Month: November 2023

Markets snap week-long losing streak

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In a relief rally, Indian equities snapped their seven-day losing streak on Friday as the central bank commentary indicated that the India’s economy was on a strong footing despite global headwinds.

The Sensex ended at 57,427, up 1,017 points or 1.8%, while the Nifty 50 settled at 17,094, up 1.6%, gaining the most in a month.

The indices, however, extended losses over the week, logging the third consecutive week of declines.

FPIs have turned net sellers in September, after two consecutive months of buying in July and August. The investors have sold shares worth $0.9 billion in the month, taking the year-to-date sales to $22.3 billion, data shows.

Also Read: SC to hear Sebi’s review plea against RIL in open court on Oct 12

“What lifted the market sentiment was the RBI’s policy rate hike of 50 bps that came in as expected and its comment that India’s economy remains on strong footing despite global headwinds. The relief rally was backed by investors’ preference for growth-driving stocks from banking, automobile, realty & metal space. However, global macro factors will continue to dictate the domestic market sentiment going ahead as any fresh spell of negative news could once again trigger the downward spiral,” said Amol Athawale, deputy vice-president – Technical Research, Kotak Securities.

The RBI raised the repo rate by 50 basis points on Friday in line with market expectations.

“The RBI indicated more rate hikes are in store. Another 25-35 bps is likely in this remaining part of CY22 and will depend on the Fed outcome and evolving global situation. The comforting thing from this MPC meeting is no change in the inflation target of 6.7% (FY23) and a minor tweak in the growth rate from 7.2% to 7% for FY23,” said Aishvarya Dadheech, fund manager, Ambit Asset Management.

Shares in the Asia-Pacific ended mixed on Friday, with the Nikkei 225 sliding the most at 1.8%, following another sell-off on Wall Street overnight. European stocks were trading higher on Friday as government bond yields pulled back from recent peaks, but higher-than-expected inflation continued to weigh on markets.

The UK economy grew in the second quarter, with GDP rising 0.2%, a surprise improvement on the previous estimate of a fall of 0.1%. Euro zone inflation hit a new record high of 10% in September, up from 9.1% in August and above consensus projections of 9.7%.

“Recession talk will invite hopes of a Fed pivot at a time when the American central bank is still in the process of trying to regain its inflation fighting credibility. Still, it will take time for the labour market to weaken, which is why the best hope of a quicker-than-expected Fed change of language is a major financial accident in terms of bodies surfacing, and the risk of that is rising by the day,” said Christopher Wood, global head of equity strategy at Jefferies.

“Nifty formed an engulfing bull pattern on daily charts while forming a bullish hammer pattern on weekly charts despite a 1.35% weekly fall. This could portend an upside bounce in the coming week with 17,292 and 17,540 being the upside targets,” said Deepak Jasani, head of retail research at HDFC Securities.

Gold Price Today, 26 Sep 2022: Gold falls to over 2-yr low on strength in US Dollar; check support, resistance

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate and silver rate were trading weak in India on Monday, on the back of the strength in US Dollar. On Multi Commodity Exchange, gold October futures were trading low at Rs 49,425 per 10 gram. Silver December futures were ruling Rs 521 or 1 per cent down at Rs 55,712 per kg. Globally, yellow metal prices fell to a new 2-1/2-year low weighed down by a sturdy dollar and prospects of further interest rate hikes by the U.S. Federal Reserve to bring down inflation, according to Reuters. Spot gold was down 0.3% at $1,638.59 per ounce, after hitting its lowest level since April 2020 earlier in the session. U.S. gold futures fell 0.6% to $1,645.8.

Also read: S&P Global projects India’s FY23 GDP growth at 7.3%; estimates inflation to fall to 5% in next fiscal

Gold is trading at 2.5 year low in COMEX. The big news is GBP falling to an all time low after unveiling a mini budget on Friday. Indian rupee followed its peers and opened at fresh all time low giving some cushion to gold prices in MCX. Looks like this dollar rally is not peaking. The current market environment will likely remain unsettling. With the Dow touching the lowest level of the year on Friday and more volatility ahead, gold is unlikely to see a strong rally in the short term. $1600 is the new support and breach below that would push prices to $1540. The only positive note for gold is that these levels have attracted buyers. It makes physical gold cheaper but the issue is weak currency is not making gold cheaper to all countries as their currencies are also depreciating. 48950 is the support in MCX while 50175 is the resistance. Any dip near 48800 should be used as an entry point for a long position in gold.

