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All You Need To Know Going Into Trade On Sept. 28

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Asian stocks were mixed at the start of trading Friday, with Japanese shares outperforming thanks to a slide in the yen to the weakest level this year.

Shares in Australia and South Korea were flat, while futures indicated gains at the open for China and Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.35 percent to 11,081 as of 7:20 a.m.

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U.S. Market Check

  • U.S. stocks climbed and the dollar jumped to a two-week high after the Federal Reserve cited a strong economy when it raised interest rates.
  • The yield on 10-year Treasuries was little changed at 3.04 percent. It began the month at 2.86 percent.

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Europe Market Check

  • European shares reversed earlier losses to post a third day of gains as U.S. markets opened higher on signs of solid economic growth.

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Asian Cues

  • Japan’s Nikkei 225 rose 0.8 percent.
  • Australia’s S&P/ASX 200 Index gained 0.4 percent.
  • South Korea’s Kospi slid 0.2 percent.
  • FTSE China A50 futures advanced 0.3 percent.
  • Futures on Hong Kong’s Hang Seng Index climbed 0.7 percent.

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Commodity Cues

  • West Texas Intermediate crude advanced less than 0.1 percent to $72.15 a barrel.
  • Brent crude traded 0.15 percent lower at $81.60.
  • Gold was at $1,183.58 an ounce.

Shanghai Exchange

  • Steel traded lower for the sixth day; down 3.6 percent at two-month low.
  • Aluminium traded lower for the fourth day; down 0.9 percent.
  • Zinc traded lower for the second day; down 0.3 percent.
  • Copper traded lower for second day; down 0.9 percent at one-week low.
  • Rubber traded lower; down 0.9 percent.

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Indian ADRs

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Stocks To Watch

  • JSW Steel will replace Lupin in the benchmark NSE Nifty 50 Index today. The Sajjan Jindal-led company will join Tata Steel Ltd., the only other steelmaker in the index.
  • Thyssenkrupp AG considered splitting into two companies by spinning off non-steel operations. In the eventuality of such an event, Thyssenkrupp would give existing investors shares of a company that combines elevators, industrial solutions and the components-technology business via an in-kind dividend. Thyssenkrupp would keep a minority stake in the so-called capital goods company, its raw materials trading unit and a 50 percent stake in the steel joint venture with Tata Steel Europe. (Bloomberg News)
  • Yes Bank clarified that the bank had not entered into any transaction with the intention of window dressing of corporate accounts to conceal its NPA status. The bank also stated that it has no dealings with it’s three sister family offices, which was allegedly used as a conduit to undue benefits for credit exposure. Further the lender stated all disclosures to stakeholders on NPA divergence was being done on a timely basis.
  • Astec Lifesciences announced that the start of the commercial operations of its manufacturing plant in Maharashtra. This unit had been set up to manufacture and supply agrochemicals and intermediates.
  • Kesoram Industries received approval from the Karnataka government for acquisition of 675 acres of land for mining activities). The company said that the acquisition would augment its existing reserves of limestone.
  • Karnataka Bank launched QR coded two-wheeler insurance product in association with Bajaj Allianz General Insurance. The bank said that paperless and instant two-wheeler insurance policy could be issued in two minutes now.
  • Reliance Communications clarified that Paytm’s parent company-One97 Communications has filed petition in NCLT for dues worth Rs 20.25 crore against the telecom operator’s two arms. The matter is due for a hearing on Oct. 26.
  • Redington said it will buyback 1.1 crore shares representing 2.78 percent of the total number of equity shares at a price of Rs 125 per share. The buyback amount aggregates to Rs 139 crore. The record date is set for Sept. 28.
  • Central Bank invoked pledge on the shares of Rolta India’s arm. The arm had pledged 2.5 crore equity shares held by parent Rolta India. The bank had sanctioned credit facilities worth Rs 56 crore to the arm. Invoking of pledge of these shares started from Sept. 19 as the total number of shares held in the books of the book crossed 5 percent. The bank stated that Rolta India’s arm recently defaulted in servicing of interest, principal repayment and margin requirement.

