Author: admin

Nifty may trade in 14,400-15,000 range this week, Bank Nifty below 20, 50, 100 day SMAs; Wipro, Cipla in focus

Posted on by

By Rajesh Palviya

Nifty opened with an upward gap and selling pressure in the first half dragged the index on Friday. However some buying support along at lower levels recovered some of the earlier losses to close on a flat note. The daily price action has formed a bearish candle carrying lower shadow indicating buying support at lower levels. The Nifty closed at 14681 with a loss of 19 points (-0.13%)

The weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. However momentum oscillator Stochastic has turned positive from the oversold zone indicating a possible consolidation or a up-move in the near term

Nifty derivative outlook

Nifty in current expiry has seen Short build up with a price cut of -1.46% and OI addition of 21 lac shares increasing from 102.38 Lac share to 123.24 Lac shares . The sentiment indicator PC Ratio is currently trading at 1.11 above the median line but still in a comfortable zone indicating positive bias. In Nifty the high OI on the CALL side in the weekly expiry scheduled 20th May is at 14,900, 15,000 & 15,300 strike, with 14,900 & 15,000 acting as a strong resistance wherein there has been writing of 16.13Lac shares & 16.80 Lac shares respectively. The high OI on the PUT side is at 14,500 -14,600 & 14,700 strike, with 14,600 & 14,400 acting as a strong support as there has been of writing of 12.20Lac shares & 10 Lac shares respectively. The tentative range for the current week is likely to be between 14,400 to 15,000. Fiis compared to last week have reduced their Future Index Long position by 8,545 contracts & have increased their Future Index Short by 15,964 contracts compared to

Bank Nifty outlook

Bank Nifty started the week on a flat note and remained negative throughout the week. Bank Nifty closed at 32170 with a loss of 735 points on a weekly basis.

On the weekly chart index has formed a bearish candle and has remained restricted within previous week’s High-Low range which signals indecision at current levels. Since the past couple of weeks, the index has been consolidating within 34000-31800 levels indicating short term consolidation. Hence any either side breakouts will indicate further direction. The chart pattern suggests that if Bank Nifty crosses and sustains above 33000 level it would witness buying which would lead the index towards 33500-34500 levels. However if the index breaks below 31900 level it would witness selling which would take the index towards 31500-30700. Bank Nifty is trading below 20, 50, and 100 day SMAs which are important short term moving averages, indicating negative bias in the short to medium term. Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 33500-31500 with mixed bias.

The weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. However, momentum oscillator Stochastic has turned positive from the oversold zone indicating a possible consolidation or an up-move in the near term.

Bank Nifty derivative outlook

Banknifty also saw Short build up with price cut of -4.56% & OI addition of 2.36 lac shares increasing from 13.97 Lac to 16.34 Lac shares. In BankNifty the highest OI on the CALL side in the weekly expiry is at 32,500 -33,000 & 34,000 strike, with 33,000 acting as a strong resistance zone wherein there has been writing of 5.13Lac shares, while on the PUT side highest OI is at 31,500 – 31,000 & 30,000 strike, with 32,500 acting as a pivotal level for this weekly expiry as there has been addition of 7.46Lac shares on CALL side & 2.54 Lac addition on PUT side suggesting that any sustain move on either side of this level (32,500) will decide the trend in Banknifty.

Sectors and stocks to watch this week

We expect the IT, Pharma, FMCG, Fertiliser and Consumer durable sector to do well in the near term. One can focus on stocks like Cipla, Lupin, PI Industries, Bata India, Wipro, Asian Paints, Pidilite Industries, Voltas for near term bullish trend. Midcap space also looks attractive and we expect stocks like Great Eastern Shipping Co Ltd, Welspun India, Eris Lifesciences, Gujarat State Fertilizers Chemicals (GSFC) are likely to do well in the near term.

(Rajesh Palviya is Vice President– Research (Head Technical & Derivatives) at Axis Securities Limited. The views expressed are the author’s own. Please consult your financial advisor before investing.)

