By Lokesh Sethia, SEBI Registered Research Analyst
After FM cut corporate tax rates, Indian equity market saw the biggest rally on a single day in 10-years. The headline Nifty surged 1.8% during the week on the back of strong buying in the equity market. Nifty recovered from intra-week low of 10670 to move towards 11400. Bank Nifty also witnessed smart rally registering a weekly gain of 3.1%. Staggering rally witnessed in the Nifty 50 stocks on Friday was led by auto stocks.
The effective corporate tax rate will be lowered to 25.17% from 30%. The government also scrapped the minimum alternative tax for domestic companies. New domestic manufacturing companies incorporated after October 1, 2019 can pay income tax at a rate of 15% without any incentives. The effective tax rate for new manufacturing companies will be 17.01% inclusive of all surcharge and cess.
India's annual wholesale price inflation in August was at 1.08%, remaining unchanged from the previous month. Last month, the annual wholesale price inflation was largely in line with a forecast of 1.04% by economists. Wholesale food prices in August rose 5.75% yoy vs. a 4.54% rise a month earlier.
Meanwhile, US and Chinese deputy trade negotiators resumed face-to-face talks for the first time in nearly two months on Thursday, as the world’s two largest economies try to bridge deep policy differences and find a way out of their protracted trade war.
THE WEEK AHEAD
The Nifty Index may find supports around 11000-11100 on the downside. The nifty Index may find resistance around 11400---11500 on the upside. Now Nifty Index closed above its all moving average. After three month first time RSI showing buying signal in daily chart. Nifty Index has closed near 11275. If it remains above 11250 then immediately on the upside it will find resistance at 11400. This week Nifty Index has made a low of 11670 and high 11381.
Broader trading range for the week: 11100 – 11500
Immediate probable trading range for the week: 11200 – 11400
- Morgan Credits, part of the promoter group of Yes Bank, sold 2.3% shareholding in the bank.
- DHFL has got proposal from a developer to act as development managers in certain projects including projects taken under slum rehabilitation scheme.
- PNB to consider raising up to `3,000cr via Tier-I bonds on September 26.
- Bharat Forge has acquired a 50% stake in German company Refu Electronik GmbH for 11.35 mn euro.
- Lenders invoked 2.85% stake in Reliance Power from May 2-September 9.
- Morepen Laboratories approved the issue and allotment up to 3.7cr warrants for an aggregate amount of up to `74cr, convertible into 3.7cr equity shares to promoter group entity(ies) on a preferential basis.
- Adani Transmission said it has acquired the entire stake in Bikaner-Khetri Transmission Ltd (BKTL).
- Godrej Consumer Products has raised stakes from 90% to 95% in Godrej West Africa Holdings (GWAHL) and Mauritius & Darling Trading Company (DTCL). The cost for acquisition of the additional stake in GWAHL and DTCL is $13.80 mn and $7 mn, respectively.
- Brickwork Ratings has downgraded Reliance Home Finance’s rating to D (Default) for company’s debt program, primarily due to non-payment of commercial paper.
- India Energy Exchange Board has approved incorporation of an arm to undertake business of developing a gas exchange with an initial investment up to `10cr.
- Power Finance Corporation transferred a Rajasthan transmission unit to the highest bidder Adani Transmission.
- JSW Steel to meet on or after Sept. 24 to open an issue of securities.
- SBI MF increased stake from 4.83 percent to 6.29 percent in NIIT.
- ICRA has revised its rating on Oriental Bank of Commerce bonds from stable to rating watch with positive implications in view of the proposed amalgamation of OBC and UBI into PNB.
- Jindal Stainless allotted 80 lakh shares to promoter group entity at `35.65 aggregating to total of `28.6cr. Promoter holding in the company will increase to 67.8% vs. 67.3%.
- Himachal Futuristic Communications clarified that no pledge has been created on any additional share.
- Future Retail pledged additional 0.4% stake with Edelweiss Finvest and ECL Finance.
- Aditya Birla Sun Life MF acquired additional 2.16% stake in NCC on Sept. 13.
- South Indian Bank revised its MCLR across various tenors with effect from Sept. 20. One-month MCLR at 8.6% and one-year MCLR at 9.25%.
- Porinju Veliyath led Equity Intelligence increased the stake in J Kumar Infraprojects from 4.89% to 5.02%.
- The committee of directors of L&T Financial Services approved the allotment of 1,00,00,000 compulsorily redeemable non-convertible preference shares (CRPS) of the face value of `100 each on a private placement basis to identified investors.
- Mindtree has signed an agreement with Atotech to help manage their SAP landscape.
- TCS and General Motors have launched a new partnership with General Motors for Global Vehicle Engineering.
- SBI's Staff Unions have called for a strike by Bank Employees from Sept. 26-27. Bank’s work may be impacted to some extent because of the strike.
- Kaveri Seed's Board to consider share buyback on Sept. 24.
- Rico Auto Industries has closed a joint venture with Singapore’s Ultra Fairwood to manufacture different variants of e- vehicles due to lack of clear policies of the Government.
- Bayer Cropscience Group has closed Monsanto integration in India. Monsanto products will retain their brand names and become a part of Bayer’s product portfolio. Shareholders of Monsanto India will get two equity shares of Bayer CropScience for every three equity shares held by them.
- Arbitrator has pronounced the order of `24cr to NACL pertaining to company’s insurance claim to a fire accident at its Srikakulam Plant in 2012 against Oriental Insurance.
