Mitessh Thakkar of  recommends buying Mahindra & Mahindra with a stop loss of Rs 528 and target of Rs 546 and Reliance Industries with a stop loss of Rs 1262 and target of Rs 1300

Indian indices ended on a positive note on August 23 in hopes of a stimulus package from the government. Buying was seen in the metal, auto, pharma, infra and IT, while FMCG stocks remained under pressure.

Sensex was up 228.23 points at 36,701.16, while Nifty was up 88.00 points at 10,829.40. About 1,310 shares advanced, 1,125 shares declined, and 130 shares were unchanged.

IndusInd Bank, ITC, ICICI Bank, Eicher Motors and Kotak Mahindra Bank were among major losers on the Nifty, while gainers were Zee Entertainment, Vedanta, UPL, BPCL and Yes Bank.

According to the pivot charts, key support level is placed at 10,690.17, followed by 10,551.03. If the index starts moving upward, key resistance levels to watch out for are 10,915.47 and 11,001.63.

Nifty Bank closed at 26,958.7, down 684.85 points on August 23. The important pivot level, which will act as crucial support for the index, is placed at 26,610.43, followed by 26,262.16. On the upside, key resistance levels are placed at 27,257.13 and 27,555.57.

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India’s domestic air passenger traffic had slowed down in the June quarter as Jet Airways’ shutdown pulled the beleaguered airline’s capacity out of the system

Even so, last quarter’s financial results of InterGlobe Aviation Ltd and SpiceJet Ltd are nothing to complain about. InterGlobe runs IndiGo, India’s largest airline by market share.

One factor that helped last quarter was that the environment for yields, a measure of pricing, remained stronger. IndiGo surpassed Street expectation by clocking a 12.7% year-on-year improvement in its yields. On the other hand, a smaller rival, SpiceJet’s yield increased by 2%, falling short of estimates.

At the time of announcing results, SpiceJet said, “The airline’s operations remained stressed for a large portion of this quarter due to the continued grounding of its superior B737 MAX aircraft. This limited the airline’s ability to take its yields up, owing to passenger disruptions and re-accommodation; while simultaneously increasing its fixed costs on this category of aircraft."

“While Indigo’s domestic passengers carried grew by about 20%, international jumped by about 50%. Higher yields on international routes vacated by Jet Airways have also led to the divergence in yield growth between Indigo and SpiceJet," said analysts from Edelweiss Securities Ltd in a report on 21 August.

As such, capacity expansion helped both airlines clock handsome revenue growth. IndiGo’s revenues increased by about 45% and SpiceJet’s by 35%. On the profitability front, IndiGo’s Ebitdar, increased by a whopping 233% year-on-year to ₹2656 crore. Ebitdar is earnings before interest, tax, depreciation, amortisation and lease rentals. SpiceJet’s Ebitdar also jumped sharply by 88% to 684 crores.

Going ahead, yields will remain a key monitorable for investors. Here, from a near-term perspective, the scenario doesn’t look hunky-dory.

“The yields have started to normalise in Q2FY20 as the impact of Jet Airways’ grounding has waned off," Centrum Broking Ltd said in a report on 20 August. “While Q2FY20 is anyways a seasonally weak period, there is additional softening of yields due to lower fares in 0-15 day ticket booking window," it added.

Severe disruption due to floods has made Q2FY20 even worse, point out Edelweiss analysts, adding, “We expect nominal yield growth at best, with potential for significant pick up during Q3FY20."

As such, the muted yield environment may well cap sentiment for airline stocks in the near future.

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Indian shares fell on Thursday as investors fretted over the chances of a fiscal stimulus and anxiously awaited the U.S. Federal Reserve chairman's speech later this week for clues on future rate cuts

Real estate stocks were among the top losers, with the Nifty real estate index shedding 7.2%, its biggest intra-day dip since late 2016, as DLF Ltd slumped 19.6%.

