Month: February 2024

SBI, BPCL, Hero MotoCorp among stocks to buy, technical charts suggest Nifty may ride towards 14,800

Posted on by

By Shrikant Chouhan

The market continued to remain positive for the second day in a row. On Tuesday, once again the benchmark index — Nifty/Sensex opened with a strong gap and quickly surpassed 14550/ 48600 mark, which is a short term resistance level. The important point is, the market not only crossed the resistance mark but even traded above 14550/ 48600 levels which is grossly positive for the Nifty /Sensex. Modest broader market participation and strong performance from Metal, PSU Banks and selective financial stocks helped trades to maintain a long stance over short.

Havells India BUY, CMP: Rs 1,028.5, TARGET: Rs 1,080, SL: Rs 1,005

Post decline from the levels of 1231 the stock went into a range-bound movement where a strong bullish activity is spotted near the multiple support zone. Additionally, the formation of a bullish Marubozu candlestick pattern with a good volume suggests a strong up move in the counter.

Hero MotoCorp BUY, CMP: Rs 2,905.5, TARGET: Rs 3,050, SL: Rs 2,840

For the last two months, the stock has drifted downside after hitting the double top chart pattern at around 3620, and thereafter it entered into an accumulation phase near its important support area, finally, a strong reversal candlestick formation indicates the resumption of a bullish uptrend in the coming horizon.

Bharat Petroleum Corporation Ltd (BPCL)BUY, CMP: Rs 420.35, TARGET: Rs 445, SL: Rs 410

The stock has created a good demand base at 400-410 levels, and the recent formation of the Cup and Handle chart pattern on the daily time frame chart indicates bullish movement in the near term is very likely to persist.

State Bank of India (SBI) BUY, CMP: Rs 353.05, TARGET: Rs 370, SL: Rs 345

Post decline SBI formed a Rounding bottom chart pattern near its important retracement zone on the daily chart and the stock has reversed sharply by filling the bearish gap with a strong bullish candle therefore uptrend is expected to continue in the near term.

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

Nifty has to cross 15,350 to resume bullish trend; ICICI Bank, Tata Motors among 4 technical stocks to buy

Posted on by

By Shrikant Chouhan

On Tuesday, Indian equity benchmark index turned volatile after the specific announcement on the Loan Moratorium from the Supreme Court. It has helped the Bank Nifty to recover from the lower levels. The formation of a double bottom at 33350 in the Bank Nifty worked positively. Most stocks are at their large support area. Some stocks have formed a bullish reversal pattern today. For example, Axis Bank, ICICI Bank and SBIN are at support levels and have formed reversal formations. In the next few days, we will see an upward activity in the Bank Nifty. Furthermore, if you look at the yield on long-term bonds, it is also declining. The Bank Nifty is expected to move closer to 35,000. Maintain a stop loss of 33850. On a daily chart the 50-day moving average was a major hurdle for the market and is positive for the medium-term trend of the market.

Technical stock picks are:

Aurobindo Pharma

BUY, CMP: Rs 846.15, TARGET: Rs 890, SL: Rs 825

Post correction from the highs of around 1000 which had been the supply zone for the stock, it went into a sloping channel formation, ultimately with incremental volume activity the stock formed double bottom chart pattern and retreated from the lower levels for fresh leg of uptrend.

ICICI Bank

BUY, CMP: Rs 511.1, TARGET: Rs 535, SL: Rs 500

On the weekly scale, the stock has formed bullish continuation chart pattern however from last few weeks some corrective formations were spotted due to weakness in broader market but eventually the stock have found support at its important Fibonacci retracement area with modest volume action indicating rebound in the near term.

Tata Motors

BUY, CMP: Rs 307.4, TARGET: Rs 325, SL: Rs 299

The stock has presented a robust rally from lows of 100 to 350 in six months’ time frame, and on monthly scale the trend of the stock is still in to the upward direction. It has formed higher high and higher low chart pattern. However the recent price correction has led the stock to form a double bottom near its bullish gap zone hence we expect revival of upward movement from the important support zone in the coming time horizon.

