11
Date: 4 June, 2020
Date: 4 June, 2020
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DOMESTIC INDICES
Close Points % Change
SENSEX 34110 284 0.84
NIFTY 10062 82 0.83
MIDCAP 12341 38 0.31
SMALL CAP 11571 142 1.24
SECTORAL INDICES
Close Points % Change
REALTY 1562 46 3.07
BANKEX 24089 489 2.07
Finance 4805 88 1.86
CG 12827 201 1.59
OIL & GAS 12252 182 1.51
CD 20842 212 1.03
AUTO 14719 50 0.34
Healthcare 15838 20 0.13
METAL 7073 -16 -0.23
IT 14415 -62 -0.42
TECK 7372 -42 -0.56
POWER 1519 -13 -0.85
BSE 200 GAINERS/LOSERS
GAINERS % LOSERS %
BANKINDIA 12.06 ADANIPOWER -6.22
IDBI 9.84 PEL -4.43
ADANIGAS 9.49 JSWENERGY -4.00
GODREJPROP 8.86 NAM-INDIA -3.46
UNIONBANK 8.56 UBL -3.42
ADVANCE/DECLINES
BSE %
ADVANCES 1672 63
DECLINES 845 32
UNCHANGED 142 5
INSTITUTIONAL ACTIVITY
Rs Cr 03/06/20 02/06/20 June Total
FII 1851 7498 12385(prov.)
MF -782 441 167(prov.)
Markets could open flat despite gains in other markets …
Indian markets could open flat today despite modestly higherAsian markets today and sharply rise in Dow Jones index onWednesday.
Wall Street rallied broadly on Wednesday with the Nasdaqapproaching record highs as signs of an economic recovery frommandated shutdowns helped investors look beyond U.S. socialunrest and pandemic worries. The S&P 500 has returned 37.7%over the last 50 trading days, making it the benchmark index’slargest 50-day rally in history.
Data from Automatic Data Processing showed private-sectoremployers shed 2.76 million jobs in May, following a decreaseof 20.2 million in April. Last month’s fall was much less than the8.66 million job losses expected from economists. The Institutefor Supply Management said its main reading of the servicesector’s health came in at 45.4 in May, above the consensusforecast of 44.7. Markets await Friday's U.S. Labor DepartmentMay jobs report, which is expected to show unemploymentsoaring to a post-World War Two high of nearly 20% from 14.7%in April.
Oil prices closed at a three-month high Wednesday, with WTIcrude for July delivery ticked up 48 cents, or 1.3%, to end at$37.29 a barrel. In precious metals, August gold fell $29.20, or1.7%, to settle at $1,704.80 an ounce on the NYME, its lowest inmore than three weeks. Gold prices fell as risk sentimentimproved on hopes of a recovery from a coronavirus-driveneconomic slump.
Investors are focused on whether the European Central Bankwill increase the size of its 750 billion euro ($669 billion)Pandemic Emergency Purchase Programme, when it meets onThursday. The European Central Bank meets later today and isexpected to boost its rescue program.
Stocks in Asia rose in Thursday morning trade as optimism overthe economic recovery from the coronavirus pandemiccontinued to keep investor sentiment afloat.
Indian equity markets continued to rise for the sixth straightsession on June 3 – the longest winning streak in ~7 months.Profit taking in the last one hour of trade cut the gains to someextent. At close the Nifty was up 82.40 points or 0.83% at10061.50.
Technically the Nifty looks tired after rising for 6 straightsessions and looks set for correction. On upmoves, 10175 couldprovide resistance while 9889-9995 could provide support.