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Offerings

  • Garden Reach Shipbuilders’ IPO get 72 percent demand for shares offered extended till Oct. 1 and cuts price band.
  • Aavas Financers’ IPO got subscribed 0.97 times on its final day of bidding.
  • Dinesh Engineers IPO opens with issue priced between Rs 183 and Rs 185.

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Bulk Deals

  • Dewan Housing Finance Corporation: BNP Paribas Arbitrage acquired 49 lakh shares or 1.56 percent at Rs 296.28 each.

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Who’s Meeting Whom

  • Endurance Technologies to meet Motilal Oswal AMC and SBI Funds Management on Sept. 28.
  • Abbott India to meet Reliance MF, Tata AMC and other investors on Sept. 28.
  • Gujarat Pipavav Port to meet Deutsche Equities India on Sept. 28.
  • Cipla to meet William Blair, Franklin Templeton and Mirae Asset Management on Sept. 28.
  • Godawari Power and Ispat to meet Bajaj Allianz, ICICI Pru MF and other investors on Sept.28.
  • TVS Motor to meet Morgan Stanley on Sept.28.

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Insider Trades

  • Nocil promoter sold 1.32 lakh shares from Sept. 25-26.
  • Elpro International promoter acquired 5 lakh shares on Sept. 25.
  • Eveready Industries promoter Williamson Magor & Co acquired 2 lakh shares on Sept. 25.
  • Sadbhav Engineering promoter acquired 84,000 shares on Sept. 26.
  • Omaxe promoter group Nakul Goel sold 2.3 lakh shares from Sept. 24-25.
  • Godrej Properties promoter Godrej Industries acquired 1.65 lakh shares from Sept. 24-25.
  • Lemon Tree Hotels promoter acquired 75,000 shares on Sept. 25.

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Money Market Update

  • The rupee ended steady around 72.60 per dollar. The home unit gained marginally after government hiked import duty on certain goods. The currency is poised to depreciate for the fifth straight week against the dollar.
  • The sovereign bond gained for the second day as yields drop further to 8.03 percent. The 10-year benchmark bond yields have dropped nearly 10 basis points in last two sessions.

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F&O Cues

  • Nifty September futures closed trading at 11,030 at premium of 52 points.
  • October series: Nifty open interest up 60 percent; Bank Nifty open interest up 97 percent.
  • Nifty rollover at 63 percent, Nifty Bank rollover at 66 percent.
  • India VIX ended at 16.9, down 1 percent.
  • Max open interest for September series at 11,200 strike value call option (open interest at 25.2 lakh, open interest up 26 percent)
  • Max open interest for September series at 11,000 strike value put option, (open interest at 25.3 lakh, open interest up 21 percent)

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Put-Call Ratio

  • Nifty PCR at 0.93 versus 1.09.
  • Nifty Bank PCR at 0.52 versus 0.74 .

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Brokerage Radar

Macquarie on Indian Auto

  • Expect slower retail sales growth in September.
  • Maruti Suzuki – discounts increased marginally.
  • Customer promotions remained flat for two wheelers on a monthly basis.
  • Royal Enfield – 2-4 weeks order backlog remains.

UBS on NBFCs

  • Liquidity crisis unlikely but end of benign liquidity to impact growth and NIMs.
  • ALM mismatches to hurt margins; Expect growth outperformance to moderate.
  • NBFCs directly competing with banks to be adversely impacted.
  • Top picks – Shriram Transport, M&M Finance, HDFC; Downgrading Cholamandalam to Sell.

Macquarie on Indiabulls Housing

  • Maintained ‘Outperform’; cut price target to Rs 1,400 from Rs 1,599.
  • Balance sheet comfortable; Some impact on spreads and growth.
  • Liquid assets are 1.25 times its next six months’ debt servicing obligations.
  • Cut EPS estimates marginally and expect slowdown in loan growth.

Emkay on Jindal Stainless

  • Maintained ‘Buy’ with a price target of Rs 151.
  • Well-positioned for delivering superior results.
  • Capacity to ramp-up to 1.1 MTPA from 0.8 MTPA by debottlenecking existing facility.
  • Expect reduction in logistics costs and ramp-up in captive chrome ore mining capacity.

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