Birla Corporation Ltd

BUY, CMP: Rs 849.4, TARGET: Rs 890, SL: Rs 830

Post recent run up from 700 to 900 the stock entered into the distribution phase and corrected a bit to its support zone. However, on the daily chart the stock has formed higher bottom series formation with strong bullish candlestick pattern along with positive SAR series which can lift the stock to its previous highs hence we expect bullish momentum in stock likely to continue in the near term.

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

The Road India and Pakistan took

Posted on by

By Farooq Wani

It’s no secret that today Pakistan is overwhelmed by a host of extremely serious adverse security, economic and political issues that are showing no signs of receding and due to this unprecedented crisis, it continues plummeting towards disarray and a possible implosion. Though this self-created catastrophe has impacted the entire country, due to Islamabad’s discriminatory policies, PoK remains one the worst affected areas.

Moreover, unlike Islamabad which continues to neglect PoK, New Delhi has placed development of J&K on high priority by taking the decisive step of abrogating Articles 370 and 35-A, which legally denied Kashmiris the opportunity to benefit from government schemes and initiatives meant for improving quality of life for the masses.

By bifurcating the erstwhile state of J&K into two separate union territories the center has been able to ensure undivided focus on building up political as well as socio-economic stability that had been upset due to years and decades of strife on account of Pakistan sponsored terrorism.

Drawing a comparison of what drives or derails developments in these two major nations of South Asia today makes for interesting reading. So, let’s take up Pakistan first.

Two recent interviews – one of Pakistan Tehreek-e-Insaaf (PTI) leader and former minister Sheikh Rashid, and the other of former three-time Prime Minister, Mohammad Nawaz Sharif brings home the sad truth about a nation that is in steep socio-economic decline and beholden. This problem has always been there since the mid-1950s, primarily as Pakistan’s all-powerful army has always been dictating both the country’s foreign and domestic policy.

Sheikh Rashid, who has been an outspoken supporter of PTI founder and former cricketer Imran Khan said this week that Khan made a big mistake in getting on the wrong side of the Army, which for all practical purposes is a “State within a State” in Pakistan.

“I believe Imran Khan and the PTI made a big mistake in objecting to the selection of Lt. Gen Asif Munir as the next Chief of Army Staff of Pakistan. We (PTI) should never have interfered as this is the prerogative of the Pakistan Army establishment to decide who their next chief will be,” said Rashid.

“Who is senior, who is not senior, what are the problems within the Pakistan Army, if any, should never have been Imran Khan or the PTI’s concern. We should have stayed clear of this,” he added.

This statement points again to the omnipotent influence of the Army in Pakistan’s politics on the one hand, and on the other, reveals the existence of well concealed “dirty laundry” within the armed forces establishment.

Exploiting the weaknesses in the country’s civilian and administrative establishment, the army has time and again been very successful in consolidating its position as “a parallel political and economic power operating without any civilian oversight.”

Take the case of former COAS, Gen. Qamar Javed Bajwa (Retired). Before hanging up his boots in November 2022, media in Pakistan claimed that his family and he managed to become billionaires. One report by Fact Focus claimed that Gen. Bajwa and his family managed to increase their wealth to 12.7 billion Pakistani Rupees (approximately USD 47 million).

He has since been replaced by Gen Munir, who within a short span of eleven months has ensured the collapse and exit of the Imran Khan-led PTI government. This has given a fresh political lease to the Nawaz Sharif/Shehbaz Sharif-led Pakistan Muslim League-N (PML-N), and managed to allegedly implicate Imran Khan in a series of criminal and corruption-related cases with the help of a compliant judiciary and political establishment. By reshuffling the army top brass to suit his needs, Gen Munir has secured his position as the most powerful man in Pakistan.

Unfortunately, just like his predecessors, Gen Munir has not succeeded in ridding the all-powerful Pakistan Army of corruption. Reports appearing in the public domain reveal that the Pakistan armed forces establishment is also a huge business conglomerate earning over USD 26.5 billion annually. It is a conglomerate run under and by many names such as the Askari Foundation, the Fauji Foundation (Pakistan Army), the Shaheen Foundation (Pakistan Air Force), the Bahria Foundation (Pakistan Navy), the Army Welfare Trust, the Defence Housing Authority.