Also read: Nifty may hit 18300 in Oct, Bank Nifty looks positive ahead of RBI MPC, monthly F&O expiry; Buy SBI, Titan

Jigar Trivedi, Senior Analyst – Currency & Commodity, Reliance Securities

The yellow metal dropped to a new 2-1/2-year low, weighed down by a sturdy dollar and prospects of further interest rate hikes by the U.S. Fed’s to bring down inflation. Comex gold is now down by more than 20% from $2,000 an ounce it hit in March 2022. Holdings of SPDR Gold Trust, the world’s largest gold-backed ETF, fell 0.31% to 947.23 tonnes on Friday. Looking at the fundamental and technical set up, we may see further decline in the precious metals nonetheless, India celebrates Navratri from today onwards and buying gold during these days is considered an auspicious activity. Hence we do not deny possibilities of a rebound. For intraday, Rs. 49,800 per 10 gram is likely to level on the up side.

Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

Gold prices fell to a new 2-1/2-year low, weighed down by a sturdy dollar and prospects of further interest rate hikes by the U.S. Federal Reserve to bring down inflation.The dollar index continues to make fresh 20 year highs, amidst a hawkish Fed. Atlanta Fed President Raphael Bostic said he still believes the U.S. central bank can tame inflation without substantial job losses given the economy’s continued momentum. There are a lot of updates regarding geo-political tensions between Russia-Ukraine, North and South Korea which has grabbed a few eyeballs although market participants are awaiting further clarity on the same. Spike in Dollar Index, Yields, interest rate do increase distress in the market, weighing on the safe haven assets. A downturn in business activity across the euro zone deepened in September, according to a survey which showed the economy was likely entering a recession as consumers rein in spending amid a cost of living crisis. This week will be important as market participants along with focusing on comments from officials of major central banks will also keep their eyes on U.S. GDP, Core PCE. Broader trend on COMEX could be in the range of $1620-1670 and on domestic front prices could hover in the range of Rs 49,000-49,675.

Pritam Patnaik,Head – Commodities, HNI and NRI Acquisitions, Axis Securities

Gold prices have breached, and continue to trade below the physiological level of $1650, largely because of a surging dollar index, which sits on a new high of 113.567 and an overtly hawkish outlook painted by the US Fed. The fact that central banks globally are ready to sacrifice growth to rein in inflation, have clearly paved the path for a higher interest rate regime, which doesn’t augur well for a non interest yielding gold prices. Adding to that, recession fears have further added to the safe haven appeal of the USD, propelling it higher. The pain will continue for gold in the short term.

(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

Sensex falls for 4th day straight, Nifty support at 16907; investors eye crude oil prices, RBI MPC meet

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BSE Sensex and NSE Nifty 50 ended in negative territory for the fourth consecutive trading day on Tuesday. BSE Sensex fell 38 points or 0.01 per cent at 57108, while NSE Nifty 50 ended 9 points down at 17007. Index heavyweights such as ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Housing Development Finance Corporation (HDFC), and State Bank of India (SBI), among others contributed the most to the indices’ loss. Broader markets outperformed equity frontliners. S&P BSE MidCap index ended flat at 24,554, while the S&P BSE SmallCap index gained 137 points or 0.5 per cent to settle at 27,991. India VIX, the volatility index, fell 1.5 per cent to settle at 21,57 levels.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Also read: June 2022 biggest month for travel, this Rajasthan city tops list of India’s favourite destinations: OYO study

Deepak Jasani, Head of Retail Research, HDFC Securities

Global markets remained on edge and were mixed Tuesday as investors braced for a heightened risk of global recession, even as dip buyers emerged. Chinese markets recovered on expectations of more stimulus measures by the government. People’s Bank of China injected about $24.7 billion of liquidity into the sector via repo market operations. Nifty took support from the upgap of 16947 and closed flat after making a lower low compared to the previous day. The downtrend in the Nifty may have halted temporarily, though it needs to close above 17196 for confirmation. On falls, 16942 will be watched closely.

Rupak De, Senior Technical Analyst, LKP Securities

The benchmark Nifty remained range bound ahead of the RBI policy meet. The index briefly slipped below 16950 as it failed to sustain at the lower level leading to a close above 17000. On the lower end, bulls have managed to protect the 200 DMA on a closing basis. The momentum indicator is in a bearish crossover. The trend remains weak; however, the proximity to the crucial support may induce a pullback in the market. On the higher end, resistance is visible at 17150-17200. Above 17200, the Nifty may move towards 17500. On the other hand, a decisive fall below 16950 may trigger a panic button.

