Markets Witness A Rise In Intra-Day Volatility | Trade Setup: August 14
Trade Setup | Market likely to trade cautiously ahead of India’s #inflation data. FII flows turn choppy as markets struggle to maintain upward bias. #BQLive
Transcript
00:00 Hello and welcome to BQ Prime.
00:03 You're watching Trade Setup and I am Heeral Dadia.
00:06 Clearly, if you go to see in terms of global markets, Asia, yes, there is weakness as we
00:12 speak, but lots of cues that we are picking up in terms of the global headlines.
00:17 Let's first start with China's economic recovery.
00:19 Now, that is facing fresh risks from the property crisis that we have been speaking about as
00:26 well.
00:27 Asian markets continue to remain in focus.
00:30 And apart from that, if you see in terms of the China hedge funds, they have been in crisis
00:35 as well after the kind of losses that they have seen.
00:38 And you have US investors who are retreating back from the Chinese markets.
00:44 So that's going to be a little bit concerning overall from a China perspective, because
00:48 clearly, the China's economic recovery has been weighed down by a worsening property
00:54 slump as we spoke about, and with the latest data, which is showing little sign of a rebound
01:00 in growth.
01:01 Now, overall, the official figures that are due tomorrow are expected to show only moderate
01:07 increase in terms of industrial output, retail sales, as well as the fixed asset investments
01:13 as well.
01:14 So that's something that we will be eyeing as well in terms of the Chinese markets.
01:19 Coming on, important announcements coming in from the Japanese market as well.
01:24 And this is mainly in terms of Blackstone, which is actually eyeing more Japanese property.
01:31 And this is after selling $4.5 billion.
01:34 Now, the acquisitions team is back to business clearly, and the capitalizing on the foreign
01:40 interest in Japanese property to sell as well.
01:44 In fact, on the other part of the news in terms of Japan, we are picking up is that
01:49 they're preparing for its second typhoon in a week, with airline companies actually cancelling
01:54 flights and rail operators planning to halt some operations as well.
01:59 In fact, typhoon land is forecasted to make a landfall on Tuesday in central Japan near
02:04 Osaka, which is the country's largest metropolitan city as well.
02:09 So that's the news that we're picking up in terms of Japanese markets.
02:12 Overall from Singapore, if you go to see, it's interesting to see, Singapore is now
02:17 open to importing electricity from regional countries, including India.
02:21 And this is the Strats Times that has reported over the weekend.
02:24 And this is mainly to push to improve the energy security in the city-state.
02:29 In fact, the Energy Market Authority has welcomed the proposal to import as much as 4 gigawatt
02:34 of electricity into Singapore, according to the report.
02:37 Now, how much of it will come in from India and how big a positive it will be for the
02:41 Indian markets is something that we need to wait and watch and see.
02:45 But there could be some positive movement that could be seen in terms of Indian energy
02:50 players as well.
02:51 Coming to the EV space, you have Tesla, which has gone ahead and cut the price of its two
02:56 higher-end model by vehicles in China by 14,000 yuan, which is almost $1,900.
03:03 And this is the latest salvo in a bruising price war that we've seen as well.
03:08 In fact, overall, if you go to see the price of its model, Y-long range and performance
03:13 has been cut.
03:15 So that's going to be interesting to see how and what is the kind of impact it has in terms
03:19 of other EV sellers as well in the country, as well as other regions.
03:24 Moving on, you have SoftBank, who's in talks to buy Vision Fund's stake in Arm.
03:29 And they're planning to acquire the 25% stake in Arm, which is not directly owned from Vision
03:35 Fund, which is a $100 billion investment fund it raised in 2017.
03:41 So let's see what this means in terms of news.
03:43 Lastly, moving on, you have Goldman Sachs.
03:47 You know, the team is penciling in rate cuts to begin in the second quarter of 2024.