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GLOBAL INDICES
EXCHANGE RATES
Value % Change
USD/INR 75.5 0.20
EURO/USD 1.122 -0.13
USD/GBP 1.254 -0.26
USD/JPY 108.9 0.00
COMMODITIES
Value %
Gold ($ / Oz) 1707.2 0.14
Silver ($ / Oz) 17.9 -0.10
Crude Oil Futures 36.6 -1.82
Brent Oil ($ / Barrel) 39.3 -1.16
BOND YIELD
Value % Chg bps
IND10 Yr Bond Yield 5.8 -2
ADR
Value $ %
Dr Reddys Labs 52.27 -0.36
HDFC Bank 46.09 3.34
ICICI Bank 9.78 2.41
Tata Motors 6.81 3.03
Wipro 3.36 -0.89
Vedanta Ltd 5.34 2.30
INFOSYS 9.27 -1.17
Close Points % Chg
DOW JONES 26270 527.24 2.05
S & P 500 3123 42.05 1.36
NASDAQ 9683 74.54 0.78
FTSE 6382 162.27 2.61
CAC 5022 163.41 3.36
DAX 12487 466.08 3.88
NIKKEI 225 22573 -41.26 -0.18
SHANGHAI COMP. 2917 -6.30 -0.22
HANG SENG 24288 -37.62 -0.15
BOVESPA 93002 1955.76 2.15
RIL rights issue subscribed 1.59 times, attracts subscription ofover Rs 84,000 croreRIL's mega rights issue of Rs 53,124.20 crore was subscribed1.59 times on June 3, the last day of subscription.
The public portion of the rights issue was subscribed 1.22 times.
The allotment of equity shares will happen on or about June 10,2020.
The rights shares which are going to list on June 12 will be calledpartly paid-up rights shares as the payment of these shares willbe in instalment.
The eligible shareholders paid the first instalment of Rs 314.25per share through subscription today. The second instalmentwill be paid by investors in May 2021 and the balance Rs 628.50in November 2021.
After the final payment in November 2021, these shares will bemerged with existing fully paid-up equity shares of RelianceIndustries.
Meanwhile, Reliance raised Rs 78,562 crore by selling over 17percent stake in Jio Platforms to leading technology investors,such as, Facebook, Silver Lake, Vista, General Atlantic and KKR.
Standard Life launches fresh US$ 260 million block deal inHDFC LifeUK’s Standard Life has launched a fresh $260 million block deal,to sell around 2 percent stake in HDFC Life Insurance.
“The offer price range of the stake sale is between Rs 490 ashare and Rs 501 a share and the block trades will be executedtoday.
As of March 31, 2020, Standard Life, which falls in the promotercategory held 12.25 percent stake in HDFC Life. HDFC holds51.44 percent in the insurer.
Standard Life has been paring its stake in HDFC Life through anumber of transactions since last year. In October, Standard Lifesold 4.96 per cent in HDFC Life Insurance to a clutch ofinstitutional investors at Rs 575.15 apiece to mop up Rs 5,750crore.In August, the firm sold 3.2 per cent in HDFC Life via block deals.Prior to that, it had sold 1.78 per cent stake for Rs 1,400 crore.In March, it divested 4.93 per cent stake in the life insurer toraise about Rs 3,600 crore.
Persistent Systems announces its collaboration with IBMIBM and Persistent Systems have collaborated to helpaccelerate IBM Cloud Pak deployments to speed clients’enterprise modernization and their move to the cloud.
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Aurobindo Pharma hives off biosimilar business to subsidiaryAurobindo Pharma said that it will hive off its biosimilars business to its wholly-owned subsidiary 'CuraTeQ BiologicsPrivate Limited' for a cash consideration of Rs 361.46 crore.
Biosimilars are biological medical products which are similar to existing medicines. The company will transfer itsbiosimilars business, including related research and development and manufacturing facilities to its wholly-ownedsubsidiary.
The slump sale is aimed at increasing the focus towards biological R&D and its commercialization, as well as to augmentfund raising and strategic tie-ups in future through joint ventures, among others.
The company also aims to improve operational efficiency of its business and is looking for a potential listing opportunityfor the wholly-owned subsidiary in future.
Aurobindo Pharma has been ramping ups its biosimilar operations for the last few years, a segment where an increasingnumber of drugmakers are entering for promise of strong returns.
The biosimilar business has a high gestation period and involves high risk, but also provides promise high returns assome of the biggest selling drugs globally are biologics.
