Morning Notes
22nd Jul, 2019
 

Trading Range:

Nifty opened gap up at 11628 on Friday and made a high and low of 11640 and 11399 respectively before closing negative at 11419.

Review/Outlook:

For the day, support for Nifty exists at 11360 and 11280 levels whereas resistance for Nifty stands at 11490 and 11570 levels.

Review/Outlook:

Bank Nifty opened gap up at 30515, made a high of 30544, low of 29706, and closed negative at 29770. For the day, support for Bank Nifty exists at 29500 and 29300 levels whereas resistance for Bank Nifty stands at 30000 and 30200 levels.

Market Scan
Benchmark Indices
Index Clsg Chg%
Sensex 38,337 -1.44
Nifty 11,419 -1.53
BSE 200 4,757 -1.56
BSE Midcap 14,078 -1.99
BSE Smallcap 13,310 -1.83
Dow Jones 27,154 -0.25
NASDAQ 8,146 -0.74
 

DERIVATIVES INDICATORS FOR JUL 22, 2019:

NIFTY 11419.25 (-177.65) (-1.53%)
NIFTY JUL FUTURE 11421.85  (2.60 Points Premium)
NIFTY PCR - OI 1.05(-0.20)
NIFTY OPEN INTEREST 2.02Cr. (-0.27%)
INDIA VIX 12.51 (+6.51%)
NIFTY ROLLOVER 26%

NIFTY OPTIONS ACTIVITY (25-JUL SERIES)

CALL 11500 CE +24.14 lac Shares
CALL 11600 CE +17.50 lac Shares
PUT 11400 PE +7.69 lac Shares
PUT 11300 PE +4.38 lac Shares
Sectoral Indices (BSE)
Index Clsg Chg%
Auto 16,262 -3.24
Bankex 33,464 -2.14
PSU 7,333 -0.64
Healthcare 12,772 -1.79
IT 15,455 -0.71
 
Market Turn Over (`cr)
Index 19/07 18/07
BSE Cash 2,302 2,314
NSE Cash 38,385 33,623
NSE F&O 1,125,855 1,947,254
BSE Delivery % 42.02 41.02
Advances / Decines BSE Cash
Adv(%) Dec(%)
BSE 100 10.89 89.11
BSE 200 16.42 83.58
BSE 500 17.76 82.04
Total BSE 23.17 71.85
 
Commodities, Forex & Debt
Clsg Chg%
Crude Oil NYMEX $ bl 56.09 +0.83
Gold Rs./ 10 Gms 35036.00 -0.34
Silver Rs./ Kg 40682.00 -0.14
Rs.- US $ 68.84 +0.01
Rs.- Euro 77.23 -0.39
FII (Rs cr )
19/07* 18/07*
FIIs -1401.54 -85.86
MFs - -

*Date refers to the day of activity and not the day on which it is reported.