Will Nifty rise above 19000 or sink further in trade? See GIFT Nifty, FII data, crude, more before market opens

Posted on by

GIFT Nifty traded up 48 points or 0.25% at 19,005.5, indicating a positive opening for domestic indices NSE Nifty 50 and BSE Sensex on Friday. Previously on Thursday, the NSE Nifty 50 tanked 264.90 points or 1.39% to settle at 18,857.25, while the BSE Sensex shed as much as 900.91 points or 1.41% to 63,148.15.

“In the backdrop of weak global cues, investors shunned local equities at will on the monthly F&O expiry day with benchmark Nifty closing below the crucial 19k mark amid sell-off in frontline banking, automobile and IT stocks. Investors are worried about the simmering West Asia conflict, economic uncertainty and rate hike woes, and hence maintained their bearish stance for the sixth straight session,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

Key things to know before share market opens on October 27, 2023

Wall Street

US stocks tumbled on Thursday, dragged by tech and tech-adjacent megacap shares as investors digested mixed quarterly earnings and signs of economic resiliency that could encourage the Federal Reserve to keep interest rates at a restrictive level longer than expected, reported Reuters.

The tech-heavy Nasdaq Composite tanked 225.62 points or 1.76% to 12,595.61. The S&P tumbled 49.54 points or 1.18% to 4,137.23, while the Dow Jones Industrial Average dropped 251.63 points or 0.76% to 32,784.3.

US Dollar

The US Dollar Index (DXY), which measures the value of the dollar against a basket of six foreign currencies, traded up 0.02% at 106.63.

Crude Oil

WTI crude prices are trading at $83.70 down 0.53%, while Brent crude prices are trading at $88.47 down 0.61%, on Friday morning.

Asian Market

Shares in the Asia-Pacific region are trading broadly in green on Friday morning. The Asia Dow is trading up 0.80%, the benchmark Chinese index, the Shanghai Composite is down 0.09%, while Japan’s Nikkei 225 is up 0.91%. Meanwhile, Hong Kong’s Hang Seng index is up 0.81%.

FII, DII Data

Foreign institutional investors (FII) offloaded shares worth net Rs 7,702.53 crore, while domestic institutional investors (DII) added shares worth net Rs 6,558.45 crore on October 26, 2023, according to the provisional data available on the NSE.

Technical View

Commenting on the technical outlook of Nifty 50, Rupak De, Senior Technical Analyst at LKP Securities, said, “Once again, bears remain at the helm as the Nifty slipped below 19,000 for the first time in four months, indicating a rising bearish condition. The bearish crossover in the momentum indicator also supports the negative momentum. In the current scenario, supports are appearing very fragile and vulnerable. Despite the recent sharp decline, further correction from the current level seems highly possible. Support on the lower end is visible at 18,600-18,645, while resistance is positioned at 18,950-19,000.”

Bank Nifty Outlook

On Thursday, the Bank Nifty index tumbled as much as 551.85 points or 1.29% to 42,280.15. “Bank Nifty is heading towards the psychological support of the 42,000. The fall has been very sharp and is appearing oversold which increases the probability of a pullback. The pullback can be expected till 42,500 – 42,600 however it is unlikely to result into a trend reversal. Overall, the trend is negative and we expect it to target levels of 40,850 from short term perspective,” said Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas.

Stalemate in overseas MF limits puts investors in a spot

Posted on by

The reluctance of regulators to raise the cap on investment limits in mutual fund schemes that invest in overseas securities has left investors that have put money in such schemes in a lurch.

The Securities and Exchange Board of India (Sebi) had advised fund houses to stop subscription in schemes that invest in overseas securities on January 29. The directive to stop subscription was mainly on account of the industry crossing the mandated limit of $7 billion for overseas investments.

Also Read: Rupee hits new lifetime low, nears 82 mark on strong dollar, weak markets; USDINR support at 81

While a few schemes did reopen for subscription, the majority of active schemes are now closed for subscription, either through lump sum or systematic investment plans, according to industry officials.

