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00:00 Welcome, you're watching The Trade Setup with me, Tamanna. Very good morning to all of you and it's
00:05 been an exciting set of events overnight. A lot happening in the global markets, US markets,
00:10 Asian markets, but the big story today seems to be expiry. That's what the focus is going to be on.
00:18 So before I get into the details of what you need to watch out for all day, let me just give you in
00:24 a sense the crisp key takeaways. Expiry is going to be the big one. Global news flow will have a
00:30 lot of focus. Crude is looking scarily, zooming towards the $100 mark above $95. And you have
00:39 in China, the Evergrande founder under house arrest of sorts under police control and those
00:45 stocks suspended on trading. Some interesting IPO action also taking place today and we'll get to
00:51 the stocks to watch. So let's go through all of this one by one. Let me start with the global
00:56 news flow. US markets have been jittery. The Dow was down about 0.2% at 33,550. Futures were up
01:06 marginally. S&P 500 also down. But through the day, through the trade or morning on the Dow,
01:14 we have seen that fear continuing on bond yields, the same old story about whether inflation will
01:19 return, interest rates, will they continue to be higher? And that fear continued. European markets
01:26 also had that kind of a bad day. European markets in fact closed at a six month low. And in Asian
01:33 markets, the big theme seems to be the slow implosion of the Chinese real estate story. And
01:41 we've been seeing that happening over the last many months. In a sense, things have come to a
01:46 peak now with the trading of Evergrande stocks being halted in Hong Kong. Evergrande is one of
01:54 the largest and most sprawling real estate conglomerates in China and its founder was put
02:00 under quote unquote police control, essentially house arrest, because they have now defaulted
02:07 on their payments. So those are some of the big cues. Let me go through other global cues. The
02:11 US dollar index at 106.6. The 10-year yield at 4.61. So that's come off a bit from earlier scarier
02:21 levels. Brent is going to be the big story. Crude is going to be the big story. Brent at 96.5.
02:28 NYMEX at 93.82. Gift Nifty was down 0.28%. And Bitcoin was up about half a percent. A quick
02:39 look at how markets fared. Markets on Wednesday saw a bit of an improvement after quite a few
02:45 choppy sessions. So ahead of expiry, markets seemed anxious, poised, but in the green, both
02:51 the Nifty and the Sensex. FIIs were selling compared to DIIs, but the quantum of selling in
02:59 FIIs had eased off as well. The big story, though, today undoubtedly is going to be about expiry. And
03:07 I've called in Agam to join us for more on that. You have the September series expiry Nifty, Bank
03:14 Nifty. What are the levels looking like, Agam? And what is everyone watching out for? Is it going to
03:18 be a rocky, volatile day? Right. So, Tamana, to set the context, we've seen the indices hit life
03:26 highs in this very month. And since then, we've also seen these indices come off and take a step
03:32 back. We're in a place where there is uncertainty whether we could see further weakness or
03:37 consolidation. It is highly unlikely that we could see strength going further in. At least that's
03:42 what the data is indicating. At the moment, what we're seeing as far as the Nifty is concerned,
03:47 well, towards the rollovers, we really haven't seen too much. It's an average sort of a rollover
03:52 with one day left to expiry. If you look at 61%, not too high. And we're really not seeing too
03:58 much in terms of open interest rolled over either. As far as Bank Nifty futures are concerned,
04:03 the picture is not very different. Again, around 60%, 59% to be precise. Not too much change there
04:09 either. So, there's a little bit of uncertainty. And we're at a range where the markets are
04:14 waiting for one either trigger or some of the relatively larger traders to take a decision on
04:22 the direction that is where we start seeing some amount of action. But for now, consolidation is
04:28 what we're looking at. And that's indicative of the option premiums as well. Take a look at the
04:33 Nifty range based on maximum open interest. A 200-point range a day before expiry is not what
04:39 we usually come to see. We see a relatively larger range of around 300, 400, 500 points. But 200
04:45 points is what the range is indicating today. There may be a lot of volatility within this
04:51 particular range. But I see this volatility because of the premiums possibly being already
04:58 so contracted could largely move around taking cues from the underlying. Moving on to the Bank
05:05 Nifty, the picture is actually only slightly different because the indicator ranges for about
05:10 1,000 points. But again, as far as the Bank Nifty is concerned, 44,500. That's been a crucial pivot
05:17 point over the last four months. And we once again saw the Bank Nifty test that level and
05:24 close above that mark. So should we see the traders defend that particular level, then, well,
05:31 we very well could see a consolidation. But below that level, we could see further weakness as far
05:35 as the Bank Nifty is concerned. Is it going to be a volatile expiry? The option premiums, Tamanna,
05:41 are very, very contracted, which means that there is more of a risk reward play out for those who
05:47 go long in the markets and long options as compared to short options. In that case, yeah, we are likely
05:53 to see a lot of change in option premiums. But we're going to have to wait and watch. On the
05:58 whole, it does look like at the moment it's going to be a quiet expiry. All right. A quiet expiry is
06:04 not necessarily bad news when there's so many other factors going on, especially global factors.