The stated objective of these organisations is to ensure the wellbeing of armed forces personnel and their families. But it’s a well-known fact that the bulk of beneficiaries are senior officers, who also get many other substantial post-retirement benefits.

The armed forces are involved in almost every field of the Pakistan economy, ranging from real estate, fertilisers, cement manufacturing, wind and solar energy etc. Over a dozen public sector units are controlled by the armed forces as well, which leads one to wonder whether the Pakistan army leadership is seriously involved in their primary task of defending their country’s borders or in running commercial enterprises?

According to new report , “The Officer Corps puts forward a narrative to legitimise their economic ventures and conceal their predatory, kleptocratic behavior”. The army’s Inter-Services Public Relations (ISPR) is its propaganda machine in the truest sense, that projects “an image of the army as the only institution with the will or capacity to protect Pakistan.”

The other significant development is the return of three-time former Prime Minister Nawaz Sharif to Pakistan after a gap of four years of self-imposed exile. At 73, he seems ready to make a political comeback in January 2024, and has already ruffled feathers of the army and radicals by calling for better relations with India, and maintaining that Islamabad cannot afford to remain isolated from New Delhi interminably.

In a PML-N rally in Lahore soon after his arrival on Pakistani soil, Sharif said “Pakistan has to try and stand on its feet again. Our honour and prestige as a nation is at stake and we need to rejuvenate it. We have to end unemployment and poverty in Pakistan. We need to think of better policy making. We need to rebuild our connections with our neighbours (read as India) and the world. We cannot be at loggerheads with our neighbours and have good relations with the rest of the world. We have to have good relations with all, and to resolve the issue of Kashmir, we need to move forward with a fresh mind and good planning….”

Does Sharif’s return bode well for Pakistan, for its people, or its economy remains a million dollar question yet to be answered. The people of Pakistan will need a lot of convincing to believe so, knowing that in the past he, his family and the PML-N have been involved in rampant corruption.

The PML-N hopes Sharif can still use his political clout and his “man of the soil” identity to revive the party’s flagging popularity in the midst of socio-economic free fall. For now, he has been granted protective bail till October 24 by the Islamabad High Court, removing the threat of him being arrested.

Let’s now review India’s standing in South Asia. In contrast to Pakistan, India is marching forward with vigour. It has grown at an average annual pace of 6.6 percent in the last decade. In 2022-23, it had a growth rate of 7.2 percent and it has outperformed most other major economies, including China. The International Monetary Fund (IMF) has predicted that India will continue to grow by over six percent in the next few years and is on track to be the world’s third largest economy. All of its socio-economic indices for and on development point it out as an emerging and promising market for the rest of the world.

Pakistan in contrast has a deflating Inflation of 21.3 percent, the highest since December 2008 when inflation stood at 23.3 percent. It has to service a loan of USD 2.3 billion taken from a Chinese consortium of banks; floods have caused economic losses of over USD 30 billion dollars and at the end of September this year, its foreign currency reserves stood at an abysmal USD 13.079 billion, which was a slight improvement over USD 10 billion that it had in the week ending September 8. Last December, it was at an almost four-year low of USD 6.7 billion. It has foreign exchange reserves equal to just five weeks of merchandise imports.

With Islamabad continuing to depend on foreign borrowing to stay afloat and the army refusing to cut down on its lavish defence expenditure, the Pakistani rupee is consistently depreciating due to which the country will stay in a state of deep economic crisis for quite some more time.

The author is Editor Brighter Kashmir, Author, TV commentator, political analyst and columnist. Email: [email protected]

Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.