A report in the Hindu BusinessLine newspaper said https://www.thehindubusinessline.com/companies/supreme-court-issues-notice-to-dlf-sebi-on-non-disclosure-of-key-information-in-qip/article29204691.ece the Supreme Court had issued a notice to the real estate developer for allegedly suppressing material information from shareholders.

The broader NSE Nifty was down 0.42% at 10,873.00 as of 0445 GMT, while the benchmark BSE Sensex was lower by 0.34% at 36,933.80.

The minutes of the Fed's July meeting showed policymakers deeply divided over rate cuts, while hopes for a fiscal stimulus dimmed as President Donald Trump said he was not looking at cutting payroll taxes.

Much now depends on how dovish Fed Chair Jerome Powell chooses to be in his speech on Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.35%. [MKTS/GLOB]

Meanwhile, markets awaited news on an economic stimulus from the Indian government amid a bruising slowdown that has hammered industries including the crucial automotive sector, leading to production cuts and job losses.

"The disappointment factor is increasing day by day because we've not heard anything from the government," said Rusmik Oza, head of fundamental research at Kotak Securities in Mumbai. "Earnings have also been a big disappointment."

June-quarter net profits for India Inc grew at a moderate pace of 6.6% year-over-year, compared with 24.6% a year earlier, CARE Ratings said on Wednesday, based on an analysis of 2,976 companies.

The Nifty metals index fell 2.13%, with miner Vedanta Ltd declining 3.9%.

The Nifty FMCG index, which tracks manufacturers of fast-moving consumer goods, was the lone gainer with a rise of 1.17%.

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Iterating that renewable energy sources were unlikely to overtake coal as the major source of power generation in India any time soon, state-owned Coal India Ltd on Wednesday said the energy migration would happen "differently" in the country as compared to many other countries switching to renewables

"The question is can renewables take over coal completely in our country? Not in the near future at least. It would not be an exaggeration to state that Coal India Ltd (CIL) is synonymous with India's energy scenario," CIL chairman Anil Kumar Jha said in his speech to shareholders at the company's 45th annual general meeting here.

"The energy migration scenario in India would be different compared to many other countries which have been switching to renewable sources," he said.

CIL produces around 83 per cent of the country's back fuel.

Jha said for the first time in its history, the miner's production and off-take of coal had surpassed the 600 million tonnes mark.

Its coal production clocked 606.89 million tonnes while the miner supplied 608.14 million tonnes of the fuel in 2018-19.

While the production rose 6.97 per cent, the off-take went up by 4.8 per cent as against the figures for the previous 2017-18 fiscal.

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Prakash Gaba of prakashgaba.com recommends buying Asian Paints with the target at Rs 1620 and stop loss at Rs 1580 and Nestle India with a target at Rs 13000 and stop loss at Rs 12250

The BSE Sensex plunged 267.64 points to 37,060.37 while the Nifty 50 lost 98.30 points to close below 11,000 levels, at 10,918.70, forming a bearish candle on the daily charts.

Experts feel the bearish bias may continue in coming session also if the index breaks its August lows.

Among sectors, Nifty Metal fell most with loss of nearly 3 percent followed by Bank and FMCG which declined nearly a percent each. The correction in broader markets was quite high compared to benchmarks as the Nifty Midcap index fell 1.6 percent and Smallcap index lost 1.9 percent.

According to the pivot charts, key support level is placed at 10,872.2, followed by 10,825.7. If the index starts moving upward, key resistance levels to watch out for are 10,999.7 and 11,080.7.

Nifty Bank closed at 27,719.05, down 263.40 points on August 21. The important pivot level, which will act as crucial support for the index, is placed at 27,557.24, followed by 27,395.37. On the upside, key resistance levels are placed at 27,989.94 and 28,260.77.

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Dr Lal PathLabs Ltd, Thyrocare Technologies Ltd and Metropolis Healthcare Ltd have had a busy June quarter, clocking double-digit revenue growth

All three expect to keep up the growth momentum, benefiting from easing competition and network expansions.