03:52 In fact, what they're saying is that the rate-settling FOMC is expected to skip a hike next month
03:58 and conclude at the November meeting that the core inflation trend has slowed enough
04:02 to make a final hike unnecessary.
04:05 And lastly, Coppermine of Freeport, that has been hit as well by cyber attack.
04:12 And that's something which has actually gone ahead and hit the production limit as well
04:19 in the country for the company.
04:21 In fact, the incident is affecting information systems.
04:24 The future operations could be impacted if the attack is prolonged, is what they have
04:29 indicated.
04:30 So let's see what's the impact on metal counters.
04:33 So this is the global news we've been picking up.
04:35 But quickly, in terms of global markets as well, as we mentioned, Asia has been trading
04:40 weak.
04:41 Nikkei has seen cuts of 9/10 of a percent.
04:43 Hong Kong has slid over 2%, as this is mainly on the back of the property sector sell-off.
04:48 So clear weakness coming in in terms of Asian markets.
04:51 If you see from a US market perspective, Dow Jones saw a move of around 100 points, which
04:56 is 3/10 of a percent.
04:58 However, you had S&P 500 as well as Nasdaq, which ended lower.
05:03 In fact, Nasdaq saw cuts of almost 7/10 of a percent on Friday.
05:08 And you had S&P 500, which ended with cuts of around 1/10 of a percent.
05:13 If you see in terms of European markets as well, they closed lower.
05:16 In fact, UBS has ended the Credit Suisse protection measures, and the shares were up around 4.7%
05:23 in terms of Europe.
05:24 So that's how the global market setup is looking like.
05:28 But one of the cues that we pick up in terms of gift nifty is going to be interesting to
05:33 see.
05:34 Let's see if we can just quickly pull up gift nifty for today's session as well, taking
05:39 cues from Asian markets and the global markets.
05:42 You are seeing gift nifty, which is indicating cuts of around 2/10 to 3/10 of a percent.
05:47 So an opening level of 19,428 below the 90,450 mark is what gift nifty is indicating in terms
05:55 of today's session.
05:57 Let's quickly look at markets as well, because clearly if you see the FI flows in the last
06:02 couple of trading sessions, they have absolutely remained choppy.
06:06 And in fact, in the month of August itself so far.
06:10 So what's happening is the support that was coming in from the FI is absolutely missing.
06:15 The markets are actually struggling to maintain that upward bias and that resistance is absolutely
06:21 coming in its way.
06:22 Volatility is what we've been witnessing over the last couple of trading sessions.
06:26 And what's interesting to see is that nifty, the moment it reaches its 20-day SMA, which
06:30 is its simple moving average, from those levels, it's constantly seeing selling pressure that's
06:36 coming in.
06:37 So buy on declines and sell on rally is the kind of strategy that the investors have been
06:43 adopting.
06:44 And what analysts are indicating is that as long as nifty stays below that 19,560 mark,
06:50 the weakness in the texture of the markets is something which is expected to continue
06:54 as well.
06:55 In fact, we have India's inflation data that is eyed.
06:59 So markets would trade cautiously as well ahead of the inflation data.
07:03 From a banking perspective, there is not much support coming in from the banking majors
07:07 as well.
07:08 In fact, it's interesting to see how the PSUs are performing the private banks in trade.
07:13 And it's clearly the PSU Bank Index has been in focus.
07:18 From a FII perspective as well, clearly they've been holding more short positions as compared
07:23 to long positions in index futures.
07:25 So that's an important factor that we need to wait and watch.
07:29 And that is giving you an indication as well with regards to the kind of activity that
07:33 the FIIs are actually adhering to.
07:36 I mean, they need to actually turn buyers and start picking up more longs as compared
07:43 to shorts to see that tight turn in the markets as well.
07:47 So that's the overall market set up.
07:49 But from an earnings perspective, a whole host of earnings that will be announced in
07:54 today's session.
07:55 So watch out for that list on your screens.
07:57 But the key ones from the list that you are seeing that we will be watching out for will
08:02 be Adibis Laboratories.
