22 June 2021, Pre Market Report: The calm before the storm?

Good Morning everyone to yet another exciting trading day. It indeed is going to be a great day today as the Global markets have recovered similar to how the Indian market went up yesterday, as mentioned in the Post-market report yesterday. Click here to read it, if you missed it.

I believe that sectors that are looking strongest on the medium to long-term charts and are expected to outperform in the coming weeks are IT, FMCG, pharma, and metals. Keep a note on metals as they have been falling for some time, and today will the allotment of Shyam Metallics IPO, and if we see a good listing gain in the IPO when the stock gets listed on 24th June 2021, we might see the metal sector going up again.

In the US market, Dow Jones had one of its biggest rallies last night and went up by almost 586 points which were majorly led by the energy stocks and financial stocks as the jitters from the FED interest rates subdued. With this, we can expect a good rally in the Indian market today also, but there we do have some resistance at around 15750 & 15900 which needs to be crossed to help further rally to 16000. Let us keep a watch on it.

Shares in Asia-Pacific rose in today morning's trade following big gains overnight for the Dow Jones on Wall Street. In Japan, the Nikkei 225 jumped 1.82 percent in early trade, partially recovering from its more than 3 percent tumble Yesterday. South Korea’s Kospi advanced 0.72 percent. And in Australia, the S&P/ASX 200 edged 0.32 percent higher. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.18 percent higher.

However, another good news for us is that the Corona cases in India is coming down and the aviation industry has been experiencing increased passengers comparatively and once more states open up from lockdown, A total of 1,32,309 passengers flew in 1,245 flights on Sunday, the highest in June, so far. The number of daily departures also crossed the 1,000mark on June 11 after a gap of over a month, indicating signs of recovery. we can expect the share prices of Indigo, Spicejet, and related sector shares to go up in the coming days.

As we go for another unlock, the other sector to be watched out for is the FMCG & Auto sector, which had been underperforming for a long time now. They can recover sharply now as their demand will rise soon. Keep a watch on Tata Motors, Maruti, Mahindra, and so on for the auto sector and ITC, Marico, HUL & so on for the FMCG sector.

Trends on the SGX nifty suggest that the market will open with a gap up of about 50 points, which will help the market cross the 15750 resistance that we spoke about earlier. I there is an initial selling, then the index may take support at around 15750 to bounce back. But if 15750 is breached below, we might see some more correction. However, remember that this Thursday is the monthly expiry and that will lead to huge volatility in the market. Of course, we don't worry about it as we are long-term investors.

Results on June 22

NMDC, Ashapura Minechem, Aster DM Healthcare, Bharat Electronics, BL Kashyap and Sons, Gandhi Special Tubes, GE Power India, ITI, Jaypee Infratech, Max India, Omax Autos, Peninsula Land, PNB Gilts, Religare Enterprises, and Sobha.

FII and DII data

Foreign institutional investors (FIIs) net sold shares worth Rs 1,244.71 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 138.09 crore in the Indian equity market on June 21.

Stock Specific News

Bharti Airtel | The company has announced a strategic partnership with Tata Group for implementing 5G network solutions for India.

State Bank of India | The central board of the bank accorded approval for raising fresh Additional Tier 1 (AT 1 ) capital up to an amount of Rs 14,000 crore subject to government concurrence.

PNB Housing Finance | The Securities Appellate Tribunal (SAT) has allowed the company to hold its EGM (Extraordinary General Meeting) scheduled today which would vote on the company’s Rs 4,000 crore deal with a consortium led by private equity giant Carlyle. However, the tribunal said the bank cannot declare the results of the voting till further orders are passed by it.

United Breweries | The Competition Commission of India (CCI) has approved Heineken International BV’s proposed acquisition of an additional equity stake in the company.

Dish TV India | The company’s board approved the raising of funds up to Rs 1,000 crore through a rights issue, at a price of Rs 10.

Oil India | The company’s Q4FY21 consolidated net profit fell 27.1 percent to Rs 1,142.4 crore from Rs 1,567.8 crore, while revenue rose 2.8 percent to Rs 6,505 crore from Rs 6,330 crore, QoQ.

Indian Bank | The bank has launched its qualified institutional placement (QIP) of shares to raise around Rs 4,000 crore, setting the floor price at Rs 142.15 per share.

Adani Transmission | The company will seek shareholders nod to raise up to Rs 2,500 crore in one or more tranches through the issuance of equity shares, securities, debentures, etc in its annual general meeting on July 13.

VST Tillers Tractors | The company reported profit at Rs 12.93 crore in Q4FY21 against a loss of Rs 3.38 crore in Q4FY20. Revenue rose to Rs 194.74 crore from Rs 119.80 crore, YoY.

MM Forgings | The company’s Q4FY21 net profit jumped to Rs 34.1 crore from Rs 3 crore, while revenue increased 75.9 percent to Rs 293.3 crore from Rs 166.7 crore, YoY.

Jaiprakash Associates | The company’s Q4FY21 consolidated profit fell to Rs 424.41 crore from Rs 3,068.10 crore, while revenue rose to Rs 2,517.2 crore from Rs 1,876.03 crore, YoY.

Nitco | The company has defaulted on the payment of interest and principal amount of two-term loans totaling Rs 500 crore.

Brigade Enterprises | Authorised opening of QIP from June 21. The floor price set at Rs 276.50 per share is at a discount of 0.84% to Monday’s closing price. Committee of Directors to meet on June 25 to approve the issue price.

Delta Corp | The casinos operated by the company and its subsidiaries in Goa and Sikkim will remain closed till June 28 as the states have extended the lockdowns due to a surge in Covid-19 cases.

KPIT Technologies | To acquire a controlling stake in PathPartner Technology. The company will acquire a 60% stake for Rs 89 crore and the balance stake is proposed to be acquired over a period of 2 years against defined growth targets. The company will pay around Rs 191 crore for the 100% stake. The deal is expected to be completed in the second quarter of FY22.

With all this info, I am sure you are ready for the market today with complete confidence. Let us discuss more in our group & grow together.

-Srikant Rajan