06:10 And we'll have to wait and see how the crude story also plays out. That's also looking
06:16 increasingly a difficult one. But let's focus in on what's interesting, what's on my radar
06:22 this morning as you're going into trade. Interesting story that came up this morning,
06:28 actually, in papers on CIPLA. CIPLA promoters are in advanced talks with two consortiums,
06:33 one led by Torrent Pharma with the participation of prominent family offices, and the other,
06:40 a group of buyout firms led by BP, EA, EQT, and General Atlantic to sell a controlling stake in
06:47 India's fourth largest drug maker for six to seven billion dollars. So CIPLA has two people
06:54 wooing it, two groups wooing it, and that's probably going to be something to watch in the
06:58 pharma space again. Aurobindo had some news coming in. Its unit, AuroVaccine, has tied up with
07:04 Singapore's Helaman Laboratories to manufacture and sell pentavalent vaccine candidate used in
07:11 children's vaccines. It will receive royalties once that vaccine candidate is commercialized.
07:18 KEC International, also in the news, the company has received orders from various GST authorities
07:25 in mid-September, 13th and 16th, with claims of 20.9 crore rupees. Now, this is becoming a
07:31 recurrent theme of GST notices rocking the board for several companies in sectors. We saw that with
07:38 Delta Corp as well. So that's one stock definitely to watch. Vedanta is interesting. Vedanta has been
07:46 in the news a lot. Remember, the stock was down 6% on Wednesday. After that, Moody's downgrade,
07:51 and then there is news now there could be a demerger, that the company could be seeing a split
07:58 in the coming days and could be listing parts of its corporate, sprawling corporate entity
08:05 into different entities. So Vedanta will definitely be one to watch. OMGC as well,
08:11 two sort of news triggers. One is an MOU with NTPC Green Energy for development of renewable
08:17 energy projects, and they've inked a crude oil pact with MRPL as well. Dixon again has been
08:26 sort of the toast of the town, hit a 52-week high. And post-closing yesterday, new news came in that
08:31 they're getting into smartphone manufacturing with Xiaomi. The company unit, Paget Electronics,
08:38 has this pact with Xiaomi for manufacturing smartphones and related products. InfoEdge,
08:45 once again in the news and stock to watch definitely, will be investing $500,000 in Insight
08:52 as a service platform, SkyServe. Mannapuram Finance says the Kerala High Court directed
09:00 the Enforcement Directorate to return and release all original documents of properties frozen within
09:05 three weeks. So positive news there for Mannapuram Finance. I have to also make a quick mention
09:11 of the primary market. The IPO space is completely on fire. A lot of new paper out there. So in the
09:21 IPO watch, Yatra will be listing Valiant Laboratories. IPOs has got a 33% share demand
09:29 on its first day of sale. With the offer closing, JSW Infra was really one of the sort of well-received
09:39 IPOs of recent times, 37.4 times subscription. Updater Services IPO got 2.9 times bid for shares
09:47 on sale and Signature Global surged 17.4% on trade. So an exciting day up ahead. That's it
09:57 for me on the trade setup. Hope you have a great day. And of course, stay with BQ Prime.
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