9
Date: 15 May, 2020
Date: 15 May, 2020
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DOMESTIC INDICES
Close Points % Change
SENSEX 31123 -886 -2.77
NIFTY 9143 -241 -2.57
MIDCAP 11536 -46 -0.39
SMALL CAP 10706 -68 -0.63
SECTORAL INDICES
Close Points % Change
Healthcare 15103 81 0.54
CG 11710 17 0.14
AUTO 13157 -81 -0.61
CD 18337 -271 -1.46
REALTY 1366 -26 -1.90
POWER 1436 -33 -2.22
OIL & GAS 11146 -289 -2.52
BANKEX 21813 -595 -2.66
METAL 6222 -177 -2.76
Finance 4354 -138 -3.06
TECK 6884 -230 -3.23
IT 13400 -500 -3.60
BSE 200 GAINERS/LOSERS
GAINERS % LOSERS %
INFRATEL 6.81 CHOLAFIN -6.32
GODREJCP 5.42 ICICIGI -5.87
FEDERALBNK 5.21 L&TFH -5.74
JUBILANT 4.99 MINDTREE -5.58
AUBANK 4.99 TECHM -5.24
ADVANCE/DECLINES
BSE %
ADVANCES 968 39
DECLINES 1360 55
UNCHANGED 152 6
INSTITUTIONAL ACTIVITY
Rs Cr 14/05/20 13/05/20 May Total
FII -2153 -283 14291(prov.)
MF 802 -233 -171(prov.)
Markets could open flat as bounce in global markets offsetlocal disappointments…
Indian markets could open flat today following a sharp reboundin US markets on Wednesday and Asian markets that are mildlyup this morning.
The Dow staged the biggest turnaround in about two monthson Thursday, as investors overlooked data that showed 2.98million Americans lost jobs last week, bringing the totalunemployed to about 36.5 million since COVID-19 pandemicbegan. A rebound in large financial stocks helped to turn stocksaround in afternoon action, as investor skittishness abated withsigns of recovering demand as some U.S. states reopen theireconomies.
Crude-oil prices rose on news of production cuts and strongerdemand forecasts, with West Texas Intermediate Crude for Junedelivery up $2.27, or 9%, to end at $27.56 a barrel. The price ofan ounce of June gold rose $24.50, 1.4%, to settle at $1,740.90an ounce.
Asian stocks were mildly up on Friday amid investor optimismabout the re-opening of the U.S. economy from coronaviruslockdowns and possibly more stimulus that could fuel arecovery. In April, China’s industrial output grew by 3.9 percent, retail sales fell by 7.5 per cent and fixed asset investmentfell by 10.3 per cent, suggesting an uneven recovery.
In the second round of stimulus announcements madeyesterday, the focus has been more on providing concessionalcredit and liquidity support rather than direct fiscal transfer(except for interest subvention and free food). The measuresare welcome (although proliferation of schemes could havebeen avoided) and this could relieve the feared pressure on thefiscal situation but may not result in direct and immediate boostto demand. Hence the economic revival could take some time.
Indian benchmark indices wiped out all the previous sessiongains with Nifty ending below 9150 level on May 14 due tounenthusiastic response to the relief package announcementsmade on Wednesday and amid weak global cues. Nifty closeddown 240.80 points or 2.57% at 9142.75. Capital Goods andMedia stocks were up while IT, Metals, Financials, and Telecomshares were down.
Technically, Nifty has fallen with a downgap and closed near itsintraday low. The trend continues to be down. On upmoves itcould face resistance at 9236, while 9044 could offer support tothe Nifty on downmoves.