One 97 Communications Ltd Rating: Overweight | Margin improvement in payment business

Posted on by

We hosted PayTM at our Financials tour 2022. PayTM is undergoing a model shift from chasing “growth at any loss” to “profitability at scale”. The company maintained its guidance of Adj. Ebitda profitability by Sep-23 – which we believe most investors remain skeptical of —rightly so given the sharp increase in indirect expenses since listing, negating gains in contribution margin (CM) since last year. Moderation in indirect expenses Q2 onwards should hence be a catalyst. On the other hand, contribution margin should enjoy incremental tailwinds from (i) incentive income from below-normal loss rates in syndicated loans, (ii) scale-up of co-brand credit card issuances, and (iii) potential UPI P2M (person to merchant) subsidy. We estimate incremental CM of 60% – well above 43% in Q1F23- suggesting scope for more improvement. Q2 earnings print on loss reduction rate will be a key catalyst.

Paytm’s annualised loan disbursement run-rate stands at ~Rs 290 bn as of Aug-22 and its penetration stands at 4% and <0.5% of MTU for postpaid and personal loans respectively and 4% of device merchants for merchant loans (as at Jun-22). The company sees a long runway for growth in the segment driven by potential for (i) growth in its MTU (79mn as of Aug-22; +40% y/y) and device merchant (4.5mn as of Aug-22 – guided to add ~1mn per quarter) base, and (ii) increasing penetration among the base. The company also noted that its portfolio credit losses are running below levels underwritten by financing partners, which can additionally drive scope for incentive income on its syndicated loan book.

Paytm has been improving the margins of its payments business driven by (i) scale-up of merchant devices (driving rental revenue; ~12-15 month payback on its signature Soundbox device) and (ii) rationalising processing costs. Further tailwinds to margins exist from potential UPI P2M monetisation either from MDR introduction (unlikely) or from increased subsidies from the government to support network investments. UPI’s P2M becoming monetizable via government rebate is a major mid-term positive for payment economics.

Fintech’s funding winter should reduce competitive intensity – Competitive intensity could moderate in the payments/digital lending space from fintechs given the tightening of funding and regulatory hold in the sector. In our view, this could benefit Paytm as it is well funded to drive expansion and has also highlighted that it is compliant with the digital lending regulatory guidelines, which we think can clear the regulatory overhang on the FS part of its business model.We expect PAYTM to see strong revenue growth across all its business segments thanks to device monetisation in payments, financial services cross-selling, ticketing recovery and rising ad monetisation.

Wall Street falls as Fed, Ford forecasts, give fright

Posted on by

Wall Street ended Tuesday lower as the eve of a U.S. Federal Reserve meeting expected to bring another large interest rate hike brought further evidence of the impact on corporate America from the inflation that the U.S. central bank wants to tame. The benchmark S&P 500 index has dropped 19.1% so far this year as investors fear aggressive policy tightening measures by the Fed could tip the U.S. economy into a recession. It closed for the third straight session below 3,900 points – a level considered by technical analysts as a strong support for the index – as last week’s dire outlook from delivery firm FedEx Corp was repeated, this time by automaker Ford Motor Co.

Shares of Ford slumped 12.3%, the biggest one-day drop since 2011, after it flagged a bigger-than-expected $1 billion hit from inflation and pushed delivery of some vehicles to the fourth quarter due to parts shortages. Rival General Motors Co also sank 5.6%. “We have seen some bellwethers talk about the pressures they are facing, so we could see some margin compression and some softening in the topline numbers in the third-quarter earnings,” said Greg Boutle, head of U.S. equity & derivative strategy at BNP Paribas.

The U.S. central bank is widely expected to hike rates by 75 basis points for the third straight time at the end of its policy meeting on Wednesday, with markets also pricing in a 17% chance of a 100 bps increase and predicting the terminal rate at 4.49% by March 2023. Focus will also be on the updated economic projections and dot plot estimates for cues on policymakers’ sense of the endpoint for rates and the outlooks for unemployment, inflation and economic growth. Adding to the mix, a Commerce Department report showed residential building permits – among the more forward-looking housing indicators – slid by 10% to 1.517 million units, the lowest level since June 2020.

