1%.

European market declined 1% each amid rising concern that growth is flagging. U.K. shares fell as parliament reconvened amid Brexit turmoil.

Expect market to be volatile on being the September F&O expiry today. Short covering may not be ruled after the government announced Rs1.46 lakh cr stimulus. Government cut tax rate from 30% to 22% will be big positive for the market. Both Nifty and Bank Nifty corrected in the last two trading session. Traders buy on dips in the market.

Watch on oil marketing companies – Brent Crude declined sharply to below $62/bbl from a recent high of $71/bbl on account of soft global demand and rising US inventory. Moreover, Saudi Aramco said it was ahead of schedule in restoring output that was reduced by a drone attack earlier in September – Positive for HPCL, BPCL and IOC.

Major events today – September F&O expiry and US-India trade deal negotiation in US today

Sector watch – Tech, Oil & gas, metal, Pharma, Airlines and Private Banks

Actionable – BUY IOC, Aurobindo Pharma and Hindalco.

Brokers Radar – Morgan Stanley overweight on IndiGo TGT 2261, Goldman upgraded oil marketing companies – IOC TGT 175, BPCL TGT 575 and HPCL TGT 370. CITI TGT on Container Corp at 621 and Credit Swiss Neutral to underweight Jubliant Food at 1200

Market summary – Government disinvestment Concor, BPCL, SCI. Allcarogo to buy Gati’s 6% stake. M&M and Ford to form JV, Hero Motocorp expects 10% growth on ahead of festival sessions and Essel Group lenders agree to extend timeline of debt payment.

Yesterday, Market resumed its downward journey after its recent massive rally, as investors booked profits ahead of F&O expiry tomorrow and political uncertainty in US. Nifty was down by 148 points (1.4%) to close at 11440. Bank Nifty fell 2% and slipped nearly 1000 points (3.2%) over the last two trading sessions. PSU Banks, Auto, Realty and Metal stocks were major losers today. Both FIIs and MFs were net sellers Rs342cr and Rs762 respectively.

Watch on Pharma stocks - The government is considering is that if an Indian company manufactures a tablet made from a locally manufactured API (active pharmaceutical ingredient), then the drug will be exempted from DPCO (Drug Price Control Order). However, drugs made from APIs that are imported will be under DPCO – It will be positive for domestic Pharma companies like Aurobindo Pharma, Divi’s Lab, Sun Pharma

Watch on 12 companies will be out from October F&O – Twelve companies will be exclude from October F&O series (Today last day of Sept F&O series) – Reliance Cap, others ADAG stocks, IDBI Bank, MCX, Dewan Housing, Hindustan Zinc.

Watch on NTPC – Company pact with northern state of Himachal Pradesh to build two hydroelectric projects of a combined capacity of 520 MW, NTPC – Positive for NTPC.

Sterlite Tech sign pact to acquire 100% stake in Impact Data Solution with an enterprises value Rs106cr – Positive for Sterlite Tech.

Astrazeneca India gets nod for type 2 diabetes drug import, sale - Positive for Astrazeneca

Government starts strategic sale process in BPCL CONCOR and Shipping Corporation - Positive for BPCL, SCI and CONCOR : Government holding BPCL stake 53% (Market cap Rs1lakh cr ), Concor holding by govt 54% (market cap Rs36600cr) and SCI holding by Govt 64% (market cap Rs18236cr)

Reliance Industries plans to spend heavily on upgrading its oil-to-chemicals business after repaying its debt - Positive for Reliance

Allcargo Logistics is in talks to buy a stake in smaller rival Gati.  Allcargo is in discussions to acquire Gati, that’s 6% owned by Goldman Sachs Group Inc., at an equity valuation of about Rs13bn - More than double current market cap of GATI (Current market Cap Rs610cr).

