*Automobiles*
*Demand uptick, recovery on track*
*Sector: Automobile*
*View: Positive*
The automotive monthly sales are expected to continue recovery in July 2021, as the lockdown restrictions have now been lifted in most states. We expect passenger vehicles (PV) sales to recover strongly followed by tractors, two-wheelers commercial vehicles (CV), as compared to pre-COVID level volumes. The new COVID cases are on a steady decline. However, the new variants and the fear of third wave of COVID has led the government to monitor the situation closely. As per the channel checks, the dealers are witnessing increased queries and orders in the passenger vehicle (PV) and two-wheelers segments.
*Sector view*
*Retain Positive view on automobile in the medium term:* We continue to remain positive on the sector, The passenger vehicle segment, both for two-wheelers and four-wheelers, is expected to remain strong amid COVID-19, as a preference for personal transport. Rural demand is expected to recover strongly in southern and western India, given the timely arrival of the monsoon season, higher reservoir levels, and higher kharif sowing last year. Tractor sales are likely to remain healthy ahead of the summer crop.
*Key risks*
The fear arising of new variants and the third wave of COVID-19 remain a potential concern. Any significant delay in recovery from COVID-19 infection or the vaccination rollout continue to be key risks going forward.
*Preferred picks:* In the OEM space, we prefer rural-centric companies with a strong balance sheet. In the two-wheeler space, we prefer Hero MotoCorp because of positive sentiments in rural and semi-urban areas. In the PV space, we like Maruti Suzuki and expect it to maintain its dominant market share and robust export growth. In the tractor segment, we like M&M, given its leadership in the tractor segment and its continued strong performance in other segments such as LCV and UVs. In the auto-ancillary space, we like Sundram Fasteners (beneficiary of strong growth traction in CV, PV, 2Ws, and tractor and its strategy to de-risk business from cyclicality), Suprajit Engineering (on account of increased share of business with existing clients and new client additions), Ramkrishna Forgings (beneficiary of CV upcycle in India, North America, and Europe), Gabriel India (due to its leadership position and brand recall in the suspension components segment and focus on the e-mobility space), Greaves Cotton (beneficiary of e-2W adoption and focus on non-automotive segment), and Apollo Tyres (strong brand recall in India and Europe, and focus on profitable growth).
*Demand uptick, recovery on track*
*Sector: Automobile*
*View: Positive*
The automotive monthly sales are expected to continue recovery in July 2021, as the lockdown restrictions have now been lifted in most states. We expect passenger vehicles (PV) sales to recover strongly followed by tractors, two-wheelers commercial vehicles (CV), as compared to pre-COVID level volumes. The new COVID cases are on a steady decline. However, the new variants and the fear of third wave of COVID has led the government to monitor the situation closely. As per the channel checks, the dealers are witnessing increased queries and orders in the passenger vehicle (PV) and two-wheelers segments.
*Sector view*
*Retain Positive view on automobile in the medium term:* We continue to remain positive on the sector, The passenger vehicle segment, both for two-wheelers and four-wheelers, is expected to remain strong amid COVID-19, as a preference for personal transport. Rural demand is expected to recover strongly in southern and western India, given the timely arrival of the monsoon season, higher reservoir levels, and higher kharif sowing last year. Tractor sales are likely to remain healthy ahead of the summer crop.
*Key risks*
The fear arising of new variants and the third wave of COVID-19 remain a potential concern. Any significant delay in recovery from COVID-19 infection or the vaccination rollout continue to be key risks going forward.
*Preferred picks:* In the OEM space, we prefer rural-centric companies with a strong balance sheet. In the two-wheeler space, we prefer Hero MotoCorp because of positive sentiments in rural and semi-urban areas. In the PV space, we like Maruti Suzuki and expect it to maintain its dominant market share and robust export growth. In the tractor segment, we like M&M, given its leadership in the tractor segment and its continued strong performance in other segments such as LCV and UVs. In the auto-ancillary space, we like Sundram Fasteners (beneficiary of strong growth traction in CV, PV, 2Ws, and tractor and its strategy to de-risk business from cyclicality), Suprajit Engineering (on account of increased share of business with existing clients and new client additions), Ramkrishna Forgings (beneficiary of CV upcycle in India, North America, and Europe), Gabriel India (due to its leadership position and brand recall in the suspension components segment and focus on the e-mobility space), Greaves Cotton (beneficiary of e-2W adoption and focus on non-automotive segment), and Apollo Tyres (strong brand recall in India and Europe, and focus on profitable growth).