“It is not fair to the existing investors as they are not able to average out their investments. This stalemate has to be resolved and some breakthrough has to be found,” said Swarup Mohanty, chief executive of Mirae Asset MF.

Investors flocked to international funds in droves in the last-year-and-a-half amid a flurry of launches and attractive 3- and 5-year returns. As many as 29 such schemes have been launched since 2021 with a dozen focused on US equities.

“The investors may note that till any further clarification/notification is received from Sebi/Amfi in this regard, the overseas investment limit shall remain capped at the amount as on end of day of February 1, 2022. The AMC reserves the right to suspend the subscriptions/reject/refund the applications from the investors as and when it is close to the overseas investment limit available as on end of day of February 1, 2022,” reads the addendum of a large AMC, which reopened subscription in five of its schemes in June.

The S&P 500 and Nasdaq are down 24% and 31%, respectively. China’s Shanghai Composite is down 16%, while Germany’s DAX index is down 25%.

“From a market timing perspective, this would be a good time to invest since a lot of international markets have corrected significantly. Unfortunately, existing investors in some of these funds can’t average out because schemes are closed for subscriptions,” said Niranjan Avasthi, head – products, marketing and digital, Edelweiss Asset Management.

Financial planners believe that the current restrictions may create an asset allocation problem for investors who want to diversify in different geographies and reduce single-country risk.

“If your scheme has not opened then you may want to look at exposure to a comparable scheme from a different fund house. But do not go overboard and invest only to the extent your asset allocation allows. The US indices, for example, are trading near 52-week lows and present an opportunity to fill the asset allocation gap,” said Amol Joshi, founder of Plan Rupee Investment Services.

Investors can also look at investments into overseas ETFs because the $1-billion limit is yet to be fully utilised. Currently, MFs can make investments in overseas ETFs subject to a maximum of $300 million per MF, within the overall industry limit of $1 billion.

“Edelweiss international FoFs are open for subscriptions and we are seeing smart investors investing more and many continuing their SIPs at this point,” said Avasthi.

Last year in June, Sebi had increased the limit from $600 million to $1 billion per mutual fund within the overall industry limit of $7 billion.

Financial planners recommend setting aside 5-10% of one’s portfolio in international funds. Those who have already invested in international funds can stay put and hope for markets to recover, and mean reversion to play out.

Reliance Industries Rating: Buy – Building the next engine of growth

Posted on by

We delve deep into Reliance Industries (RIL)’s FY22 Annual Report, underscoring the key initiatives and business outlooks for its various segments. The key highlights of our analysis are:

The report showed RIL’s FY22 belonged to the O2C (order to cash) segment performance that outpaced other segments, even as RJio retained its market share. Retail business saw a steady recovery. The high crude prices led to 56% y-o-y Ebitda growth in O2C business while Retail grew 28% y-o-y; RJio growth, however, decelerated to 22% y-o-y. Post-equity raise during the last couple of years, FY22 saw a strong capex with heavy investments, especially in RJio, which included a large-scale spectrum investment. Retail witnessed aggressive footprint additions, while new energy reported aggressive acquisitions. The growth momentum and improved margin profile across the sector will drive RIL’s revenue/Ebitda growth of 25%/32% in FY23E, respectively. Over the next two-to-three years, RIL is likely to create the next engine of growth but it could put pressure on its near-term return ratios.

Also Read: FPIs infuse Rs 5,600 crore in Indian equities in September so far 

Retail benefitting from Covid-19 recovery and store additionsReliance Retail clocked a robust growth of 29%/28% y-o-y in standalone revenue/Ebitda, propelled by recovery in footfalls as well as footprint additions. Core Ebitda too rose 35% y-o-y, though merely 6% over pre-Covid levels, as resumption in business included incremental costs.

Store additions (of 2,485) remained strong and the continued focus on online segment too reaped benefits.

O2C segment benefiting from higher crude pricesRIL restructured its Refining and Petrochemical segments into the O2C segment to attract strategic partnerships. Demand improved in FY22 y-o-y (on a lower base), which led to expanded margins in refined products. Gasoline margin improved sharply .