Price hikes and an increase in volumes improved revenue growth at Thyrocare. Lal PathLabs’ growth accelerated, thanks largely to its capacity expansion and market reach.

Competition for the big three has contracted considerably. Lal PathLabs says competition has stabilized in the last two years. This should be able to sustain growth.

In fact, Thyrocare expects to keep up the growth momentum for the rest of the fiscal year. “Management spoke of a sharper focus on its b2b (business to business) business, with greater incentives and more revenue per franchisee as it focuses on eliminating layers of middlemen and channelising the benefits of rationalised prices to end-consumers," Prabhudas Lilladher Pvt. Ltd. said in a note.

Formalization and economies of scale are helping companies in the regulated (or formal) sector, says Lal PathLabs. “Management highlighted that the diagnostic sector will continue to grow in double digits due to the need for deeper penetration and the shift from the non-regulated to the formal sector," Edelweiss Securities Ltd said in a note on Lal PathLabs. The company’s push to expand beyond the National Capital Region is expected to be the key growth driver.

Similarly, Metropolis is expanding its service network. “We expect Metropolis’ consolidated revenues to grow at 17% CAGR over FY2019-22E driven primarily by 20% growth in individual patient (business to consumer or b2c) revenues," Kotak Institutional Equities said in a note

The commentary should please investors in an otherwise gloomy corporate earnings season, while the stocks mirror the optimism. Lal PathLabs and Thyrocare are trading at about 28 and 21 times FY21 earnings estimates, respectively, while Metropolis’ price-earnings ratio is at 30 times FY21 earnings estimates.

Thyrocare’s great dependence on the B2B segment, which restricts consumer interface, is seen to be a severe handicap. However, with competition easing and the company tightening its grip on the B2B segment, some see scope for a reduction in the valuation discount.

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Technology major Siemens will upgrade Hindustan Zinc's power assets and manufacture six 80 MW steam turbines for the mining major

"Siemens will modernise and commission 80 MW steam turbines to Hindustan Zinc. The modernisation of the power assets of Hindustan Zinc includes state-of-the-art design steam turbine components and digital technologies. Siemens will also provide on-site project services on a turnkey basis," Siemens said in a statement here on Tuesday.

The turbines would be manufactured at Vadodara factory, it said.

Commenting on the development, V. Jayaraman, Head of Power Plants at Hindustan Zinc, said: "We are aiming at higher efficiencies of power generation from steam turbines along with higher generation. Further, the modular project execution will ensure lower outage. Operations will be more economical and using latest technologies help reduce carbon footprint, which is in sync with our group's philosophy."

Gerd Deusser, Head, Gas and Power, Siemens, said: "The upgraded 80 MW steam turbines is the best-in-industry and ensures high flexibility, reduces emissions and maintains high reliability. By leveraging our experiences and technological leadership, we will continue to provide highly efficient steam turbines to customers."

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Coffee Day Enterprises (CDE) owns Café Coffee Day, India's largest cafe chain that operates 1,750 outlets across the country

Shares of Coffee Day Enterprises gained on August 19, the first time in 17 trading sessions, after a media report said that the promoters were likely to resume talks with Coca-Cola for a stake sale in Cafe Coffee Day chain to cut the debt.

In fact, the stock traded high for the first time after the shock death of founder VG Siddhartha, whose body was found on the banks of the Netravati river in Karnataka on July 31, two days after the 60-year-old businessman had gone missing.

The stock was locked in 5 percent upper circuit at Rs 66.05 on the BSE. It was in lower circuit for previous consecutive 12 trading sessions after July 29 and lost 68.5 percent in the previous 16 sessions.

"The promoters of the Coffee Day Group plan to restart talks with Coca-Cola for selling a chunk of their stake in the Café Coffee Day (CCD) chain in a bid to cut the group's debt further," The Economic Times reported on August 19.