Union Cabinet paves the way for privatisation of govt-owned insurers
https://mybs.in/2Zg2f7U
－shared via Business Standard iPhone App
https://mybs.in/2Zg2f7U
－shared via Business Standard iPhone App
Business-Standard
Union Cabinet paves the way for privatisation of govt-owned insurers
The finance ministry will move amendments to the insurance Act in the ongoing Parliament session
China's crackdown on ed tech cos could be India’s gain: Mark Matthews
https://economictimes.indiatimes.com/markets/expert-view/chinas-crackdown-on-ed-tech-cos-could-be-indias-gain-mark-matthews/articleshow/84819688.cms
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https://economictimes.indiatimes.com/markets/expert-view/chinas-crackdown-on-ed-tech-cos-could-be-indias-gain-mark-matthews/articleshow/84819688.cms
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The Economic Times
China's crackdown on ed tech cos could be India’s gain: Mark Matthews
“People who are selling China will go into something safe like cash and will look to redeploy it in countries outside of the United States that have new economy stories. India with healthy pipeline of internet IPOs falls into that category.”
GM jsk stock in news sonatasoft,jswenergy,jmfin,century tex,grinfra,anupeng,ushamartin,apcotex,Deepak nit, jubiliant ingreva,SRF,Raymond,tvsmot,sanfoi,hudco,taropharma. Negative stock nestle,equitas hold. Nifty range 15600-15880.
*Morning Action @ 7am – Thursday, July 29th 2021.*
*7 AM GLOBAL UPDATE:*
*The Federal Reserve and Chairman Jerome Powell are seen bringing in a little cheer to SGX Nifty and Asian stock markets,* as they keep benchmark interest rates steady but also indicating that accommodative policy would stick around for some time. In a release, Powell said that the U.S. labor picture would need to significantly improve before the central bank would pare back its monthly asset purchases.
However, overnight the Dow and S&P 500 ended lower despite the Fed’s upbeat view of the U.S economy. The yield on the benchmark 10-year Treasury rose Wednesday to 1.229%.
# SGX Nifty (+33, 15741)
# Dow (-127, 34930)
# Nasdaq (+102, 14763)
# Brazil Bovespa (+1673, 126286)
# Nikkei (+150, 27732)
# Hang Seng (+747, 26221)
*MARKET TRENDS:*
# Global: Neutral.
# FII: Negative (-2274.77 Cr)
# DII: Positive (+921.45 Cr)
# F&O: 15557-15857 zone
# Market Breadth: Weak
# Sentiment: Precarious
# Technicals: Negative
# Outlook: Volatile.
*All ABOUT NIFTY & BANK NIFTY:*
NIFTY (CMP 15709):
# SUPPORT: 15513/15449
# RESISTANCE: 15857/15963
# RANGE: 15577-15877
# BIAS: Buy on dips.
BANK NIFTY (CMP 34533):
# SUPPORT: 33849/32549
# RESISTANCE: 35267/36101
# RANGE: 34001-35001
# BIAS: Negative.
*THEME OF THE DAY:*
Well, the current state of markets can be defined as driving with one foot on the brake and the other pressing on the accelerator pedal. The reopening of economies and optimism about a global recovery are themes working in favor of bulls while persistent selling from the FIIs camp continues to dampen investors’ sentiments.
That brings us to our *call of the day* which says traders are likely to go through fire and water. That said, we suspect —— it will be totally worth it.
Volatility to be the hallmark as July F&O contracts expire today. Also, there are no shortages of potential catalysts like the worsening relations between the U.S. and China, the U.S GDP on deck while earnings seasons at home picking up the pace.
*Disclaimer:* Our subscribers/clients may have positions in the stocks recommended in this note. Please note that the actual subscribers may receive additional information in real time not available to the viewers of this note.
This does not construe to be an investment advice. Stock market investments are subject to market risks. All information is a point of view, and is for educational and informational use only. The author accepts no liability for any interpretation of articles or comments on this blog being used for actual investments.
*7 AM GLOBAL UPDATE:*
*The Federal Reserve and Chairman Jerome Powell are seen bringing in a little cheer to SGX Nifty and Asian stock markets,* as they keep benchmark interest rates steady but also indicating that accommodative policy would stick around for some time. In a release, Powell said that the U.S. labor picture would need to significantly improve before the central bank would pare back its monthly asset purchases.
However, overnight the Dow and S&P 500 ended lower despite the Fed’s upbeat view of the U.S economy. The yield on the benchmark 10-year Treasury rose Wednesday to 1.229%.