08:04 That stock has seen a good run up in the last couple of trading sessions from the Pharma
08:07 Bank.
08:08 So let's see how the earnings pan out.
08:09 ITC is going to be interesting to watch out for from this list as well.
08:14 So these two are interesting names.
08:15 Apart from that, you know, again, you have Indiabulls Housing Finance, Vodafone, any
08:20 announcements on that front will be interesting to watch out for.
08:23 Wacard, Senco, Sanghi Industries is also another one that we will be watching out for pretty
08:28 closely in trade today.
08:29 So these are the earnings today.
08:30 But let's quickly take a look at companies which have already announced numbers.
08:35 You have ONBC from the bigger market, strong margins and a strong profit number that ONGC
08:41 reported over the weekend.
08:42 So you could see some strong moves coming in there.
08:46 Revenues are down, though.
08:47 However, EBITDA margin and profits have doubled.
08:50 So that's an interesting number to watch out for in terms of ONGC and how the stock reacts
08:54 in trade.
08:55 NHBC was another bigger name that reported numbers.
08:57 Clearly, if you go to see a pretty, you know, silent move is what we've seen in terms of
09:03 NHBC.
09:04 But no major moves that could be expected from a market perspective.
09:06 The stock has run up a lot.
09:08 So there could be some profit booking that could be coming in in terms of NHBC in trade
09:13 today.
09:14 But let's look at a whole host of numbers which have actually seen a strong number this
09:19 time around, which could see a positive move in today's session.
09:22 You have the likes of NMTC.
09:24 Clearly, if you go to see the numbers are slightly above what the street was estimating,
09:30 especially with regards to the margin front, as well as in terms of the profit number on
09:37 the back of which you could see some positive moves in terms of NMTC.
09:40 ABB have seen an interesting move as well.
09:43 Overall, the numbers have been above estimates.
09:46 Clearly, the margins are 13.9 percent versus a 9.7 percent and a profit number which has
09:51 more than doubled is going to give it a boost in today's session.
09:55 So watch out for ABB pretty closely in trade from a positive momentum perspective.
09:59 JSPL as well.
10:01 Both the revenues are down.
10:03 But clearly, if you go to see, you know, overall, it has been slightly weak for the number.
10:08 So again, I think that's an error from my side in terms of JSPL that has come in in
10:13 terms of a positive number.
10:16 But there will be weakness on that one.
10:18 Marks and Pharma is another one.
10:19 We're in a good set of numbers.
10:21 A good move in terms of the margin side of the picture for a Marks and Pharma.
10:24 So watch out for that name pretty closely in trade.
10:28 On the weak side, you have potentially foods where the quarter has been absolutely weak,
10:31 a 64 percent drop in terms of profitability.
10:34 And if you see the margins, they've less, they've more than halved overall.
10:39 So there could be weakness on that one today.
10:41 Galaxy Subjects can also see profit booking.
10:43 The profits are down 25 percent.
10:46 Margins do have improved, but overall, all the other parameters are pretty weak in terms
10:50 of Galaxy's effect in today's session.
10:53 Efficient E-commerce, which is Nika, that's going to be an interesting one to watch out
10:58 for, because clearly, if you go to see from a numbers perspective, it's below what the
11:02 street was estimating.
11:03 Though you have seen an improvement that has come in on the margin front, the profitability
11:08 has dipped 26 percent as well, so no major surprise on Nika.
11:12 Sri Renuka is going to be interesting as well to watch out for on the weakness because the
11:17 losses have widened for the company.
11:20 But this has come in in spite of the margin, seeing some improvement on the operational
11:25 front.
11:26 So an interesting one to watch out for.
11:28 RCF is going to be another one wherein the revenues have taken a beating, margins have
11:33 taken a major beating and the profitability as well.
11:36 So major weakness that could be coming in in terms of RCF in today's session from a
11:40 stock perspective.