Aurobindo Pharma's net increased 45% to Rs 850 crore in Q4 FY20Aurobindo Pharma consolidated net profit grew by 45.2 percent to Rs 849.8 crore for the quarter.
Consolidated revenue from operations were up 16.4 percent to Rs 6,158.4 crore during the quarter. EBITDA marginexpanded 180bps yoy at 21.8%.
For the full year 2019-20, revenue from operations was at Rs 23,098.5 crore witnessing a growth of 18.1 percent over2018-19. Operating margin came in 90bps higher at 21.1%.
Net Profit grew 19.7 percent to Rs 2,831 crore as against Rs 2,364.7 crore in FY19. In US markets, the company has 397approved products while 161 pending for approval.
Diversified product basket helped company to maintain the growth momentum in core geographies like USA andEurope. Net Debt stood at US$ 359mn as against US$ 724mn in Mar-2019.
During the fourth quarter, formulations revenues registered a growth of 23.5 percent to Rs 5,401.2 crore while API(active pharmaceutical ingredients) business posted sales of Rs 755.6 crore and contributed 12.3 percent to theconsolidated revenue.
Chola Fin reported lower than expected result for Q4FY20Chola fin reported 16% YoY growth in NII at Rs. 911 Cr while net profit dipped by 86% to Rs. 42.5 Cr due to largeprovisioning towards Covid -19 and others. AUM growth came in at 16%, which is weakest in the last 6 quarters.Disbursements were down by 36% due to shut down. The Company informed that 76% of the customers have opted fora moratorium. GNPA for the quarter stood at 3.8% compared to 3.5% in Q3FY20 and 2.7% in Q4FY19.
Bharat Petroleum Corporation Ltd (BPCL) Q4FY20 results key takeawayBPCL reported above than expected quarterly loss in Q4FY20, affected by weak refining margins, inventory losses andlower sales due to the Covid-19 lockdown. Company reported consolidated loss of Rs 1,819.6cr vs. profit of Rs 2,051.4crin Q3FY20 and Rs 3131.7cr in Q4FY19. Changes in inventories of finished goods, stock-in-trade and work-in-progresscame in at negative Rs 3,036.42cr in Q4FY20 vs. Rs 3,646.4cr in Q3FY20, following steep correction in global oil prices.Revenue from operations was down by 7.1 per cent (YoY) and 8.0 per cent (QoQ) to Rs 68,997.8 cr in Q4FY20.
For FY20, Company reported 57 per cent (YoY) decline in net profit to Rs 3665.8cr and revenue from operation wasdown by 4.6 per cent (YoY) to Rs 284571.9cr.
The market sales were higher at 43.4MMT in FY20 vs. 43.3MMT in FY19, Refining Throughput stood at 38.3MMT in FY20vs 36.76MMT in FY19. The Average Gross Refining Margin (GRM) was at US$ 2.50 per barrel in FY20 vs. US$ 4.58 perbarrel in FY19.
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Mishra Dhatu on COVID-19 impactThere was a disruption in production activities for 45 days. Subsequently, the normal production activities have resumedwith effect from May 20. Achieved sales turnover of Rs 50 crore for the month of May.
JSPL records 28% rise in May steel sales volumeThe company recorded highest ever standalone steel sales of 6.4 lakh tonnes in May, marking a growth of 28% ascompared to sales of 5 lakh tonnes during the same period of previous year.
Out of 6.4 lakh tonnes of total standalone sales, 4.01 lakh tonnes are exports sales.
Berger Paints on COVID-19 impactThe ramp up of production levels will be done gradually to allow for the inventory build-up since April sales wereextremely low. However, from the month of May there were signs of recovery. Company was able to manage the sharpdrop in business and consequently lower collections in April by accessing the market for commercial papers atcompetitive rates. International operations in Poland has been less impacted, while plant in Nepal is yet to resumeoperations.