Opening up of the economy and removal of travel restrictions would enable demand to pick-up faster than expected. SG GRM to remain high at an average of ~$18/bbl in FY23, as demand continues to outweigh supply. Management believes that low Chinese exports and peak maintenance season will support product margins going forward.

Capex and debtRIL’s total capex stood at Rs 970 bn, primarily for the Digital, Retail, and O2C businesses along with the forex impact, while capitalised capex stood at Rs 1.5t primarily due to RJio.

Valuation and viewThe crude price improvement continues to prop up strong growth momentum in FY23. We expect consolidated revenue and Ebitda to clock 15% CAGR each over FY22-FY24, which do not factor in any incremental growth from 5G capex, new energy and other segments. These could create the next engine of growth over the next two-to-three years as each of retail, telecom and new energy is seeing notable technological advancement with ambitious growth targets. However, this has the potential to dent the existing single-digit return ratios. We reiterate our BUY rating on RIL with a TP of Rs 2,880.

Buy these two stocks for gains in coming weeks while Nifty maintains its uptrend

Posted on by

By Subash Gangadharan

Markets have been continuously moving higher over the last few sessions and making new life highs in the process. Buying has emerged on any intraday dips, thereby ensuring the uptrend remains intact. The short term uptrend is however beginning to look stretched. While the Nifty/Sensex could move up further in the very near term, we believe that these main indices could make a short term top soon. Zooming into the intraday charts of the Nifty, we can see that the index may be forming a head and shoulder pattern.The Sensex is also very close to the psychological level of 50,000, which is another reason to trigger a short term sell off. Crucial supports to watch for a short term trend reversal on the Nifty are at 14435. A close below this level could lead to the Nifty coming down towards the 14300-14200 levels.Buy CESCAfter correcting from a high of 700 touched in September 2020, CESC found support at the 555 levels in early November 2020. These levels also roughly coincide with the previous supports tested in May and Aug 2020, thereby making it a strong support.

Yesterday, the stock also broke out of the recent high of 640 on the back of above-average volumes. This augurs well for the uptrend to continue.

Technical indicators too are giving positive signals as the stock trades above the 20-day and 50-day SMA. Intermediate momentum readings like the 14-week RSI too are in rising mode and not overbought.

We believe the stock is ready to continue the next leg of its underlying uptrend and has the potential to move higher in the coming weeks. We, therefore, recommend a Buy between the 670-685 levels. CMP is 683. Stop loss is at 624 while targets are at 810.

Buy ITCITC has entered into a new intermediate uptrend a few weeks back as it crossed its previous intermediate high of 210. The stock has since then corrected and consolidated in a range above the 200-day EMA.

Today, the stock broke out of the 200-206 range on the back of above-average volumes. This suggests that the stock is ready to move higher and continue its intermediate uptrend.

Technical indicators too are giving positive signals as the stock trades above the 20-day and 50-day SMA. Intermediate momentum readings like the 14-week RSI too are in rising mode and not overbought.

We believe the stock is ready to continue the next leg of its underlying uptrend and has the potential to move higher in the coming weeks. We, therefore, recommend a Buy between the 208-212 levels. CMP is 211.2. Stop loss is at 205 while targets are at 226.

(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are personal. Please consult your financial advisor before investing)

Gold to experience bargain buying in short-term on weak Indian Rupee; US inflation, retail sales data eyed

Posted on by

By Jigar Trivedi

MCX Gold October, after three back to back weekly declines, rose toward $1,720 an ounce, benefitting from a pullback in the dollar as investors digested Fed Chair Jerome Powell’s latest remarks about inflation. Powell said the Fed is “strongly committed” to fighting inflation, but markets took his comments in stride as traders have already priced in another supersized 75 basis point rate hike at this month’s policy meeting. The ECB also delivered a historic 75 basis point rate increase and signaled further tightening as it aims to get ahead of inflation despite heightened recession risks. Meanwhile, gold remains within 3% of its lowest levels in over two years, having also lost its shine as a hedge against inflation and economic uncertainty as rising interest rates dented bullion demand.

