F&O expiry: Sensex slips 38 pts at 35,867, Nifty at 10,792; IT stocks drag

All that happened in the markets today

9:48 AM

Sebi to tighten takeover regulations for companies under IBC process

The Securities and Exchange Board of India (Sebi) plans to tighten takeover norms applicable to companies undergoing proceedings under the Insolvency and Bankruptcy Code (IBC). Sources said the capital markets regulator would do away with the provision that allowed a ‘competent authority’ to exempt an acquirer from the requirement of an open offer. Only a court or a tribunal would be allowed to provide such exemptions, they added. READ MORE

9:41 AM

NEWSALERT | BoJ and RBI sign swap arrangement for local currencies against $

The Bilateral Swap Arrangement (BSA) enables both countries to swap their local currencies (i.e., either Japanese yen or Indian rupee) against US dollar for an amount of up to $75 billion.

9:31 AM

Nifty Pharma index is trading 0.61% higher led by gains in Cadilahc

9:27 AM

Jet Airways down 4% in early trade

9:26 AM

Sectoral trends on NSE

9:22 AM

Top gainers and losers on S&P BSE Sensex

9:18 AM

Market at open

At 9:17 AM, the S&P BSE Sensex was trading at 36,062, up 155 points while the broader Nifty50 was ruling at 10,847, up 40 points.

9:17 AM

FII watch

FIIs remained active in the derivatives a day prior to F&O expiry, but they didn't show any strong bias. However, in index futures their activity was more inclined towards longs where the exposure rose by 9417 contracts, while shorts added positions by 4326 contracts.

In index options activity was distributed among synthetic longs and synthetic shorts, where the exposure rose by 27185 contracts and 30949 contracts respectively. This was on the backdrop of focussed activity in Put options where the open interest rose in both longs and shorts by 29535 contracts and 22805 contracts respectively.

(Source: Geojit Financial)

9:12 AM

SPECIAL REPORT :: What FPIs, DIIs bought and sold in the Dec quarter

FII holdings increased to 24.4% for the Dec 2018 quarter vs 24.2% in the previous quarter, and decreased from 24.7% in the corresponding quarter of the past year. Domestic institutional investors’ (DII) holdings increased to 14.1%, vs 13.4% in the previous quarter and rose from 12.7% in the corresponding quarter of the past year

Among the Nifty top-five stocks, FII holdings increased in the Dec 2018 quarter vs the Sept 2018 quarter for: Dr Reddy’s Lab to 29.7% from 26.8%, GAIL to 20.6% from 18.5%, Indusind Bank to 47.9% from 46.6%, Bharti Infra to 43.4% from 42.3% and Hero MotoCorp to 40.0% from 38.9%.

The top five stocks where FII holdings decreased were: Yes Bank to 36.2% from 39.5%, Grasim Industries to 21.2% from 23.5%, BPCL to 14.6% from 16.9%, Axis Bank to 45.9% from 48.2% and ICICI Bank to 32.1% from 34.0%.

(Source: Nomura)

9:02 AM

Market at pre-open

9:02 AM

SECTOR WATCH :: CEMENT

Apart from the 77mt of additional capacities, dormant plants like Kalyanpur and Murli should also come on stream over FY19-21. The recent ramp-up of Binani’s assets and its brownfield capacity augmentation will also be a key monitorable. 

The eastern region should witness maximum amount of capacity addition, to the extent of 26mt over FY18-21, followed by the southern region witnessing an addition of 20mt. The northern region seems to be better placed and should witness capacity addition of only 6mt over the period. As a result, cement utilization should improve 14pp to 84%.
 

~34mt of clinker capacity is expected to get added over FY19-21. The western region is expected to witness the least clinker addition, followed by the eastern region. Highest amount of clinker addition is expected in South India.

(Source: Motilal Oswal Securities)

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9:01 AM

Rupee opening

Rupee opens flat at 71.26/$ vs its previous close of 71.24 against the US dollar

9:00 AM

Stocks which may see some volatility on expiry day

Vedanta (VEDL IN): Rollovers in VEDL stand at 44% which is on the lower side as compared to the market average. The near month OI of ~31mn shares is 2.1 days average daily volume in cash market. Roll cost of -30bps (cost to short roller unadjusted for dividend). As the company has a history of declaring high dividend payout in March, we expect the long futures holders to convert futures into equity in the VWAP tomorrow.

 

HDFC (HDFC IN): The counter has seen 60% positions getting rolled over with near month OI at ~11.77mn shares which is 4.3 days average daily volume in cash market. Fresh arbitrage positions (Buy Cash & Sell Futures) have been set up during the month. With rolls happening at ~27bps (profit to short rollers) which is low for the short rollers, we expect selling by the arbitrageurs in cash in the VWAP tomorrow in the event of levels staying lower.

 

Hero MotoCorp (HMCL IN): Rollovers on the D-1 stands at 58%. Near month OI at ~1.1mn shares which is 1.5 days average daily volume in cash market. The stock has seen fresh arbitrage positions (Buy Cash & Sell Futures) during the month. With rolls happening at ~37bps (profit to short rollers) which is low for the short rollers, we expect selling pressure by the arbitrageurs in cash in the VWAP tomorrow if levels don’t move up.

(Source: Edelweiss Research)

8:59 AM

Rollover stats

With F&O market expiry, MSCI Index rebalancing and some action by the Bharat 22 ETF arbitrageurs all lined up together, we expect tomorrow’s session to be a charged up one laced with both volatility and volumes.

 

We expect arbitrageurs to redeem units of the recently concluded ETF offering so as to unwind the arbitrage positions and hence the ETF components are likely to be under pressure tomorrow.

 

The offsetting flow from MSCI rebal in couple of names may offer some comfort to the selling pressure in ETF components. Couple of stocks where some action is expected in the VWAP due to low rollovers are VEDL, HDFC and HMCL

(Source: Edelweiss Research)

8:58 AM

Emkay Global on oil & gas sector

The Petroleum and Natural Gas Regulatory Board (PNGRB) has declared winners under the 10th City Gas Distribution (CGD) bidding round. AG&P/IOCL/HPCL won the highest number of geographical areas (GA) at 9 each. In our coverage universe, Gujarat Gas/ Indraprastha Gas won 6/3 areas. GAIL Gas/Torrent Gas/Adani Gas/IOCL Adani JV (IOAGPL)/BPCL won 4/3/2/1/2 areas, while Think Gas/Rajasthan State Gas won 1 each

The winning areas should add up to long-term growth of GGL/IGL, although we await more clarity on capex, volumes and margins. PNGRB will release the physical targets, after which management guidance would be clearer on the above parameters. We retain our earnings estimates while reiterating Buy/Hold on GGL/IGL with Rs170/325 as the target price