Tata Consumers Products on COVID-19 impactAlmost all the tea packaging units, salt/pulses packing centres and 3P spices units are operational with prescribedoperating norms. The finished goods stock holding across depots are at a healthy level. Company has now been able toopen about 40% of its Starbucks outlets for the delivery and takeaway business. Internationally, tea and coffee sales toretail customers have increased due to higher in-home consumption, however the out-of-home businesses in the USAand Australia have seen a sharp decline. Sales are getting back to normal levels, there could be impact of increased inputcosts including due to commodity price volatility and supply constraints.
Important news/developments to influence markets
India’s Nikkei/IHS Markit Services Purchasing Managers' Index crawled up to 12.6 in May from April's all-time low of5.4 it remained a long way from the 50-mark separating growth from contraction.
Japan Services Purchasing Managers' Index (PMI) rose to a seasonally adjusted 26.5 in May from a record low 21.5 inthe previous month.
German’s IHS Markit’s final services Purchasing Managers’ Index (PMI) rose to 32.6 from 16.2 in April, higher than aflash reading of 31.4. The composite PMI index, which covers both the services and manufacturing sectors, rose to32.3 from 17.4 in April.
The German unemployment rate rose in May as the coronavirus pandemic and efforts to slow its spread continuedto take their toll. The unemployment rate increased to 6.3% from 5.8% in April, coming in a touch aboveexpectations of 6.2%.
Eurozone’s IHS Markit composite purchasing managers’ index (PMI), a closely watched guide to the economy’shealth, rose to 31.9 in May from a record low of 13.6 in April.
The Eurozone’s finalized services PMI came in at 30.5, up from a prelim 28.7 and April 12.0. In April, the Services PMIhad fallen from 26.4 to 12.0.
Eurozone April PPI -2.0% vs -1.8% m/m expected
Eurozone unemployment rate rose to 7.3 percent in April from 7.1 percent in March, as member countriesimplemented coronavirus, or Covid-19, containment measures.
UK PMI Services was finalized at 29.0 in May, up from April’s 13.4. PMI Composite was finalized at 30.0, up fromApril’s record low of 13.8.
US MBA mortgage applications w.e. 29 May -3.9% vs +2.7% prior
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US ADP Employment Change arrives at -2.76 million in May vs. -9 million expected
IHS Markit's Services Purchasing Managers' Index (PMI) for the US rose to 37.5 in May's final reading from the all-time low of 26.7 set in April.
The Institute for Supply Management’s index on nonmanufacturing economic activity rose to a reading of 45.4% inMay, up 3.6 percentage points from April.
The Institute for Supply Management's (ISM) Non-Manufacturing PMI arriving at 45.4 in May.
U.S. crude inventories edged down by 2.1 million barrels for the week ended May 29. It reported a fall of 483,000barrels.
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Daily View on Nifty
Nifty Daily Timeframe Nifty Hourly Timeframe
Technical Observations:
• Nifty rose for the sixth consecutive session
• Nifty hit a high at 10176 and witnessed a fall of 141 points to 10035 in last trading hour, yesterday.
• Nifty partially filled the gap which was formed on 12th March 2020 between 10040 and 10334. Niftyfound resistance in this gap zone.
• Previous top Resistance of 9889 can act as a support going forward
• Resistances for the Same are seen at 10176 and 10350
• RSI oscillator on the hourly chart exited the overbought zone which shows some weakness in the index.However price confirmation has yet not come yet. Trend is still bullish.
• Traders should continue to hold longs with trailing stop loss strategy.
Nifty LTP 2-Day View Reversal level 7-Day View Reversal level
10061Hold Long With SL
9900Move below 9900
Hold Long With SL 9700
Move below 9700
10176,10350 Target 10550
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DATA & EVENTS
OPEN SHORT-TERM TRADING CALLS
NOTE: ALL TRADING RECOMMENDATIONS GIVEN BY TEAM ARE ON REAL TIME BASIS. A TRADING RECOMMENDATIONSHOULD BE CONSIDERED CLOSED OR SQUARED OFF AS AND WHEN A STOPLOSS OR TARGET IS TOUCHED IN INTRADAYTRADING. DO NOT WAIT FOR TARGET ACHIEVED OR STOPLOSS MESSAGE TO CLOSE THE POSITIONS. REFER JAMMOON FORTIMELY ENTRY AND EXIT FROM RECOMMENDATIONS.