Also read: India defers govt bond index inclusion to next year; $30 bln opportunity pushed back due to operational issues

Vinod Nair, Head of Research, Geojit Financial Services

In search of a safer dollar and elevated bond yields, foreign investors are withdrawing from Indian equities, resulting in the decline of the domestic market. In contrast to the recent trend of sector performance, banks and autos are exhibiting negative bias, while IT and pharma are showcasing resilience. Crude prices are closing down, despite expectations that OPEC+ will take more action to cut production in the coming meeting, due to the weakening global economy.

Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities

Volatility was the hallmark of today’s trade as on backdrop was the risk of recession in financial markets across the globe. The street suspects that the Fed will move so aggressively as to cause a recession. The other biggest headwind that markets across the globe face is inflation. Traders will now spy with one big eye on how much the RBI will tighten monetary policy—and raise interest in its meeting on Friday to tackle inflation in the remaining year. Technically, the biggest support to watch on Nifty will be at 16907. As long as 16907 support is held, there is a bright chance that Nifty could bounce to 17347 and then at the 17727 mark.

Nykaa board to meet on October 3 to consider bonus share issuance

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Cosmetics and fashion retailer Nykaa on Wednesday said the company’s board will meet on October 3 to consider and approve the issuance of bonus shares to its existing shareholders.

“We wish to inform you that a meeting of the board of directors of the company will be held on Monday, October 3, to interalia, consider and approve the issuance of bonus shares to the equity shareholders of the company in the ratio, as it may deem fit and seeking shareholders’ approval by way of postal ballot and such other approval(s), as the board may deem appropriate,” a regulatory filing by the company to the stock exchanges said.

Bonus shares are additional shares given to the current shareholders of the company without any additional cost, based upon the number of shares a shareholder owns. These are the company’s accumulated earnings, which are not given out in the form of dividends, but are converted into free shares.

During the April-June quarter, Nykaa posted a 43% year-on-year jump in its net profit to Rs 5 crore, against Rs 3.52 crore in the same period a year ago.

Consolidated revenue from operations during the period increased 41% to Rs 1,148.42 crore during the period, while operating margin stood at 4%, up 70 basis points.

The company’s gross merchandise value grew 47% on year to Rs 2,155 crore during the quarter. Within the business, Nykaa’s beauty and personal care segment saw GMV grew 39% year-on-year to Rs 14,88 crore, while the fashion segment’s GMW grew 59% on year to Rs 582 crore.

On Wednesday, FSN E-Commerce Ventures’, Nykaa’s parent firm, shares closed at Rs 1,277.35 apiece on the BSE , down 0.8% from previous day’s close.

5 Nifty stocks to buy post Budget 2021; technical charts show strong gains as Nifty 50 eyes further upside

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By Shrikant Chouhan

Markets are happy with the outcome of the Union Budget. Banks, infra and commodities were preferred sectors from major participants of the market on the completion of the Budget announcements. Nifty has broken all the important resistance levels led by strong companies. Technically, the market has created a strong bullish reversal pattern on a daily chart is moving towards the 14500 levels. Traders should consider reducing the weak positions on the resistance or around the cost price. The strategy would be to buy in the market if it corrects to 14200. The Nifty would move above to the level of 15300 if it crosses 14800 levels. The bank nifty has cheered the sentiment and surpassed the previous high, which was at 32842 levels. As per the charts, it is heading for the levels of 34500 in next few weeks.

Escorts: As per the Japanese candlestick formation the stock has formed “Inverted Hammer” formation after hitting the support area of 1200. It is heading higher for the upward boundary which is at 1350. Buy at current levels with a final stop loss at 1230.

HDFC Life Insurance Company: The stock has formed a higher bottom at 670 and reversed back sharply. It has next resistance in the region of 725/730. Buying is advisable with a strict stop loss at 680.

Tata Motors: It is trending upward and after consolidating between the levels of 255/270, it could move to set a new high above the levels of 307. Buy at current levels and for that keep a final stop loss at 267.

Axis Bank: It is the most out performing stock within the basket of Bank Nifty. It has decisively surpassed the psychological mark of 700. Based on long term charts, the stock is ready to surpass all-time high levels. However, in the short term 735/745 would be major hurdles. Keep a stop loss at 695 for creating any long position.

