MOSt Market Outlook 28th July 2020 Morning Update Indian Indices CMP 1 D (%) YTD (%) Expect market to open on a positive note on account of global cues. Rally in the US market and strong opening Asian mar- Sensex 37,935 -0.5% -8.0% kets will be positive for the market sentiment. U.S. stocks rose Nifty 11,132 -0.6% -8.5% on Monday as investors bet that the largest technology firms BSE Mid Cap 13,565 -1.0% -9.4% will power ahead in an uncertain economic environment. The BSE Small Cap 12,840 -1.0% -6.3% Dow Jones climbed 0.4% and Nasdaq Composite Index jumped 1.7%. However European equities fell, extending last week’s Global Indices CMP 1 D (%) YTD (%) decline, as new outbreaks of coronavirus infections in the Dow 26,585 0.43% -6.8% region fueled concerns about efforts to contain its spread, Nasdaq 10,536 1.67% 17.4% with airlines and other travel-exposed stocks leading the re- FTSE 6,105 -0.31% -19.1% treat. Both FTSE and CAC Index declined 0.3% each. Asian Nikkei 22,802 0.38% -3.6% stocks open on a strong note ahead of a US Federal Reserve Dax 12,839 0.00% -3.1% meeting where policy makers are expected to reinforce their dovish message. Gold extended gains after hitting an all-time MOSL Estimates FY20 FY21E FY22E high. Taiwan and South Korea Index surged 3% and 2% re- spectively. Both Nikkei and Hong Kong Index gained 0.5% and NIFTY EPS 472 454 637 1% respectively. US Dow Future is up 0.3% and SGX Nifty gained Nifty P/E 23.6 24.5 17.5 0.5% points Last Close Prev. Close Derivatives Snippet Nifty PCR 1.49 1.74 3 Nifty July future closed at 11122.45 with a discount of 9.35 India VIX 25.02 24.54 points v/s 23.90 points discount in last session. CBOE VIX 24.74 25.84 3 Nifty futures OI decreased by 2.31% to 1.31 Crore while Bank Nifty futures OI increased by 0.49% to 18.14 Lakhs. Nifty 50 Top Gainers Symbol LTP % Chg 3 Nifty Put/Call Ratio (OI) has decreased from 1.74 to 1.49 ASIANPAINT 1,773 3.5 3 India VIX moved up by around 2.10% below 25.05 levels. A HCLTECH 701 3.1 bounce in VIX is giving a pause in market momentum but INFY 947 2.6 overall lower volatility is supporting the bullish scenario and intraday declines are being bought in the market. ULTRACEMCO 3,870 2.3 TCS 2,205 2.2 3 On option front, Maximum Put OI is at 11000 followed by 10000 strike, while maximum Call OI is at 11500 followed Nifty 50 Top Losers by 11200 strike. We have seen Call writing in 11200 and Symbol LTP % Chg 11700 strikes, while minor Put writing is seen at 10900 ICICIBANK 359 -6.1 and 10950 strike. Option data suggests an immediate trad- ZEEL 146 -4.0 ing range in between 11000 to 11400 zones. HDFCBANK 1,080 -3.5 Actionable: AXISBANK 432 -3.1 Technical Trading Idea - Buy : Infosys INDUSINDBK 507 -2.9 (CMP : 948 SL : 918 TP : 1,010) Sectoral Outlook SECTOR OUTLOOK Security in Ban period: IT Positive ADANIENT,BHEL,CANBK,GMRINFRA,IBULHSGFIN OIL & GAS Positive IDEA,INDUSINDBK,RBLBANK,SAIL MOSt Market Outlook 28th July 2020 Market Action BSE 500: Top 10 Gainers BSE 500: Top 10 Losers Stocks LTP % Change Stocks LTP % Change PERSISTENT 857.3 10.9 ISEC 487.1 -9.3 DEEPAKFERT 143.6 7.5 M&MFIN 128.9 -8.9 LTI 2415.0 6.1 UJJIVAN 229.2 -7.2 GMM 4204.0 5.7 EQUITAS 52.8 -7.1 INOXLEISUR 254.0 5.7 REDINGTON 91.1 -6.3 JINDALSTEL 177.0 5.6 ICICIBANK 358.5 -6.1 SIS 364.1 5.3 GHCL 143.0 -6.0 TCIEXP 722.4 5.3 TRIDENT 6.6 -5.6 KAJARIACER 424.5 5.0 INDIANB 56.8 -5.5 SWSOLAR 236.4 5.0 MAHLOG 293.0 -5.5 Stock Near 52 Week Hig Stock Near 52 Week Low Symbol LTP 52 wk High 52 Wk High (%) Symbol LTP 52 wk Low 52 Wk Low (%) Mindtree 1,050 1,063 -1.2 Pidilite Industries 1,356 1,186 14.4 Muthoot Finance 1,363 1,377 -1.0 Vardhman Textiles 649 601 8.0 Vaibhav Global 1,312 1,360 -3.5 Cera Sanitaryware 2,273 1,986 14.5 PI Industries 1,769 1,838 -3.8 Coal India 130 119 9.0 FII & DII - Cash Activity (INR in Cr) Provisional FII & DII - F&O Activity (INR in Cr) Institution Net B/S OI Category 27-07-20 24-07-20 23-07-20 FII -453 410 1741 INDEX FUTURES 499.92 Short covering DII -978 -1003 -932 INDEX OPTIONS 206.8 Put buying STOCK FUTURES -147.8 Short built up MOSt Market Outlook 28th July 2020 Fundamental Update Global Market Summary 3 U.S. Dow closed 115 points up (0.43%) yesterday 3 Dow Fut is trading 80 points positive currently 3 European indices