Another 75bp in an environment of strong growth and rising core price pressures

Federal Reserve Chair Jerome Powell’s comments on monetary policy are clearly supportive of a third consecutive 75bp interest rate hike on 21st September. There is no hint that he supports moderation, arguing that “we need to act now, forthrightly, strongly as we have been doing and we have to keep at it until the job is done”. There is also the usual mention of inflation expectations and the need to anchor them in order to ensure inflation doesn’t become ingrained.

The latest data certainly backs the case for 75bp with business surveys looking robust, the labour market continuing to create jobs in significant numbers, and next week’s inflation numbers set to show core CPI accelerating to 6.1% from 5.9%. Moreover, the third quarter is shaping up to be quite a strong one, fully reversing the declines seen in GDP in the first half of the year.

Inventories and net trade are swinging back and set to make decent positive contributions to headline growth. Meanwhile, consumer spending is being boosted by the lift in spending power from lower gasoline prices. High-frequency data over the Labor Day holiday show restaurant dining at record levels, while air passenger travel over the past weekend exceeded that of 2019 for the first time, so 3% growth looks to be on the cards.

Also read: MCX Gold outguns Comex on weak Indian Rupee, yellow metal may trade sideways; buy on dips for gains

Dollar eases after Powell & ECB remarks

The dollar index eased below 109 Friday and was set to snap a tree-week advance, as traders took some profits following a strong rally, while assessing Federal Reserve Chair Jerome Powell’s latest remarks about inflation. Powell said the Fed is “strongly committed” to fighting inflation and cautioned strongly against prematurely loosening policy. However, markets largely took his remarks in stride as traders have already priced in another supersized 75 basis point rate hike at this month’s policy meeting. His comments were also offset by the European Central Bank’s decision to raise its policy rate by a historic margin of 75 basis points on Thursday and signaled further tightening as it aims to get ahead of inflation despite heightened recession risks. Investors now look ahead of US CPI data for August to be released next week, which will be the last inflation report before this month’s policy meeting.

Comex, MCX gold outlook

Next week we expect the yellow metal to experience a short covering on the back of weak dollar index. The US will release CPI for August is expected to come on 13th September which will be keenly monitored. On 15th September, Thursday the US will release retail sales and industrial production for August. Investors will also have to monitor Fed monetary policy which is scheduled on 21st September. Traders are expecting the Fed to increase the rate by another 75 bps. Under this circumstance, we expect the dollar to retreat a bit since the market has discounted almost every aggression by the Fed. MCX Gold October may rebound to Rs 50,900 – 51,300 per 10 gram in the coming week. Comex gold is expected to recover to $1,740 an ounce in the week to come.

(Jigar Trivedi, Senior Analyst – Currency & Commodity, Reliance Securities. Views expressed are the author’s own.)

US Stocks: Tech stocks drive gains in futures

Posted on by

U.S. stock index futures rose broadly on Friday, led by gains in tech and high-growth stocks, with investors awaiting key inflation data next week for clues on the pace of interest rate hikes by the Federal Reserve.

Fed Chair Jerome Powell’s hawkish comments led to a choppiness in trading on Thursday, but the three major indexes were still on track to post weekly gains and snap a three-week losing streak.

The CBOE volatility index, a gauge of investor anxiety, remained elevated at 23 points, which is above its long term average of 20.

Also Read: Share Market HIGHLIGHTS: Sensex ends 105 pts up, Nifty at 17833 amid volatility; Infosys, TCS, SBI stocks jump

Meanwhile, the U.S. dollar retreated from recent peaks after the European Central Bank’s 75-basis point rate hike on Thursday helped boost sentiment and provide some relief for global stocks and currencies.

High growth stocks Tesla, Apple Inc, Alphabet Inc, Amazon.com Inc firmed about 1% each in premarket trading.

Investors will now watch out for the August U.S. inflation report due next Tuesday to gauge the likelihood of another large interest rate hike from the Fed at its policy meeting later in the month.