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GLOBAL INDICES
EXCHANGE RATES
Value % Change
USD/INR 75.5 0.20
EURO/USD 1.080 -0.04
USD/GBP 1.220 -0.18
USD/JPY 107.3 0.07
COMMODITIES
Value %
Gold ($ / Oz) 1743.0 0.12
Silver ($ / Oz) 16.4 1.51
Crude Oil Futures 27.5 -0.36
Brent Oil ($ / Barrel) 31.2 0.26
BOND YIELD
Value % Chg bps
IND10 Yr Bond Yield 6.05 -4
ADR
Value $ %
Dr Reddys Labs 50.37 0.96
HDFC Bank 37.59 -1.03
ICICI Bank 8.71 -0.57
Tata Motors 5.66 1.98
Wipro 2.92 1.74
Vedanta Ltd 4.73 2.60
INFOSYS 8.68 1.52
Close Points % Chg
DOW JONES 23625 377.37 1.62
S & P 500 2853 32.50 1.15
NASDAQ 8944 80.55 0.91
FTSE 5742 -162.51 -2.75
CAC 4273 -71.82 -1.65
DAX 10337 -205.64 -1.95
NIKKEI 225 19820 -95.28 -0.48
SHANGHAI COMP. 2865 -5.08 -0.18
HANG SENG 23642 -188.24 -0.79
BOVESPA 79011 1238.61 1.59
FM Nirmala Sitharaman’s announcements highlights: Day 2
For those migrants who don't have NFSA cards or statecards, 5 Kgs of wheat or rice per person and one kg channaper family per month for next two months to be providedand it will reach through the state governments. This willentail Rs 3,500 crore and is likely to benefit around 8 croremigrants.
There is going to be One Nation One Ration Card throughoutthe country. Anyone, irrespective of where they are -whichever state or UT they are in - can avail ration. The OneNation One Ration Card is already rolled out 83% so far, andwill be 100% by March 2021.
Under PM Awas Yojana, a scheme will start for rentalhousing scheme, where institution and associations will beasked to make affordable rental housing accommodation ontheir premises.
Those who have availed loans up to Rs 50,000, an interestsubvention of 2% for next 12 months after the moratoriumperiod extended by RBI ends. Three crore people will getbenefit of Rs 1500 crore.
Special scheme for street vendors to avail Rs 5,000 croreloan facility. Will be given Rs 10,000 of working capital.
Credit-linked subsidy scheme for middle income householdsin the income group Rs 6-18 Lakh extended to March 2021.The CLSS scheme was operationalized from May 2017 andextended up to March, 2020. Now, it has been extended tillMarch 2021. This will lead to investments of Rs 70,000 crorein housing and kickstart sectors like steel, cement and createjobs.
Rs 6,000 cr worth of proposals have come from states underCAMPA funds.
The government is extending Rs 30,000 crore additionalcapital emergency funds through NABARD for post-harvestRabi and Kharif related activities for small and marginalfarmers.
Under the PM Kisan Credit Card, Rs 2 lakh crore ofconcessional credit to boost farming activities and it willbenefit 2.5 crore farmers. Those in animal husbandry andfisheries will also be included.
Unichem Labs received EIR from US FDA for APIs facility atRohaUnichem Laboratories received the Establishment InspectionReport (EIR) from US FDA for Active Pharmaceutical Ingredients(APIs) facility at Roha. The US FDA conducted the inspection ofRoha facility from 17th to 21st February 2020.
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Ircon International signs MoU with Russian entity RZD InternationalIrcon International has signed a Memorandum of Understanding with RZD International LLC, a subsidiary of state-ownedRussian Railways Company to explore opportunities for joint development of railways and other infrastructure projectsin Asia, Africa and Latin America.
Oracle Financial Services (OFSS) Q4FY20 results key takeawayOFSS Q4FY20 numbers were below expectations. Company reported 17.4 percent (YoY) and 40.2 percent (QoQ)degrowth in consolidated PAT to Rs 269.3cr in Q4FY20, impacted by higher employee cost including professional costand depreciation and amortisation expenses. Consolidated revenues grew 4 percent (YoY) and 8.9 percent (QoQ) to Rs1,263.5cr, affected by COVID-19 pandemic in Q4FY20.