 
Details Buy Sell Open interest at the
end of the day
Net Position
No. of
Contracts
Value
(Rs. Cr)
No. of
Contracts
Value
(Rs. Cr)
No. of
Contracts
Value
(Rs. Cr)
Value
(Rs. Cr)
Index Futures       65,631.00       4,730.91       74,294.00       5,789.59    2,55,831.00     20,487.92  (1,058.68)
Index Options  28,13,553.00  1,95,836.13  28,26,480.00  1,96,866.01    5,82,190.00     46,447.41  (1,029.88)
Stock Futures    2,85,817.00     17,295.31    2,86,310.00     17,370.73  14,36,984.00     88,365.27       (75.42)
Stock Options    1,39,984.00       8,538.48    1,42,734.00       8,688.54       75,713.00       4,460.05     (150.05)
Total  33,04,985.00  2,26,400.83  33,29,818.00  2,28,714.87  23,50,718.00  1,59,760.65  (2,314.04)
Corporate News
Labels on Patanjali’s two sharbat products, earmarked to be sold within India, were found to be having “additional medicinal and dietary market claims” as compared to the ones on bottles set aside for export to America, according to the US health regulator. (BL).
Dr Reddy’s Laboratories Ltd has announced the closure of transactions with Upsher-Smith Laboratories, LLC (Upsher-Smith). This follows the satisfactory completion of all customary closing conditions, including the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), as amended. In more news, Dr Reddy’s Laboratories Ltd has launched Fexofenadine HCl 60 mg and Pseudoephedrine HCl 120 mg extended-release tablets in the US market. (ET).
Richest Indian Mukesh Ambani has kept his annual salary from his flagship firm Reliance Industries capped at Rs 15 crore for the eleventh year on the trot. Ambani has kept his salary, perquisites, allowances and commission together at Rs 15 crore since 2008-09, forgoing over Rs 24 crore per annum. This is at a time when remunerations of all whole-time directors of the company, including cousins Nikhil and Hital Meswani, saw a handsome increase in the fiscal year ended March 31, 2019. (BL).
Although credit rating agencies (CRAs) had concerns regarding the operations of the debt-ridden IL&FS Group during the period June 2012 to June 2018, the ratings assigned by them were consistently high and the same were reversed only after June/July 2018, as per the observations of Grant Thornton India LLP, which was appointed by IL&FS’ audit committee to conduct a special audit. (ET).
Reliance Industries has said its flagship natural gas fields in the KG-D6 block in the Bay of Bengal are in “a late life stage” with output plummeting to an all-time low. (ET).
Come August, Barmer oilfields will clock a decade of production. However, for the operator, Cairn Oil & Gas — a vertical of Vedanta Ltd — there are many challenges. They include not only getting every barrel out of the ground from this otherwise declining field and the procedural issues with joint venture partner ONGC, but also developing other hydrocarbon areas that Cairn has added to its kitty. (BS).
State-owned BHEL on Sunday said it has secured an order worth Rs 486 crore from Nuclear Power Corporation of India Ltd (NPCIL) to erect the reactor side equipment in unit 3 and 4 of Kudankulam project. (BL).
Tata Steel plans to raise $600 million this fiscal to fund the second phase of increasing production capacity at its Kalinganagar plant to 8 mtpa from 3 mtpa, and refinance old loans. The company has set a target of reducing gross debt by $1 billion in FY20. Its net debt stands at ₹1 lakh crore, as of March 2019. (BS).
JSW Steel has commissioned 2.5-lakh tonne fresh tin-plate capacity at its Tarapur unit in Maharashtra, with an investment of Rs.575 crore. (ET).
UltraTech’s Chairman and Non-Executive Director Kumar Mangalam Birla received an annual remuneration Rs 15.53 crore in FY 2018-19, down 18.82 per cent over the year-ago period, even as the largest cement producer posted a double digit growth in its topline. Birla, 52, had received an annual salary of Rs 19.13 crore in FY 2017-18. (BL).
Tata Motors Managing Director (MD) and Chief Executive Officer (CEO) Guenter Butschek’s total remuneration was at Rs 26.29 crore, an increase of 1.57 per cent from the previous year, according to the company’s annual report for 2018-19. On the other hand, the total remuneration of Mahindra & Mahindra (M&M) Managing Director (MD), Pawan Goenka, for FY2018-19 was at Rs 12.19 crore. This was at a marginal decline of 0.16 per cent from the previous fiscal, its annual report for 2018-19 showed. (BL).
Cadila Healthcare on Friday said Zydus’ Nesher Pharmaceuticals has received final nod from the US health regulator to market generic version of Adderall XR capsules in the US. (ET).
Kotak Mahindra Asset Management Company has a total exposure of around Rs 140 crore in crisis-hit home loan and property finance firm Dewan Housing Finance Corporation Ltd (DHFL). The total exposure of the mutual fund industry in the company is estimated at Rs 5,000 crore from 10 asset management companies (AMCs). (BL).
As part of innovative modes of financing to meet India's huge infrastructure appetite, insurance giant LIC has agreed to offer Rs 1.25 lakh crore line of credit by 2024, to fund highway projects, Union Minister Nitin Gadkari said. (BL).
Strides Pharma Science announced that its formulation facility in Bangalore underwent a USFDA inspection that ended on May 24, 2019. The inspection was completed successfully with a Voluntary Action Indicated (VAI) classification, the company said on Saturday in the press release. (ET).
Corporate Quarterly Earnings
Reliance Jio Infocomm reported its seventh straight profitable quarter, with earnings growing at a higher-than-expected 46 per cent on the back of strong subscriber additions that made it India’s second-largest telco by users. Increased data usage helped Jio offset the impact of a continued drop in average revenue per user (ARPU). The key performance metric fell for the sixth consecutive quarter to Rs 122 from Rs 126.1 in January-March. (BL).