Traders are pricing in an 87% chance of a 75 basis point rate hike at the next meeting, up from 57% a week earlier, according to CME Group’s Fedwatch tool.

At 6:41 a.m. ET, Dow e-minis were up 264 points, or 0.83%, S&P 500 e-minis were up 36.5 points, or 0.91%, and Nasdaq 100 e-minis were up 143.25 points, or 1.16%.

Shares of Digital World Acquisition Corp, the blank-check company which has agreed to take former U.S. President Donald Trump’s social media company public, rose 6.2% premarket after it said it would extend its life by three months.

Shares of Caterpillar Inc rose 1.6% after the company reached a tax settlement with the U.S. IRS.

Nykaa, Hindustan Copper, Godrej Properties, Dish TV, Supriya Lifescience stocks in focus on monthly F&O expiry

Posted on by

Indian benchmark indices BSE Sensex and NSE Nifty 50 are expected to open higher on Thursday, weekly & monthly F&O expiry. SGX Nifty was up in green ahead of the session hinting at a positive start for the Indian share market. “Markets are not seeing any relief citing feeble global cues and a breakdown of 16,800 in Nifty could further dampen the sentiment. Meanwhile, oversold positions in select index majors may result in a marginal bounce in between. We reiterate our view to focus more on risk management and prefer defensive,” said Ajit Mishra, VP – Research, Religare Broking.

Stocks in focus on 29 September, Thursday

Also Read: Sensex, Nifty fall for 6th day straight ahead of monthly F&O expiry; Rupee at new low, Nifty support at 16800

Hindustan Copper: The company on Wednesday announced the highest-ever dividend per share at 30.01% of the net profit in FY22 with a net profit of Rs 373.78 crore, a 338% jump over the previous year’s net profit of Rs 109.98 crore. The total payout on account of the dividend would be Rs 112.17 crore.

Godrej Properties: The company has acquired a 7-acre land parcel in Bengaluru for development of a premium housing project that has an estimated Rs 750 crore revenue potential. It did not disclose the price at which the land has been acquired. The name of the seller was also not mentioned. In a regulatory filing, Godrej Properties said it has acquired a land parcel that is strategically located in the immediate vicinity of Indiranagar, Bengaluru.

Gensol Engineering: The company said the board has approved the preferential allotment of 12,81,993 equity shares at an issue price of Rs 1,036.25 per share. With this, it has raised Rs 132.84 crore via preferential issue.

Blue Dart Express: The company has announced an average shipment price increase of 9.6 percent for 2023 as compared to 2022. The general price increase will be effective from January 1, 2023.

Dish TV: The company’s board approved the transfer of its entire stake in Dish TV Lanka to Union International for 25 million Sri Lankan rupees (Rs 55.84 lakh). Following the transaction, Dish TV Lanka will stop to be a subsidiary of the company.

Also Read: Modi’s free ration scheme for poor gets 3-month extension, eyes 80 crore beneficiaries; to cost this much

Supriya Lifescience: The company has received Certification of Suitability (CEP) for Diphenhydramine hydrochloride, API in anti-histamine therapy, from European Directorate for the Quality of Medicines and HealthCare (EDQM). This will be an added advantage for Supriya Lifescience in the European market. Global demand for Diphenhydramine Hydrochloride is 1850 tons, of which major demand is in the regulated markets.

Britannia, Hindalco among top technical stocks to buy; watch out for these levels for Sensex, Nifty

Posted on by

By Shrikant Chouhan

FMCG and technology stocks saved the market on Tuesday, otherwise, the Nifty/Sensex would have reached 14,800/50000 again due to weakness in bank stocks and metal companies. The global market was stable and long-term bond yields were also trading in the short-range. We believe that the markets would remain on the sidelines until the FOMC meeting is completed (Results will come Thursday morning) in the US. Keep an eye on the 14750/49800 and 15100/51000 range. Long positions should be bought between the levels of 14750/14800 (49800/50000) with a stop loss of 14700/49600 in the near future. We are likely to see trending activity after the FOMC meeting. The focus should be on FMCG and Infrastructure related stocks.