NO.RECO DATE
COMPANY NAME RECO COST SLTARGE
TTIME
DURATION
1 2-JUN-20 IRCON BUY 87.5-89.1 86.3 100 1-3 DAYS
2 2-JUN-20 INFOSYS BUY 696-706 692 737 7 DAYS
3 3-JUN-20 MGL 1000 CALL OPTION BUY 49.6 36 73 1-3 DAYS
4 3-JUN-20 AXIS BANK JUNE FUT BUY 403-407 398 420 1-3 DAYS
5 3-JUN-20 GNFC BUY 137-139.25 135.7 152 1-3 DAYS
6 3-JUN-20 HPCL BUY 199.80-192 189.75 212 7 DAYS
7 3-JUN-20 MINDA CORP BUY 59-60.50 57.4 70 1-3 DAYS
8 3-JUN-20 HINDUSTAN UNILEVER BUY 2130-2069 2038 2260 7 DAYS
NO. RECO DATE COMPANY NAME RECO COST SL TARGETTIME
DURATION
1 28-APR-20 DR LAL PATH LAB BUY 1556.25 1388 1742/1850 3 MONTHS
2 20-MAY-20 EMAMI LTD BUY 202.1 183 225/255 3 MONTHS
3 28-MAY-20 SIEMENS* BUY 1047 1008 1120/1150 1-3 MONTHS
4 28-MAY-20 ICICI PRU LIFE BUY 369.5 334 406/442 1-3 MONTHS
5 29-MAY-20 MINDA INDUSTRIES BUY 290.6 266 322/349 3 MONTHS
6 29-MAY-20 HINDUSTAN ZINC BUY 170 163 183/195/200 1-3 MONTHS
7 1-JUN-20 NEW INDIA ASSURANCE BUY 120.8 108 135/150 3 MONTHS
8 1-JUN-20 ADANI ENTERPRISE BUY 152.7 142.5 170 3 MONTHS
9 1-JUN-20 AVANTI FEEDS BUY 442 403 481/520/575 2-6 MONTHS
10 2-JUN-20 RALLIS INDIA BUY 219 197 245/270 3 MONTHS
11 3-JUN-20 GE SHIPPING BUY 213 194.5 235 3 MONTHS
12 3-JUN-20 GUJARAT ALKALIES BUY 326 300 310/360 3 MONTHS
13 3-JUN-20 CANARA BANK BUY 96.5 86 107/117 3 MONTHS
OPEN CASH POSITIONAL CALLS
*= 1ST TARGET ACHIEVED
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DATA & EVENTS
OPEN E-MARGIN POSITIONAL CALLS
NO. RECO DATE COMPANY NAME RECO COST SL TARGET TIME DURATION
1 2-JUN-20 MINDTREE BUY 908-865 840 990/1040 3 MONTHS
NO. RECO DATE COMPANY NAME RECO COST SL TARGET TIME DURATION
1 2-JUN-20 ICICI BANK JULY FUT* BUY 327-345 318 370/380 2-9 WEEKS
2 3-JUN-20 LIC HOUSING FINANCE JUN FUT BUY 264-248 243 288 TILL 25TH JUNE
OPEN DERIVATIVE POSITIONAL CALLS
*= 1ST TARGET ACHIEVED
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DATA & EVENTS
QUARTERLY RESULTS ANNOUNCED
COMPANY Q4FY20 YoY (%) QoQ (%) Remarks
Sales (Rs Cr)
NP (Rs Cr)
Sales NP Sales NP
Aurobindo Pharma 6158 849 16 45 4 20Above
Estimates
BPCL 68998 -1820 -7 PL -8 PLBelow
Estimates
Cholamandalam Invt. & Finance 911 42 16 -86 -2 -89Below
Estimates
PL: Profit to Loss, LP: Loss to Profit, LL: Loss to Loss
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