For FY20, Net profit grew 5.5 percent (YoY) to Rs 1 462.2cr. Overall revenues declined 2 percent to Rs 4,861.3cr. ItsProducts business posted revenue of Rs 4,315cr, down 1 per cent (YoY) and the operating income of Rs 2,136cr, whichwas in-line with FY19.
OFSS signed US$ 23 million of new licenses in Q4FY20, which was 12 percent higher on YoY basis. The Company haddeclared an interim dividend of Rs. 180 per equity share on May 8, 2020.
Tata Consumer Products Q4 reviewTCPL reported a 36% rise in Operating Revenue at Rs.2405 Cr. However, this is attributed to the amalgamation of theTata Chemicals consumer business.
On comparable basis, we saw a sub 6% growth in revenues for the company, with India beverages growing at 5.96% andinternational beverages growing at 6.51% YoY. Tea growth has been slow. Operating margins stood at 10.16% but thecompany recorded a 50 Cr loss on PAT level. The company has booked exceptional losses to the tune of Rs.264 Crfor non-cash impairment loss on goodwill and relating to the business in Australia and tea business in the US. Themanagement has guided that they will be getting rid of loss making businesses, and have exit Czech business in January2020.
Biocon's Q4 revenue hit by Covid-19 crisis, pre-tax profit declines 28%Biocon posted a profit before tax (PBT) of Rs 204 crore for the fourth quarter of FY20, a decline of 28.2 per cent whencompared with the corresponding quarter of previous financial year.
The net profit for the period declined 42.2 per cent to Rs 123 crore on y-o-y basis. The company’s revenue however sawa muted growth of 6 per cent as compared to Q4 of FY19.
Q4FY20 witnessed a muted growth of 6 per cent with revenues at Rs 1,644 crore due to operational challenges includingone-time Covid-19 related impact on Biologics business. Small Molecules and Research Services businesses, however,delivered robust growth of 15 per cent and 14 per cent, respectively. The Biologics segment reported a de-growth of 21per cent during the quarter after reporting three consecutive quarters of robust performance.
Escorts Q4FY20 results updateEscorts reported strong operational Q4 FY20 results. Revenues declined by 16% yoy to Rs 1,385.7 crore. Net profitincreased 9.7% yoy to Rs 127.7 crore. On a sequential basis revenues fell 16% and net profits declined by 17.5%.
EBITDA margins expanded 190bps yoy to 13.1% due to better product mix, cost reductions and leaner operations. Boardrecommended a final dividend of Rs 2.5 per share.
Total tractor volumes fell by 20% YoY during the quarter to 20,108 units. Domestic tractor volumes were down 21% to19,122 units. Construction equipment sales declined 32% YoY to 986 units. Domestic market share improved 120bpsover Q3 FY20 but was down 190 bps to 13.1% on yoy basis.
Manappuram Finance Q4FY20 PAT surged ~44% to Rs 398crMannappuram Finance results were as per street estimates. Consolidated Net Interest Income increased by 26.1% YoYto Rs 891.1 crore. Net profit soared 43.6% YoY to Rs 398.2 crore despite ~8 fold increase in provision to Rs 122.6 crore.
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Gold Loan AUM increased by 30.9% YoY/4.5% QoQ to Rs 16,967 crore while total AUM was up 29.8% YoY/4.7% QoQ.Online gold loans shares increased to 48% from 44% at the end of Q3FY20. Asirvad MFI grew AUM by +43.3 % YoY anddelivered 25.5% ROE in FY20. Microfinance (MFI) and Vehicle finance AUM grew strongly in FY20 with Rs 5503cr and Rs1344cr respectively.
GNPA/NNPA in the gold loan business increased 40/30bps sequentially to 0.9%/0.5% respectively.