Britannia Industries

BUY, CMP: Rs: 3,489, TARGET: Rs 3,660, SL: Rs 3,420

After the strong rally from support zone of 3320 till 3500 the stock took a pause in momentum activity and currently on the daily time frame the stock has formed a cup and handle chart formation along with pick up in volume activity near its 20 day EMA which indicates uptrend move in near term.

NCC Ltd

BUY, CMP: Rs 87.6, TARGET: Rs 93, SL: Rs 84

The stock has presented a bullish continuation chart formation from the last few weeks and currently after the up move it is into a sideways movement forming a flag pattern on daily time frame. Positive parabolic SAR series and modest volume activity near important support level suggest strong possibility of fresh uptrend from current levels.

Manappuram Finance

BUY, CMP: Rs 163.9, TARGET: Rs 173, SL: Rs 159

The stock has corrected around 15% from the levels of 185 to 158 and currently the stock has been hovering in its demand zone which has emerged as a good base for the stock. Formation of harami candlestick pattern near important support area indicates a bullish reversal.

Hindalco Industries

BUY, CMP: Rs 333.9, TARGET: Rs 350, SL: Rs 325

After the strong rally from 200 to 350 levels, the stock went into a corrective pattern however a hammer candlestick formation has occurred near its 20 day EMA. For the positional traders 330 should be the key level to watch trading above the same with decent volume action we expect uptrend to resume in coming sessions.

(Shrikant Chouhan is the Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)

US stocks: Wall Street set to fall on aggressive rate hike worries

Posted on by

Wall Street‘s main indexes were set for a lower open on Monday, extending declines for a third straight day as investors worried that another massive interest rate hike by the Federal Reserve could tip the U.S. economy into a recession.

The S&P 500 and the Nasdaq logged their worst weekly percentage drop since June on Friday as markets fully priced in at least a 75-basis-point rise in rates during the week, with Fed funds futures showing a 21% chance of a whopping 100 bps increase.

Also read: Sebi looks to boost surveillance of social media, other platforms through web intelligence tool

“Markets are going to be looking for direction until the Fed meeting, there won’t be much trading action till then,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland.

The S&P 500 has lost nearly 19% so far this year on worries of a central bank-induced recession amid recent warnings of slowing demand from delivery firm FedEx and an inverted U.S. Treasury yield curve.

“I think a recession is very likely. The Fed regards a recession as regrettable, but necessary to fight inflation,” Grisanti said.

The CBOE volatility index, also known as Wall Street’s fear gauge, rose to 27.72 points, inching closer to a more than two-month high.

Focus will also be on new economic projections, due to be published alongside the policy statement at 2 p.m. ET (1800 GMT) on Wednesday.

Goldman Sachs cut its forecast for 2023 U.S. GDP late on Friday as it projects a more aggressive Fed and sees that pushing the jobless rate higher than it previously projected.

“We think a 100 bps hike would unnerve Wall Street … and would increase the likelihood that the FOMC will eventually overtighten and lessen the possibility of achieving a soft landing,” Sam Stovall, chief investment strategist at CFRA, wrote in a note.

Also read: Gold Price Today, 19 Sep’22: Gold falls despite positive global cues; US FOMC eyed, check support, resistance

At 8:20 a.m. ET, Dow e-minis were down 269 points, or 0.87%, S&P 500 e-minis were down 35 points, or 0.9%, and Nasdaq 100 e-minis were down 112.5 points, or 0.94%.

Heavyweights Microsoft Corp, Amazon.com, Meta Platforms, Alphabet Inc, Apple Inc , Tesla Inc and Nvidia Corp fell between 0.9% and 1.5% in premarket trading.

Bank of America slipped 1.1% to lead declines among the big U.S. Banks.

Take-Two Interactive Software Inc slid 4.2% following a report that a hacker had leaked the early footage of Grand Theft Auto VI, the next installment of the best-selling videogame.