Nifty set to open on a flat note; ONGC, Dr Reddy's in focus

Indian equity benchmarks are likely to open on a flat note tracking the Nifty futures on Gift Nifty amid lacklustre trend seen in crucial global markets. At 07:05 am, Gift Nifty was up 0.3per cent at 24,915 

In Asia, trading was mixed. Hong Kong's Hang Seng index led regional bourses higher, adding 1.14 per cent, powered by interest buying in technology and consumer discretionary stocks. The SET index in Thailand added 1.03 per cent on the boost of sentiment in banking and energy sectors. The Japanese Nikkei 225 fell 1 per cent as investors continue to respond to weaker-than-expected economic data as well as a stronger yen having an impact on export-driven companies. KOSPI in South Korea reduced by 0.08 per cent as losses from heavyweight technology stocks offset gains in other sectors.

US stock markets closed higher on Friday ahead of the long weekend, boosted by dovish comments from Federal Reserve Chair Jerome Powell. In perhaps his most highly anticipated speech at the Jackson Hole Economic Symposium, Powell pledged another interest rate cut as early as September, citing decreased inflation risks and a still-strong labor market. "The time has come" to lower the Fed funds target rate, he said, since "the upside risks on inflation have diminished." These words were received by markets as powerful evidence that the Fed will cut its rates at the next policy meeting, which would be the first such cut in over four years.

US indices cheered Powell's speech, wherein the Dow Jones Industrial Average advanced 462.3 points, or by 1.14 per cent, to close at 41,175.08. The S&P 500 jumped 63.97 points, or 1.15 per cent, to 5,634.61, with the Nasdaq Composite leaping 258.44 points, or by.

Back home, foreign institutional investors and domestic institutional investors turned active participants in the market on Friday. While FII bought shares worth Rs 1,944 crore, DII purchased stocks worth Rs 2,896 crore, thereby showing strong support from domestic investors despite uncertainties in global environment.

Stocks to Watch

ONGC: ONGC, the Indian energy major, has spudded a new well in the Krishna Godavari (KG) basin, situated in the Bay of Bengal. This is the next very major step towards enhancement in production with a view to meet the aim and aspiration of energy self-sufficiency to the nation in sphere of crude oil and natural gas.

The new well is the fifth in the KG-DWN-98/2 (KG-D5) block, where ONGC had earlier started oil production in January this year. The crude extracted from the well goes into producing petrol, diesel, and many other products. However, ONGC has been tight-lipped on the current rate of production from the new well. This will further boost ONGC's position in the Indian energy sector and add to the country's total oil output.

Dr. Reddy's Laboratories: The country's leading pharmaceutical company, finds itself under the scanner after the US Food and Drug Administration issued Form 483 with three observations for its formulations manufacturing facility in Srikakulam, Andhra Pradesh. The inspection was conducted between August 19 and August 23, 2024, and some flaws related to certain aspects from within the facility were noted.

However, details of the observations are not public at the moment, although such notices do typically question the company on probable concerns regarding quality control, sound manufacturing practices, or binders and record-keeping. Dr. Reddy's has, however, assured stakeholders that the company would respond to the observations brought up by the FDA immediately. The company's stock may see some volatility today as investors react to the news.

Transport Corporation of India: The Board of Directors of Transport Corporation of India (TCI) has passed a resolution to buy back 13,33,333 equity shares of the company (1.72 per cent) at a price of Rs 1,200 per share, for consideration not exceeding Rs 159 crore in aggregate. The company has fixed September 4 as the record date for determining the entitlement of the names of shareholders who would be eligible for the buyback. This is being done primarily to enhance shareholder value and, at the same time, to achieve an optimizing capital structure of the company.

Alembic Pharmaceuticals: The company has received approval from the US FDA for the company's Abbreviated New Drug Application for Betamethasone Valerate foam, 0.12 per cent. The foam is indicated in the treatment of scalp skin conditions and is therapeutically equivalent to Luxiq foam, 0.12 per cent, emanating from Norvium Bioscience LLC. The approval enhances Alembic's product portfolio in the United States, one of the largest pharmaceutical markets globally.

Ashoka Buildcon: The company has emerged as the lowest bidder for the valued Rs 478-crore project of the Mumbai Metropolitan Region Development Authority. The project includes the design and construction of a 12.84-km elevated road from Kalyan-Murbad Road to Badlapur Road to Pune Link Road. The structure will be constructed parallel to the Waldhuni River, connecting Kalyan to Kharpada, with six lanes. This also includes a slip road and a crossing over the Karjat-Kasara railway line, which is considered an improvement to the region's connectivity features. Contributions from such a project would, therefore, enhance Ashoka Buildcon's order book.

Zydus Lifesciences: The company will form a 50:50 joint venture with Perfect Day Inc., a Temasek portfolio company, to develop Sterling Biotech. Post the transaction, Sterling Biotech will become a 50:50 joint venture for both the parties and have equal board representation. Zydus will invest in the set-up of a manufacturing plant for animal-free fermented protein targeting global markets, in line with the strategic expansion drive for a commensurate stake in this fast-growing alternative protein space.