closed down 0.3% yesterday 3 Today the Asian indices are trading up in the range of 0.3% to 1.7% Domestic Positive Indian Market Summary 3 Nifty closed 62 points down at levels 11132 yesterday 3 FIIs sold shares worth Rs.453cr while DIIs sold shares worth Rs.978cr yesterday 3 India VIX closed at 25.02 levels (up 1.97%) yesterday 3 Currently SGX Nifty is trading 60 points up from previous close. Domestic Cues: Positive News & Impact 3 Dr. Reddy's: The drugmaker announced that it has received approval of XEGLYZE lotion from the U.S. FDA. The approval triggers the contractual pre-commercialisation milestone of $20 million payable to Hatchtech Impact : Positive 3 Bharti Airtel: Hughes Network Systems, led by the U.K. Government and Bharti Enterprises, will acquire OneWeb out of bankruptcy. Hughes has agreed in principle to invest $50 million in the consortium Impact : Positive 3 Results Today: Nestle, Ultratech Cement, Indusind Bank, Quess Corp, RBL Bank MOSt Market Outlook 28th July 2020 Fundamental Update Coromandel International (CMP: 790 TP: 908 BUY) 3 Higher fertilizer demand on better kharif season drives overall performance 3 Coromandel International reported robust performance, led by higher manufacturing volumes (+61% YoY), higher crop protection revenue, and operating leverage. 3 PAT more than quadrupled on higher EBITDA, lower tax rate, and lower interest cost. 3 Normal southwest monsoon predictions for the current year have augured well for the consumption of fertil- izers and agrochemicals, thus providing a good start to FY21. 3 We expect revenue/EBITDA/PAT CAGR of 10%/14%/18% over FY20-22E. We value CRIN at 18x FY22E EPS to arrive at TP of INR908. View: Buy Tech Mahindra (CMP: 664 TP: 750) 3 TechM's resilience in revenue, especially in Enterprise, is encouraging given the current context. Decline in Communications (8.2% QoQ) was on expected lines given the overhang in Network Services. The margin surprise was led by better-than-expected control on SG&A costs. 3 Despite the elongated decision-making cycles, the company hinted at improving deal pipeline. Revenue and margins are expected to improve from hereon. Ramp-up in recently won mega deals was largely on track, a key positive. 3 We upgrade our EPS estimates over FY21-22E by 17% as we revisit our growth and margin trajectory in light of the surprise in 1QFY21 and optimistic commentary. 3 Accordingly, we see some headroom for the P/E multiple of TechM to catch up. We value the stock at ~14x FY22E EPS View: Positive MOSt Market Outlook 28th July 2020 Nifty Outlook Nifty index opened positive but failed to surpass imme- diate swing high of 11240 and drifted towards 11090 zones. It witnessed recovery of 40 points from lower levels but closed the session with the loss of around 60 points. It formed a Bearish Belt Hold candle as it made an opening high and witnessed selling pressure during the session. It has been consolidating in between 11050 to 11240 zones from last five trading sessions in which declines are being bought while follow up is missing. It requires a decisive range breakout for the next leg of rally. Now it has to continue to hold above 11050 to extend its move towards 11240 then 11333 and 11500 zones while on the downside key support exists at 11000 levels. Bank Nifty Outlook Bank Nifty opened flattish but corrected sharply towards 21800 zones by falling 3.5% during the day. It formed a Bearish Belt hold candle with formation of lower highs from last three trading sessions. RSI indicator has given a sell signal by negative crossover on daily scale. Now it need to cross and hold above 22000 to witness an up move towards 22500 then 22750 zones while on the downside supports are seen at 21500 levels. Indices - Support/ Resistance Level CMP R1 R2 S1 S2 NIFTY 11,132 11,250 11,333 11,050 11,000 BANKNIFTY 21,849 22,500 22,750 21,500 21,250 MOSt Market Outlook 28th July 2020 Technical Trading Idea Infosys BUY Duration : 2-3 Days Reco CMP SL Target Duration Buy 948 918 1,010 2-3 Days 3 Infosys is moving in a strong uptrend and sustaining above its major breakout on weekly and monthly chart. Currently, stock is moving at record highs and gave breakout from a Bullish Pennant pattern, which is a trend continuation pattern.