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

TCS, ICICI Bank, other must-have stocks: Time to rejig investment portfolio post Budget 2021? INTERVIEW

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Union Budget 2021 largely focussed on the infrastructure sector, and no negative announcements fueled the rally Indian stock market for the six consecutive days. Also, key announcements related to the banking sector pushed the Nifty Bank index nearly 18 per cent higher after the Budget. In comparison, the Nifty 50 index jumped nearly 11 per cent so far in February. Investment advisor Sandip Sabharwal tells Surbhi Jain of Financial Express Online that the biggest driver of the markets now is easy liquidity which needs to be monitored. Sandip Sabharwal also talks about the key sectors where investors can look for opportunities. Even as Budget 2021 is over now, Sabharwal lists key drivers and risk tiggers in the markets going ahead. Here are the edited excerpts.

1. How would you rate Union Budget 2021 and why?

2. Which sectors could benefit and lose from Budget proposals?

There has been some focussed targeting of infrastructure investments so those companies should benefit. If the government is able to carry through with its proposals for strategic disinvestments then we could see a re-rating of the PSU Basket. With the water projects being in focus we could see some pipe companies do well. There were no clear cut losers due to the budget proposals.

3. Is it a time to rejig the investment portfolio post Budget presentation? What should be the investment strategy now?

Domestic cyclicals could do better going forward as they are cheaper on valuations as well as could see greater growth traction. Many recovery plays of companies that were impacted most due to the Covid related lockdowns could come back sharply and do well. The Real Estate sector is seeing some renewed comeback after years of low growth and presents investment opportunities. Highly valued consumer stocks could underperform for some time.

4. Going ahead, what factors would drive the stock markets and what are the key risks?

Easy liquidity is the biggest driver of the markets today and to that extent that needs to be carefully monitored. Return to normalcy trades will do well and for that we need to see the effectiveness of Vaccines and hope that there is no resurgence of Covid. The biggest risk is commodity price driven inflation which could take interest rates higher and impact market valuations. The other big risk is the large borrowing program of the government where if there is an economic revival and credit growth improves then government borrowings can crowd out private investments.

5. If someone is looking to build a portfolio of 5 stocks for the next 3 years, then according to you which are the must-have stocks in that portfolio?

The split can be across sectors. A large back could be ICICI Bank. With a focus on infrastructure, Larsen and Toubro (L&T) could do well. In the Cement sector, the largest player UltraTech Cement is good. In pharma, Sun Pharmaceuticals Ltd is well placed in the growth valuation paradigm and in Technology, Tata Consultancy Services (TCS) should do well.

Mahindra Lifespace Developers share price jumps over 2%; stocks hit fresh 52-week high on BSE

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Shares of Mahindra Lifespace Developers touched its 52-week high in the morning trade on Monday after the realty firm said it is looking to acquire a few land parcels this fiscal to build housing projects. Shares of the company opened at Rs 541.95 on Monday, then gained 2.37 per cent to touch Rs 550.40, its 52-week high level on the BSE. Similar movement was seen on the NSE as well. The stock opened at Rs 539 and later touched its 52-week high of Rs 539.30 apiece.

Also read| Mahindra Lifespace crossing $1 bn m-cap proves firm can survive without black money, says Anand Mahindra

Also read| Mahindra Lifespace to buy few land parcels in FY’23 with sales potential of Rs 3000-4000 crore

He highlighted that the company already acquired a land parcel this fiscal that has a Gross Development Value (GDV) of Rs 1,700 crore and the deal pipelines are strong. In terms of the GDV, he said the new land acquisition should be in the Rs 3,000-4,000 crore range and the company was well above the guidance in creating new business development opportunities.

Market valuations seem overextended; these sectors could be hit by localised lockdowns | INTERVIEW

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Although domestic stock markets have corrected from their all-time highs, market valuations still seem to be overextended given the economic outlook, said Investment advisor Sandip Sabharwal in an interview with Surbhi Jain of Financial Express Online. He added that consensus earnings estimates are very high and could be tough to achieve. The market veteran added that the second wave of covid-19 is likely to impact the April to June quarter earnings of various sectors as states revisit imposing lockdowns. Here are the edited excerpts.

Amid the second COVID-19 wave, do you find market valuations reasonable? Is there any scope for further correction?

What do you make of corporate earnings by IT companies so far?

IT company earnings were fine. However, the risk is in earnings as margins are likely to be under pressure given wage hikes and lack of support from currency movements. The good part is that the business outlook continues to be strong for IT companies and that will prevent any significant decline in stock prices.

Do you think fresh localised restrictions including curfews and weekend lockdown to curb COVID will hit Apr-June quarter results?