- Allahabad Bank Board has approved amalgamation of the Bank into Indian Bank.
- Corporation Bank Board has given in- principle approval for amalgamation of the Bank into UBI.
- S&P Rating Agency has revised the Long- Term Issuer Credit Rating of Syndicate Bank to Positive from Stable.
- Quess Corp's EGM for approval of shareholders for amalgamation of 4 wholly owned arms into the company to be held on Oct. 10.
- Pidilite Industries has incorporated an arm to carry in business of manufacturing materials used in the construction industry.
- India Ratings & Research has placed the long term issuer rating of Indian Bank on rating watch evolving (RWE), following the recent announcement by Ministry of Finance regarding the proposed amalgamation of Allahabad Bank into Indian Bank.
- CARE Ratings has placed the ratings assigned to various debt instruments of Indian Bank on credit watch with developing implications, the bank said in a regulatory filing.
- Reliance Home Finance said in a regulatory filing that CARE Ratings (CARE) has downgraded the rating to "D" for the company's long-term debt programme
- market-linked debentures, subordinated debt, non-convertible debentures (NCDs) and upper Tier-11 NCDs.
- India Ratings and Research (Ind-Ra) has downgraded Omax Autos' long-term issuer rating as ’IND BBB+’ from 'IND A—'. The outlook is stable.
- Usha Martin said its non- executive director, Prashant Jhawar, has resigned on September 13.
- The National Company Law Tribunal (NCLT) has on September 13, approved the scheme of amalgamation of Monsanto India with Bayer CropScience.
- SML Isuzu will shut operations at Nawanshahr's chassis division for 6 days.
- PVR received notice from GST Anti- Profiteering Body on August 31.
- HDFC MF bought 2.1% stake in TV Today Network on September 12.
- Canara Bank's Board in-principle approved merger with Syndicate Bank and the government will infuse up to `9,000cr via equity.
- Prabhat Dairy Board approved delisting proposal of the company. The floor price is set at `63.77 per share which is at a discount price of 20% to the closing prices as on Sept. 13.
- Texmaco Rail & Engineering Board sets Rights Issue price at `46.7 per share seeking to raise `200cr
- Cox & Kings Financial Service Board has approved the surrender of NBFC license of the company considering the ongoing challenges and slowdown in NBFC environment.
- Bharat Electronics won orders worth `5,357cr for Akash Missile Systems for Indian Air Force.
- Emami Paper Mills Board of Directors have approved surrender of land in Gujarat allotted by GIDC for Greenfield Expansion Project.
- Cost of acquisition for Alembic’s equity share at 98.84% and the remaining stake will be 1.16% towards preference shares of Shreno.
- Hudco received loan sanctions of `6,793.21cr and loan releases of `5,160.94cr as on Aug. 31.
- Info-Edge increased its stake to 32.85% in ShoeKonnect for `4cr.
- M&M to observe no production days between 8-17 days for automotive and farm equipment sector. It will range between 1-3 days for the second quarter of the current financial year.
- SML Isuzu has decided to shut its chassis manufacturing plant in Punjab from Sept. 16-21. Need based production will continue for Bus Body Division.
- Andhra Bank Board as given in-principle approval for amalgamation of the Bank
- with Corporation Bank and Union Bank of India.
- Bajaj Finance board has approved raising up to `8,500cr via QIP.
- DHFL has defaulted on a total of `256cr worth of interest payment on NCDs.
- Gujarat Alkalies has completed commissioning of 20 MW AC solar power plant installation at Charanka.
- Sunteck Realty acquired the premium project in Mumbai for mixed-use development.
- Balmer Lawrie has deferred decision on bonus share issue.
- SEBI barred CG Power & Industrial Solutions' ex-chairman Gautam Thapar and three other former officials from capital markets for “serious” misstatement of accounts as well as diversion of funds, and ordered forensic audit of the company, according to a PTI report.
- Bihar State Road Transport Corporation has appointed MSTC as selling agent to sell all categories of goods and equipment for a period of three years.
- Magma Fincorp entered into co-origination arrangement with ICICI Bank for asset backed finance business.
- Gold prices remained sideward during the week as a lack of clarity in the US Federal Reserve’s monetary policy outlook kept investors cautious. The Fed lowered interest rates for a second time this year in a 7-3 vote on Wednesday but signaled further cuts are unlikely as the labor market remains strong. The cut was widely expected, but the split vote has raised some concern about predicting the future path of monetary policy.
- Copper prices fell during the week as the market focused on weak demand in top consumer China and a meeting in Washington between Chinese and US officials aimed at resolving a prolonged trade dispute. Meanwhile, Peru expects its copper production to grow 27% in the next three years by 2022, the country’s energy and mines minister said on Thursday. Peru is the world’s No.2 copper producer.
- Oil price is set to give a positive weekly close as weekend drone attack on Saudi’s oil facility led to spike in in oil prices. Oil ended nearly 15% higher on Monday, with Brent logging its biggest jump in over 30 years and a record trading volumes, after an attack on Saudi Arabian crude facilities cut the kingdom’s production in half and intensified concerns of retaliation in the Middle East. However, price retreated to lower levels after Saudi Arabia’s energy minister said the country has managed to restore oil supplies to where they stood before weekend attacks on its facilities shut 5% of global oil output.
- Dollar is heading for a muted close for the week, the greenback nursed losses against most major currencies towards the end of the week, as central banks in Switzerland and the UK refrained from following the Federal Reserve in cutting rates, while risk appetite ebbed on caution about US-China trade talks.
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