# SGX Nifty (+33, 15741)
# Dow (-127, 34930)
# Nasdaq (+102, 14763)
# Brazil Bovespa (+1673, 126286)
# Nikkei (+150, 27732)
# Hang Seng (+747, 26221)
*MARKET TRENDS:*
# Global: Neutral.
# FII: Negative (-2274.77 Cr)
# DII: Positive (+921.45 Cr)
# F&O: 15557-15857 zone
# Market Breadth: Weak
# Sentiment: Precarious
# Technicals: Negative
# Outlook: Volatile.
*All ABOUT NIFTY & BANK NIFTY:*
NIFTY (CMP 15709):
# SUPPORT: 15513/15449
# RESISTANCE: 15857/15963
# RANGE: 15577-15877
# BIAS: Buy on dips.
BANK NIFTY (CMP 34533):
# SUPPORT: 33849/32549
# RESISTANCE: 35267/36101
# RANGE: 34001-35001
# BIAS: Negative.
*THEME OF THE DAY:*
Well, the current state of markets can be defined as driving with one foot on the brake and the other pressing on the accelerator pedal. The reopening of economies and optimism about a global recovery are themes working in favor of bulls while persistent selling from the FIIs camp continues to dampen investors’ sentiments.
That brings us to our *call of the day* which says traders are likely to go through fire and water. That said, we suspect —— it will be totally worth it.
Volatility to be the hallmark as July F&O contracts expire today. Also, there are no shortages of potential catalysts like the worsening relations between the U.S. and China, the U.S GDP on deck while earnings seasons at home picking up the pace.
*Disclaimer:* Our subscribers/clients may have positions in the stocks recommended in this note. Please note that the actual subscribers may receive additional information in real time not available to the viewers of this note.
This does not construe to be an investment advice. Stock market investments are subject to market risks. All information is a point of view, and is for educational and informational use only. The author accepts no liability for any interpretation of articles or comments on this blog being used for actual investments.
*Derivative Calculus @ 8am - Thursday, July 29th 2021*
# Nifty July Futures ended Wednesday’s session at a discount of -02 vs discount of -08.
# The 29th July expiry Put-Call Open Interest Ratio was at 0.74 for Nifty whereas it was 0.64 for Bank Nifty.
# The 29th July expiry Put-Call Volume Ratio was at 0.86 for the Nifty and 1.02 for Bank Nifty.
# For Nifty, Maximum Call Open Interest (OI) stands at 15800 Strike Price, followed by 16000 Strike Price for 29th July Series. Short buildup was seen at strike prices 15700-15900.
# Maximum Put Open Interest (OI) was seen at strike price 15500 followed by 15600 strike prices for 29th July series. Short covering was seen at strike prices 15800-16000.
# For Bank Nifty, Maximum Call Open Interest (OI) stands at 35000 Strike Price and Maximum Put Open Interest stands at 34000 Strike Price.
# As per Wednesday’s provisional data available on the NSE, FIIs sold shares worth Rs. 2274.77 crores in the Indian Equity Market. DIIs on the other hand bought shares worth Rs. 921.45 crores in the Indian Equity market.
# *Long Buildup:* TATASTEEL, JSWSTEEL, DIVISLABS, SRF.
# *Short Buildup:* SBIN, L&TFH, M&MFIN, RELIANCE, HDFCBANK.
# *Short Covering:* BHARTIARTL, GRANULES, BIOCON, AUROPHARMA.
# *Long Unwinding:* CANBK, DLF, GAIL, IBULHSGFIN.
# *Stocks banned in F&O segment:* IDEA, SUNTV.
# New in Ban: SUNTV.
# Out of Ban: SAIL.
# Nifty July Futures ended Wednesday’s session at a discount of -02 vs discount of -08.
# The 29th July expiry Put-Call Open Interest Ratio was at 0.74 for Nifty whereas it was 0.64 for Bank Nifty.
# The 29th July expiry Put-Call Volume Ratio was at 0.86 for the Nifty and 1.02 for Bank Nifty.
# For Nifty, Maximum Call Open Interest (OI) stands at 15800 Strike Price, followed by 16000 Strike Price for 29th July Series. Short buildup was seen at strike prices 15700-15900.
# Maximum Put Open Interest (OI) was seen at strike price 15500 followed by 15600 strike prices for 29th July series. Short covering was seen at strike prices 15800-16000.
# For Bank Nifty, Maximum Call Open Interest (OI) stands at 35000 Strike Price and Maximum Put Open Interest stands at 34000 Strike Price.
# As per Wednesday’s provisional data available on the NSE, FIIs sold shares worth Rs. 2274.77 crores in the Indian Equity Market. DIIs on the other hand bought shares worth Rs. 921.45 crores in the Indian Equity market.
# *Long Buildup:* TATASTEEL, JSWSTEEL, DIVISLABS, SRF.
# *Short Buildup:* SBIN, L&TFH, M&MFIN, RELIANCE, HDFCBANK.
# *Short Covering:* BHARTIARTL, GRANULES, BIOCON, AUROPHARMA.
# *Long Unwinding:* CANBK, DLF, GAIL, IBULHSGFIN.
# *Stocks banned in F&O segment:* IDEA, SUNTV.
# New in Ban: SUNTV.
# Out of Ban: SAIL.