Siddhartha had begun talks with the beverage giant, seeking a valuation of Rs 8,000-10,000 crore for the company in June but was reluctant to sell a majority stake, the report said.

Coffee Day Enterprises (CDE) owns Café Coffee Day, India's largest cafe chain that operates 1,750 outlets across the country.

The deal will help Coca-Cola get a foothold in the cafe space as it tries to expand beyond its core carbonated drinks portfolio.

The move will help Coffee Day Group reduce debt obligations significantly. The company's debt as on July 31 was Rs 4,970 crore, with the debt incurred by its logistics arm, Sical, accounting for about Rs 1,488 crore.

The group recently sold Global Village Tech Park, under it is real estate arm Tanglin, in Bengaluru to Blackstone Group for about Rs 2,600-3,000 crore.

The total debt position of Coffee Day Group will reduce by Rs 2,400 crore after the payment for the deal is received.

The debt position of the Coffee Day Group (excluding Sical and Magnasoft) post repayment of debt out of proceeds from the sale of Global Village will be Rs 1,000 crore in the next 45 days.

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Indian shares rose on Friday after Reuters reported that the country may exempt the tax surcharge on foreign portfolio investors (FPIs), bringing cheer to investors

The broader NSE Nifty was up 0.70% at 11,109.05 as of 0423 GMT, while the benchmark BSE Sensex rose 0.65% at 37,569.36.

India may exempt FPIs from the controversial tax on high incomes as Finance Minister Nirmala Sitharaman faces pressure to roll back the measures introduced during the last month, sources told Reuters.

The government estimates a total revenue loss of 4 billion rupees ($56.77 million) if it withdraws the higher taxes on FPIs, amid news of falling sales and job cuts among automakers and other manufacturers.

"The bounceback is happening because the finance minister has assured the industry of corrective actions," said Deven Choksey, a promoter at KR Choksey Investment Managers.

"Obviously, this will slow down selling by foreign investors because they are the ones who have been relentlessly selling in the markets."

Financials and real estate boosted indexes the most. The Nifty financial services index was up about 1%, while the real estate index rose 1.1%.

The banking index was up 0.8% and the auto index rose 0.3%.

Among shares, Indiabulls Housing Finance was the top gainer on the NSE index, rising 4.2%.

Hexaware Technologies rose as much as 8.6%, its biggest intraday percentage gain since June 21, after the company's quarterly profit beat estimates.

Analysts at Macquarie said Hexaware's strong performance during the quarter was mainly led by strong execution and margin recovery and added that the company was poised to deliver an industry-leading organic growth rate.

Tata Motors was the biggest loser among the NSE stocks, falling 1.37% after Mint reported that the company was halting production for three days at its production plants in Pune and Jamshedpur.

The company's luxury car unit Jaguar Land Rover is also being shut temporarily, the report said.

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Adopting a resolution on the corporate governance issues arisen between the co-promoters of budget carrier IndiGo will convey a false impression, IndiGo Co-founder and Director Rakesh Gangwal said on Tuesday

In a letter addressed to the airline Board, Gangwal said that he will not vote for a special resolution for "Alteration in Articles of Association of the Company" unless the Rahul Bhatia-controlled InterGlobe Enterprises (IGE) is prevented from getting more powers.

Gangwal said: "I recognize the timing constraints and the need to call an AGM. However, many emails were exchanged after our Board meeting of July 20, 2019, and based on serious unresolved issues, I again reiterate that I am no longer in a position to vote affirmatively on the special resolution for 'Alteration in Articles of Association of the Company'...

"...unless, as discussed in numerous emails, a complementary Board resolution is passed to prevent IGE Group from getting even more rights and abilities than they have today and the new RPT (related party transactions) policy is adopted, language for which has already been agreed."