Diversified non-banking financial company (NBFC) L&T Finance Holdings (LTFH) on Friday posted 2 per cent year-on-year growth in June quarter profit at Rs 549 crore compared with Rs 538 crore posted for the same quarter a year ago. Net interest margin along with fee income stood at 6.76 per cent against 6.58 per cent YoY. Pre-provisioning operating profit stood at Rs 1,342 corre, up 24% YoY. Retailisation increased to 52 per cent from 46 per cent YoY while the company maintained market share by leveraging on business strengths. (ET).
Bandhan Bank reported a 46 per cent jump in first quarter net profit as it seeks new areas for mobilising deposits. Profit climbed to Rs 701 crore in the three months ended June from Rs 482 crore a year earlier, the private sector bank said on Friday. Net interest income for the quarter grew 36 per cent to Rs 1,411 crore from Rs 1,037 crore a year earlier, helping the lender to offset the impact of higher provisions on account of bad loans. Net interest margin was 10.45 per cent compared with 10.27 a year earlier. Bandhan Bank’s asset quality worsened year-on-year but improved sequentially. Gross nonperforming assets ratio was at 2.02 per cent at the end of June compared with 1.26 per cent a year ago and 2.04 per cent at the end of March.Its net NPA ratio was 0.56 per cent compared with 0.64 per cent a year earlier and 0.58 per cent in March. Provisions other than taxes rose 56 per cent to Rs 125 crore from Rs 80 crore in the year-ago period. Other income rose 48 per cent to Rs 312 crore. (ET).
Private sector general insurer ICICI Lombard on Friday reported a 7.6 per cent drop in gross direct premium income (GDPI) at Rs 3,487 crore for June quarter compared with Rs 3,774 crore reported for the same quarter a year ago. However, the insurer said excluding the crop segment, the GDPI increased 17.7 per cent to Rs 3,488 crore in Q1 of FY2020 from Rs 2,964 crore in the year-ago period. This was higher than the industry growth (excluding crop) rate of 13.6 per cent. Profit after tax (PAT) grew 7.1 per cent to Rs 310 crore in Q1 of FY2020 against Rs 289 crore in Q1 of FY2019. Return on average equity (ROAE) was 23 per cent in Q1 of FY2020 compared with 24.7 per cent in Q1 of FY2019. The insurer's solvency ratio stood at 2.20 times as of June 30, 2019 against 2.24 times as of March 31, 2019 and higher than the minimum regulatory requirement of 1.50 times
InterGlobe Aviation, parent of air carrier IndiGo, on Friday said profit after tax soared 43 times to Rs 1,203.10 crore in the June quarter compared with Rs 27.80 crore in the same quarter last year. Revenue from operations jumped 44.7 per cent to Rs 9,420.10 crore on a 30.3 per cent increase in capacity compared with the year-ago period. (ET).
Homegrown FMCG major Dabur India on Friday reported 10.24 per cent increase in consolidated net profit to Rs 363.81 crore for the first quarter ended June, 2019, driven by growth in rural sales. It had posted a net profit of Rs 330 crore in the April-June period of the last fiscal, Dabur India said in a BSE filing. Dabur's revenue from operations for the quarter under review was up 9.25 per cent to Rs 2,273.29 crore, as against Rs 2,080.68 crore in the corresponding quarter of the previous fiscal. (ET).
HDFC Bank’s NII for Q1FY20 has improved by 22.9% yoy to Rs13,294.3cr against Rs10,813.6 in the correspoding quarter last year. The bank’s net profit has improved by 21% yoy to Rs5,586cr against Rs4,601.4cr yoy. Its GNPA for Q1FY20 came at 1.4%, up by 4bps qoq. NNPA for the quarter came at 0.43% against 0.39% qoq, which is up by 4bps. Non-interest income growth was strong aided by trading gains of Rs210cr in the quarter as against a loss of Rs280cr in 1QFY19. Core fee income growth however was muted at 12.5%. The Bank's total Capital Adequacy Ratio (CAR) as per Basel Ill guidelines was at 16.9% as on June 30, 2019 (14.6% as on June 30, 2018). The Board of Directors has declared a special interim dividend of Rs5 per equity share. (BL).
Reliance Industries reported a good set of numbers for Q1FY20. The consolidated revenue grew by 21.9% yoy and 13.2% qoq to Rs1,56,976cr. EBITDA came in Rs21,315cr, up 3.2% yoy and 2.3% qoq. EBITDA margin contracted by 247bps yoy and 145bps qoq to 13.6%. (ET).
Economy and Sector News
Ford India on Friday has said that it will be recalling 22,690 previous-generation Endeavour models made at the company’s Chennai plant between February 2004 and September 2014, to inspect on the faulty front airbag inflators. (BL).
With monsoon rain deficit worsening to 17 per cent, kharif planting in many parts of the country was adversely hit this week and the total area covered so far remained 567 lakh hectares (lh), nearly 7 per cent lower than 609 lh planted during the corresponding period last year, according to sowing data released by the Agriculture Minister on Friday. In more news, Asian Development Bank (ADB) has lowered the inflation forecast for India during the current financial year to 4.1 per cent, on the back of gain in rupee and cut in the country’s GDP projection. India will be the main driver to lower the inflation for the South Asian region, ADB said in a supplement Asian Development Outlook (ADO) 2019. (ET).
As many as 345 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.28 lakh crore owing to delays and other reasons, a report said. In more news, in a study on ways to boost merchandise exports,  the Confederation of Indian Industry (CII) has identified 31 items with high potential for exports such as women’s apparel, drugs, cyclic hydrocarbons and furniture. (BL).
Foreign portfolio investors (FPIs) pulled out around Rs.7,712 crore from Indian equities in this month so far following the ‘super-rich’ tax announced in the budget for 2019-20, according to analysts. FPIs had been net investors in the equity segment in the previous five months. According to the latest data available with depositories, a net sum of Rs.7,712.12 crore has been pulled out from equities during July 1-19. However, foreign portfolio investors (FPI) pumped in Rs.9,371.12 crore in the debt segment during the period. This has translated into a net investment of around Rs.1,659 crore in July so far into the capital markets (both equity and debt). (ET).
* ET - Economic Times, BS - Business Standard, BL - Business Line, TOI - Times of India, Mint, IE - Indian Express, BT - Business Today, IE - Indian Express
Global Markets
 