CG Power – Board has appointed Ashish Kumar Guha as the chairman of the company with effect from 24th Sept – Positive development but poor balance sheet is a concern – Avoid

Pharma major Cipla launched new  generic drug daptomycin  in US – Positive for Cipla

Havell’s India and TATA Power MoU - DDL Come Together to Ensure Safety Against Hazards of Electricity - The partnership shall ensure that Havells circuit protection devices, electrical leakage circuit breaker (ELCB) will be made available across all Tata Power-DDL Customer Care Centers at subsidized price from Oct. 1, 2019 onwards – Positive for Havell’s India

Maruti chairman says in the morning interview that the retail sales this month may go up to 20% Month on Month - Positive for Maruti on hope of improve September monthly sales.

GSK Pharma to suspend release distribution & supply of Ranitdine to all markets including India.

TCS announced that QNB Group the largest financial institution in the Middle East and Africa, has selected the TCS BaNCS™ GlobalSecurities Platform to support the digital transformation of its capital markets - Positive for TCS. Stock gained 2% after the news. 

Protests by workers at Coal India on Tuesday hit output by about 56%, a senior company official told Reuters - It is a short term impact. Any sharp decline will be a buying opportunity.

Global steel prices dropped 13% in the first eight months of 2019 due to weak demand, unseasonal jump in global inventory levels (up ~35% through August) and trade tensions. This was despite a whopping 56% run-up in global iron ore prices during the same period. Steel prices in India mirrored the trend, falling 10% from Rs 42,000 per tonne in January to Rs 38,000 per tone in August 2019 – CRISIL Report

Zee Entertainment update - Essel’s lenders have unanimously agreed to extend the timeline, enabling the group to optimize value from sale of assets. The group was in “steady and progressive” talks with all lenders; remains confident on further asset sales, including some of its non-media assets - Expect volatile move on the stock, It will be positive if the company to repay its debt

Lupin names Jon Stelzmiller president of US specialty business - Positive development for Lupin

Spice Jet target Cargo unit IPO. Company is weighing order for at least 100 airbus planes as Boeing company - Positive for Spice Jet

Care Ratings cut Indiabulls Housing Finance’s non-convertible debentures and bank facilities to AA+ from AAA. - Negative for Indiabulls Housing.

JSW Steel’s $400m Bond  issue has been 64% bought by Fund Managers - Positive for JSW Steel as procced will repay partial debt and for investment its plant. 

ICICI Bank to consider Q2 results on October 26

After the government's announcement of about 8 per cent reduction in the corporate tax, India's biggest auto manufacturer Maruti Suzuki on Wednesday announced prices cut for "select models" by Rs 5,000 (on ex-showroom price) - expect price cut will improve demand.

The Asian Development Bank (ADB) sharply cut India's growth forecast to 6.5 percent for the current fiscal, weighed down by the gross domestic product growth rate dipping to a six-year low in the first quarter. In July, ADB had forecast 7.0% growth for FY19 and 7.2% in FY20 - Expect stimulus announcement by the government worth Rs1.46 lakh cr will be back on growth.

REC gets Rs48.88b of total bids for 2-Part Bond - Issuer has yet to decide on the coupon rate for September 2023 and 10Y bonds, Company gets total bids worth Rs34.11b for September 2023 notes in the range of 7.40% to 8% - Positive for REC.

DPAM - Emerging MSCI Funds added Indian stocks - Adds Vedanta and others Indian stocks while Cuts Nornickel holding. - Among the DPAM - Emerging MSCI Funds added Indian stocks - including: Vedanta: 218,700 shares, valued at 492,544 euros, Bajaj Finserv : 4,500 valued at 483,891 euros, Coal India Ltd.: 145,000 valued at 478,993 euros, Indian Oil Corp.: 221,500 valued at 441,307 euros and Grasim Industries : 34,800 valued at 408,514 euros.

Board Meetings – IPCA Labs, Omaxe PNB. AGM – BEML, Engineers India, Eveready Industries, Fortis Healthcare, Gujarat Narmada Valley Fertlizer, IRB Infra, J&K Bank, Minda Corp, Omaxe Ltd, Radico Khaithan and Relaxo Footwear