Companies were facing unprecedented raw material price hikes even prior to the lockdowns and earnings growth outlook ex of the metals and commodity basket was looking shaky. The localised lockdowns are in a way a double whammy where margins are under pressure and on top of that sales are also likely to be impacted which will reduce the operating leverage which could have played out and helped the companies bypass some of the margin pressure. The impact on April to June earnings is likely to be real and significant especially in some pockets like consumer goods, automobiles, retail etc

In the past week, IT and Realty indices plunged up to 6 per cent, what’s weighing on these sectors?

Technology stocks corrected just because they had run up rapidly and most traders were overbought on the sector. Realty typically is high beta and whenever there is a sharp market correction then these stocks correct more. However, the outlook for real estate is not negative and the cycle has turned after many years and is likely to sustain.

What would be an appropriate strategy for Nifty Bank traders?

Nifty Bank traders should be cautious. The banking sector outlook which was improving could take a hit due to lockdowns and the impact on MSME’s and retail loans. The NPA picture might take more time to improve and that could be negative. On top of that inflation has picked up substantially which is typically negative for financials.

Indian rupee becomes Asia’s worst-performing currency in just two weeks, where is the rupee headed?

The INR outlook is more towards a depreciation cycle now as the interest rate differentials between India and the USA is not attractive given the growth and inflation outlook. In case the Indian Economic recovery lags that of the other Emerging Markets due to the second Covid wave we could see rupee underperformance continue.

(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)

Sebi extends two-factor authentication for mutual fund subscription transactions

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In order to further safeguard interest of investors, capital markets regulator Sebi on Friday decided to extend the two-factor authentication for subscription transactions in units of mutual funds.

The new framework will come into effect from April 1, 2023, the Securities and Exchange Board of India (Sebi) said in a circular.

“It has now been decided to extend the Two-Factor Authentication for subscription transactions in the units of mutual funds as well,” Sebi said.

Also read: US Stocks: Futures edge higher ahead of key inflation data

In case of subscription and redemption of units, two-factor authentication (for online transactions) and signature method (for offline transactions) will be used for authentication.

One of the factors for such authentication for non-demat transactions will be a one-time password sent to the unit holder at his/her email or phone number registered with the AMC.

In case of demat transactions, the process of two-factor authentication as laid down by the depositories will be followed.

Sebi has clarified that in case of systematic transactions, the requirement of such authentication will be applicable only at the time of registration.

Technical stocks to buy: Tata Power, UBL show further rally on charts; check Nifty support, resistance levels

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By Shrikant Chouhan

Tuesday was a volatile trading day. If we calculate the intraday variation, the Nifty/Sensex moved up and down by 750/2200 points. On a daily basis, the market has formed an indecisive pattern and based on that upward activity is not ruled out. On that basis, levels of 14790/49600 and 14820/49700 will be important. If the level of 14820/49700 is decisively crossed, the Nifty/Sensex can jump up to 14950/50100. If it goes below 14540/48800, then the Nifty could drop to 14450/48550 and 14350/48350 levels. Wednesday is an important day for the market and a level based trading approach should be followed. For the Bank-Nifty, 32250 and 32700 should be the trading range. Expect trending activity above and below the given levels. Be stock specific in the market.

BUY, CMP: Rs 104.7, TARGET: Rs 111, SL: Rs 101

The stock had shown a phenomenal up move from the levels of 70 till 114 without any significant correction however 114 becomes the obstacle due to double top kind of a formation which resulted in a price drop, nevertheless recent range bound movement with incremental volume points at good accumulation by bulls for the continuation of an uptrend.

Pidilite Industries

BUY, CMP: Rs 1,874.4, TARGET: Rs 1,970, SL: Rs 1,830

In the past last three months, the stock was trading in a rectangle formation forming a strong base for the counter, subsequently, a fresh breakout with a strong bullish candlestick pattern along with pick up in volume indicates a new leg of upward movement in the near term.

Cadila Healthcare

BUY, CMP: Rs 456.5, TARGET: Rs 480, SL: Rs 445

On the weekly scale, the stock was into a sloping channel after making the highs of around 500, eventually, its downward move stopped near the multiple support zone of 420 and the strong rebound is seen in the counter with an increase in volume activity, recent trend line breakout confirms bullish momentum to remain in the coming time horizon.

United Breweries Ltd

BUY, CMP: Rs 1,109.95, TARGET: Rs 1,170, SL: Rs 1,070

After the remarkable up move from the levels of 900 till 1320, the stock faced multiple resistance into the supply zone of 1300-1320. As a result, we observed a substantial drop in the share price. Nevertheless, it seems that the worst is behind as the stock is near to its important Fibonacci retracement zone. Hence we expect a strong up move from current levels.

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