DJIA and NASDAQ Composite

US markets lower on Friday, with the S&P 500 and the Nasdaq posting their worst week since May. The Dow Jones Index closed at 27,154, down 68.77 points by 0.25%. The Standard & Poors 500 index closed at 2,977, down 18.50 points by 0.62%. The Nasdaq Composite Index closed at 8,146, down 60.75 points by 0.74%.

FTSE 100

UK markets sneaked into the green by the close on Friday, as investors digested news that public sector net borrowing in the UK rose sharply in June and continued to react to Fed developments stateside overnight. The FTSE 100 index closed at 7,509, up 15.61 points by 0.21%.

 
 
Global Indices
19/07/2019 Clsg Chg%
Dow Jones 27,154 -0.25
NASDAQ 8,146 -0.74
FTSE 100 7,509 +0.21
Bovespa 103,452 -1.21
22/07/2019 Latest
(5:37AM IST)
Chg%
Nikkei 21,467 +2.00
Hang Seng 28,765 +1.07

Nikkei

Asia stocks eased on Monday as investors reduced expectations of an aggressive interest rate cut by the Federal Reserve, while heightened Middle East tensions following an Iranian seizure of a British tanker lifted crude oil prices. Nikkei is currently trading at 21,467, up 420.75 points by 2.00%.

Precious Metals

Gold slipped from a six-year high as the dollar firmed and as expectations for a deep rate cut by the Fed were dialed back on Monday.

Base Metals

Copper inventories held in Shanghai Futures Exchange-approved warehouses increased by 6.4% week on week as of Friday July 19 amid weak domestic demand and renewed concerns over the possible escalation of trade tensions between the United States and China, the world’s two largest economies.

Crude Oil

Oil prices rose on Monday amid high tensions in the Middle East after a British tanker was seized by the Iranian military at the end of last week.

 
 
 

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Disclosures
ACMIIL/its associates and its Research analysts have no financial interest in the companies covered on the report. ACMIIL/ its associates and Research analysts did not have actual/beneficial ownership of one per cent or more in the companies being covered at the end of month immediately preceding the date of publication of the research report. ACMIIL/its associates or Research analysts have no material conflict of interest, have not received any compensation/benefits for any reason (including investment banking/merchant banking or brokera3ge services) from either the companies concerned/third parties with respect to the companies covered in the past 12 months. ACMIIL/its associates and research analysts have neither managed or co-managed any public offering of securities of the companies covered nor engaged in market making activity for the companies being covered. Further, the companies covered neither are/nor were a client during the 12 months preceding the date of the research report. Further, the Research analyst/s covering the companies covered herein have not served as an officer/director or employee of the companies being covered.

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This report is based on information that we consider reliable, but we do not represent that it is accurate or complete and it should not be relied upon such. ACMIIL or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in the report. To enhance transparency we have incorporated a Disclosure of Interest Statement in this document. This should however not be treated as endorsement of the views expressed in the report.