Gangwal also said that the AGM notice, along with the "unnamed sources"-planted "press reports that the Chairman has brokered peace and matters have been resolved, leaves a misleading and false impression that issues on RPTs and changes to the Articles have the support of both promoter groups".

Besides, he said that the full Board, including the Chairman, agreed on a package deal for RPTs and on the size of the Board, both of which would be finalised at the same time.

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At close, the Sensex was up 118.69 points at 37,137.01, while Nifty was up 17.40 points at 10,997.40.

Benchmark indices registered a strong recovery from the intraday lows and ended on a positive note on August 2 with Nifty finished a tad below 11,000 marks.

At close, the Sensex was up 118.69 points at 37,137.01, while Nifty was up 17.40 points at 10,997.40. About 1104 shares have advanced, 1339 shares declined, and 132 shares are unchanged. 

Indiabulls Housing, Tata Steel, SBI, Coal India and Wipro were among major losers on the Nifty, while gainers include Bharti Airtel, Asian Paints, Eicher Motors, Bajaj Auto and Maruti Suzuki.

Auto, infra, IT witnessed some buying, while PSU banks, metal and energy ended on a negative note. The midcap index ended flat, while the smallcap index was down 0.5 percent.

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Vedanta Resources said on Wednesday it had notified its Zambian joint venture partner ZCCM-IH that it had launched arbitration proceedings related to an attempt by the Zambian government to liquidate Vedanta's majority-owned Konkola Copper Mines (KCM)

Mumbai-listed Vedanta has been locked in a dispute with the Zambian government since May when Lusaka appointed a liquidator to run KCM, which is 20% owned by ZCCM, Zambia's state mining company, and 80% owned by Vedanta. Zambia accused KCM of breaching the terms of its licence.

Vedanta denies that KCM has broken the terms of its licence and says it will defend its assets in the southern African country.

Vedanta said the notice demands that arbitration should be in accordance with United Nations Commission on International Trade Law (UNCITRAL) arbitration rules.

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HSBC increased its price target for SpiceJet to Rs 115 from Rs 79.50 earlier.

SpiceJet shares fell nearly 3 per cent intraday on June 7 after global brokerage firm HSBC downgraded SpiceJet to reduce.

The stock was quoting Rs 144.65, down Rs 1.60, or 1.09 per cent on the BSE, at 1125 hours. However, it rallied 71 per cent in the last three months after Jet Airways suspended its operations and crude oil prices fell.

The brokerage maintained hold call on IndiGo operator InterGlobe Aviation which was trading at Rs 1,668.15, down Rs 2.70, or 0.16 percent.

HSBC said stocks are now trading at near all-time high valuation multiples. "Market is far too optimistic and ignoring risks and challenges."

However, the brokerage increased its price target for SpiceJet to Rs 115 from Rs 79.50 earlier and for InterGlobe Aviation to Rs 1,580 from Rs 1,100 apiece after an increase in earnings estimates.

"Consensus earnings forecasts for IndiGo increased by 136 percent and for SpiceJet by 56 percent," HSBC said, adding airfares have risen 12-15 percent over the past 4-5 months.

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According to Angel Commodities,On Monday, spot gold prices declined marginally by 0.04 percent to close at $1 282.2.

On Monday, spot gold prices declined marginally by 0.04 percent to close at $1 282.2. Gold prices head towards first yea rly fall in three years, losing its gains to a stronger dollar buoyed by trade tensions and rising interest rates by the U.S. Federal Reserve. Spot prices have gained about 5 percent in December, the most since January 2017 supported by falling equities in the global markets which weighed on the economic outlook. On the MCX, gold prices rose 0.1 percent to close at Rs.31422.0 per 10 gms.

Outlook

International markets trading higher by 0.27 percent at $1284.65 per ounce. We expect gold prices to trade lower today as global equities rise over gains in US stock futures which shows improving risk appetite amongst investors. On the MCX, gold prices are expected to trade flat.

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