11:41 J Corp as well, similarly, margins as well as the profitability has taken a major beating
11:46 this time around.
11:47 MSTC as well, if you see the margins have come in at 37.14 versus a 41.68 and the profits
11:54 are down 34 percent.
11:56 And this is in line with the revenue and EBITDA, which has come in lower.
12:00 Now, it was interesting to see how Graphite India reacted to numbers just a couple of days
12:05 ago on the back of which you did see some bit of a weakness that did come in in HED,
12:09 which clearly gave you an indication that HED numbers would be weak as well.
12:13 And that's exactly what has transpired.
12:15 HED is again a weak number that we have seen.
12:18 In terms of other earnings, Nalco, Glenmark, Pfizer, Astral, IRFC, Voltas, you know, these
12:26 are a few of the other names where they have reported numbers, but it's slightly on a mixed
12:32 trend that we have seen.
12:34 So watch out for these names pretty closely in trade.
12:37 The direction is going to be interesting to watch out for on the back of the mixed set
12:40 of first quarter numbers that have been reported.
12:44 And very lastly, in terms of the stocks other than earnings that we will be watching out
12:48 for on the back of auto wins and MOUs, you have Sterling and Wilson, a Rs.1,130 crore
12:54 order that they have bagged.
12:55 NBCC has bagged an order worth around Rs.280 crores as well.
13:00 So watch out for this one pretty closely.
13:02 NLC, they have emerged as a successful bidder for North Dadu coal mine in Jharkhand.
13:08 SJBN has signed a MOA with the government of Arunachal Pradesh for five hydropower projects
13:14 and NHPC that has inked a MOA with the government of Arunachal Pradesh as well.
13:19 And this is again for hydroelectric projects in Arunachal Pradesh.
13:24 On the back of leadership changes, you could see some pressure in terms of Reddington where
13:27 Aditya Shrivastava has resigned as M.D. with immediate effect citing personal reasons.
13:32 So the board is now going to initiate a search for the vacancy at the earliest.
13:37 RBL Bank has welled you up as chief operating officer, which is Pankaj Sharma, who has resigned.
13:42 He will be relieved from his duties on the 20th of September.
13:46 And you have Alok Rastogi, who will now handle the operations directly, who has been the
13:52 head of corporate center.
13:54 In terms of other earnings, watch out for Reliance Industries.
13:56 You have Geo Platforms Arm, which is Radices, who has completed the acquisition of wireless
14:01 broadband solutions from Mimosa.
14:03 And this was for around $60 million on a cash-free basis.
14:08 CR Arm Silk Mills on the buyback approval, and the buyback is aggregating to Rs.108 crore,
14:15 will be in focus prices, Rs.650 per share.
14:18 Adani Ports as well, Adani and Deloitte have amicably agreed to end the client-auditor
14:23 contractual relationship between them.
14:26 And the company has supported MSKN Associates as the company's new auditor.
14:30 Geo Financial Services, the company has allotted shares to the Arial shareholders, but they
14:35 will be frozen.
14:37 So we'll await the listing dates for the same.
14:41 And Lupin, who has, you know, the second unit, which is manufacturing a facility in Maldiv
14:46 has successfully completed a GNP inspection by the US FDA.
14:52 So a whole host of names that will be in focus.
14:55 You know, I mean, the earnings, the earnings season is at the FAG end as well.
15:00 So lots to watch out for in terms of where markets are concerned.
15:03 But interesting is going to be whether we are going to find any direction or not, because
15:07 clearly choppy trade is what is on the cards.
15:10 It is truncated week.
15:11 Tomorrow is a holiday in Indian markets as well, being 15th of August.
15:15 So you would not see high volumes in today's session.
15:18 In fact, there could be that could be taking markets lower as well.
15:24 That's all that we have on this session.
15:25 Thanks for watching.
15:27 And lots more lined up on the other side.
15:28 Please stay tuned to Bitcoin.
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