Indian Energy Exchange Q4 Result UpdateIEX reported better than expected results. Sales grew 17% YoY to Rs. 79.6cr and net profit increased 20.5% to Rs. 45.6cron strong revenues and lower taxes. Operating margin declined on account of higher employee cost and otherexpenses.
NAM India Q4 FY20 results previewNAM India is expected to post muted result for Q4 FY20. Total AAUM is expected to decline by 13.8% YoY, led by steepfall in debt AUM and MTM hit on equity assets. Other income expected to be negative as equity AUMs decline due toMTM hit. Revenue seen at Rs. 293cr, declining by 15% YoY and Net profit may fall sharply by 53% YoY at Rs. 64cr.
Cipla Q4 FY20 results previewRevenues may decline 4% yoy to Rs 4246cr. EBITDA is expected to fall sharply by 22% yoy to Rs 744cr. PAT is expected todip 3% to Rs 354cr. Q4 FY19 included one off expenses of Rs 210cr, APAT may decline 31% yoy. Update on domestic andUS business would be key to watch out for.
Important Global news/developments to influence markets
India’s April WPI food inflation stood at 3.60% vs. 5.49% in March 2020.
Foreign Investments in Japanese Stocks increased from -271.9B to -86.6B
Japan’s M2 Money Stock (YoY) increased from 3.3% to 3.7% and M3 Money Supply (Apr) increased from 1,844.4T to1,847.5T
Machine tool orders fell in April to their lowest level in more than a decade. In April, machine tool orders slumped48.3 percent compared with a year earlier,
German consumer prices decelerated in April, driven by the sharp drop in energy prices. The consumer price index(CPI) increased 0.4% compared with March and increased 0.9% compared with the same month a year earlier.
German WPI (YoY) (Apr) decreased from -1.5% to -3.5%, (MoM) (Apr) decreased from -0.4% to -1.4%.
Germany Thomson Reuters IPSOS PCSI (May) increased from 44.33 to 45.89.
In the UK docket, the RICS House Price Balance contracted 21% for the month of April (from 9% gain), less than theforecasted 38% drop.
UK’s Thomson Reuters IPSOS PCSI (May) increased from 41.6 to 42.3.
The number of Americans seeking unemployment benefits remained in the millions for an eighth straight week asthe economy continued to reel from the coronavirus pandemic. Initial jobless claims in state programs totaled 2.98million in the week ended May 9.
U.S. import and export prices both fell in April. The price index for U.S. imports declined 2.6 percent in April.Meanwhile, prices for U.S. exports declined 3.3 percent in April.
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Daily View on Nifty
Nifty Hourly Timeframe (60min) Nifty Daily Timeframe
Technical Observation:Markets ended with hefty losses on Thursday after a weak opening on the back of negative global cues. The Nifty finally lost 240.8 points or 2.57% to close at 9,142.75.
The Nifty opened with a down gap and then gradually declined for the rest of the trading session despite the stimulus packageannounced by the Government. The market breadth was negative, indicating that the underlying bias was bearish.
Zooming into the daily charts, we observe that the Nifty has failed to sustain the breakout above 9451 seen on Wednesday. We are therefore sticking to our earlier view that the short term trend remains down. The Nifty index has also closed below the 13-day and 50-day SMA, which is a negative signal. The 14-day RSI which had moved above its 9-day EMA yesterday has once again dipped sharply and closed below its 9-day EMA, indicating a loss of momentum.
The 60 minute Nifty chart too indicates that the index remains in a downtrend, barring the spike seen yesterday when the Nifty crossed the 9451 levels.
Immediate downside targets for the Nifty are now at the immediate lows of 9043. Further downsides are likely if these supports are broken.
Conclusion:The short term trend for the Nifty remains down with the Nifty failing to cross the recent highs of 9451. With negative technical indicators, we expect the Nifty to move down further towards the next support of 9043. Further downsides are likely if these supports fail to hold and which could also lead to the resumption of the intermediate downtrend.
Nifty LTP 2-Day View Reversal level 7-Day View Reversal level
9143Further downsides
expectedMove above 9235 Bearish Move above 9451
Targets for 2 day: 9043
Targets: 8909-8821
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DATA & EVENTS
OPEN TRADING CALLS
NOTE: ALL TRADING RECOMMENDATIONS GIVEN BY TEAM ARE ON REAL TIME BASIS. A TRADING RECOMMENDATION SHOULD BECONSIDERED CLOSED OR SQUARED OFF AS AND WHEN A STOPLOSS OR TARGET IS TOUCHED IN INTRADAY TRADING. DO NOT WAIT FORTARGET ACHIEVED OR STOPLOSS MESSAGE TO CLOSE THE POSITIONS. REFER JAMMOON FOR TIMELY ENTRY AND EXIT FROMRECOMMENDATIONS.
NO. RECO DATE COMPANY NAME RECO COST SL TARGET TIME DURATION
1 14-MAY-20 NIFTY MAY FUT SELL 9140-9190 9230 8950 1-3 DAYS
2 14-MAY-20 BANKNIFTY 19500 CALL (28 MAY EXPIRY) BUY 615 420 850 1-3 DAYS
3 14-MAY-20 NIFTY 9100 PUT (21 MAY EXPIRY) BUY 156 110 250 1-3 DAYS
4 14-MAY-20 APOLLO HOSPITAL MAY FUT BUY 1285-1298.75 1278 1338 1-3 DAYS
5 14-MAY-20 PVR MAY FUT BUY 883.70-860 858 910 1-3 DAYS
6 14-MAY-20 IPCA LAB BUY 1584-1536 1513 1679 1-7 DAYS
NO. RECO DATE COMPANY NAME RECO COST SL TARGET TIME DURATION
1 28-APR-20 DR LAL PATH LAB BUY 1556-1587 1388 1742/1850 3 MONTHS
2 29-APR-20 ENDURANCE BUY 645-600 585 710 2 MONTHS
3 11-MAY-20 ERIS LIFESCIENCE BUY 445-495 426 555/590 3 MONTHS
4 11-MAY-20 RAIN INDUSTRIES BUY 66-70.5 63 78/82 3 MONTHS
5 13-MAY-20 JK CEMENT BUY 1104-1055 1025 1199/1260 3 MONTHS
6 13-MAY-20 TATA ELXSI BUY 795-755 725 875/920 3 MONTHS
OPEN TECHNICAL POSITIONAL CALLS
OPEN DERIVATIVE POSITIONAL CALLS
NO. RECO DATE COMPANY NAME RECO COST SL TARGET TIME DURATION
1 6-MAY-20 GLENMARK PHARMA MAY FUT SELL 330-350 359 300 TILL 28TH MAY
2 11-MAY-20 SUN PHARMA MAY FUT BUY 447-475 437 510 12-14 SESSIONS
OPEN PAIR TRADES
NO. RECO DATE COMPANY NAME RECO COST SL TARGET TIME DURATION
1 14-MAY-20HUL MAY FUT BUY 2017.5 1925 2155
TILL 28TH MAY 2020ITC MAY FUT SELL 165.05 173 153
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DATA & EVENTS
QUARTERLY RESULTS ANNOUNCED
COMPANY Q4FY20 YoY (%) QoQ (%) Remarks
Sales (Rs Cr)
NP (Rs Cr)
Sales NP Sales NP
Biocon 1581 123 3 -42 -10 -39Below
Estimates
Escorts 1386 128 -16 10 -16 -18Above
Estimates
IEX 80 46 17 21 15 9Above
Estimates
Manappuram 891 395 26 44 -2 -1As Per
Estimates
Oracle Financial Services 1264 269 4 -17 9 -41Below
Estimates
Tata Consumer Products 2405 -50 35 PL -4 PLBelow
Estimates
PL: Profit to Loss, LP: Loss to Profit, LL: Loss to Loss
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