The benchmark U.S. 10-year Treasury yield hit 3.56%, its highest level since April 2011, while the closely watched yield curve between two-year and 10-year notes inverted further. An inversion in this part of the yield curve is viewed as a reliable indicator that a recession will follow in one to two years. “There are a lot of headwinds to prevent sustained rallies. It’s hard to have (price-to-earnings) expansion while the Fed is tightening,” said BNP’s Boutle. The Dow Jones Industrial Average fell 313.45 points, or 1.01%, to 30,706.23, the S&P 500 lost 43.96 points, or 1.13%, to 3,855.93 and the Nasdaq Composite dropped 109.97 points, or 0.95%, to 11,425.05.

All of the 11 major S&P sectors declined, with economy-sensitive real estate and materials sectors the biggest fallers, dropping 2.6% and 1.9% respectively. Meanwhile, in another sign of nerves around future corporate earnings, Nike Inc fell 4.5% after the sportswear giant was downgraded by Barclays analysts to “equal weight” from “overweight”, citing volatility in the Chinese market due to pressures from COVID-related lockdowns in early September. Another apparel maker, Gap Inc, closed 3.3% lower. It announced on Tuesday it was eliminating about 500 corporate jobs, having withdrawn its annual forecasts late last month due to an inventory glut and weak sales.

Also Read: ACC, Ambuja Cements, Adani Group, Wipro, Hero MotoCorp, Tata Steel, Central Bank of India stocks in focus

Volume on U.S. exchanges was 9.90 billion shares, compared with the 10.71 billion average for the full session over the last 20 trading days. The S&P 500 posted two new 52-week highs and 66 new lows; the Nasdaq Composite recorded 31 new highs and 408 new lows.

ASK Group is shaping up like Blackstone

Posted on by

Blackstone-backed ASK Group recently announced a foray into the hedge funds and private credit businesses saying it plans to grow its assets to $5 billion in the next four to five years. Sunil Rohokale, MD and chief executive at ASK Group talks to Raghavendra Kamath about the Group’s strategy.

Several global and domestic fund managers are getting into private credit, isn’t this space getting overcrowded?

What was the idea behind getting into hedge funds?

“Long short “funds are an investment style to generate risk- adjusted returns for investors. ASK has traditionally been a “long only” investment manager and to complement this, we are getting into “long short” funds. It is also a diversification of investment portfolio for our long only investors as a long -short fund, amongst other things, also offers the advantage of hedging against a changing market environment and other trends leading to increased volatility.

How has Blackstone’s entry as a majority owner helped ASK scale up the business?

Blackstone as we know is the world’s largest private equity investor with 0ne trillion dollar AUM and its diversified into performing credit , hedge funds, real estate and Private equity. ASK is also shaping up in that direction. Backed by Blackstone, we are scaling up in public equities, real estate funds and venturing into credit funds and long short funds.

The Blackstone brand is giving additional fillip to ASK to access the large investor base both onshore and offshore markets. You get a different welcome when you go to investors now and it will help us significantly increase our AUM in the next three to five years.Blackstone did help us diversify into credit fund , long short funds after we strategized with them. Once our credit fund and hedge fund business stabilise, we may look at PE, in the mid-market space.

What happened to your plans for the mutual funds business?

Since Blackstone is a majority owner, we have an option to pursue brownfield opportunity. We want to acquire a mutual fund company rather than wait for 10 years to build it. In the last two years we explored the buyouts of two mid-sized and established mutual funds. One, we felt was an expensive deal and during the other we were undergoing a corporate action so we could not participate.

Where are Ultra HNIs and HNIs are investing today ?

About 65% of their money went is invested in public equities. Their interest in market- linked debentures and fixed income instruments has diminished after the tax incentives were taken away. Now they are allocating more to private credit, real estate, REITs and InVITs apart from their continued interest in public equities.

What are your plans for real estate funds ?

We have raised Rs 1500 crore in April this year and will deploy about 90% by March 2024. We received an approval for a fund of similar quantum a month ago and plan to raise approximately Rs 1,000 crore by March 2024 and close the fund in the next 12 months.

Using AI to filter stocks; here’s what Upside AI’s algorithm is indicating for stock markets ahead

Posted on by

The pandemic has made humans more dependent on technology, be it for working, shopping and now even for investing. Upside AI — a SEBI registered Portfolio Management Service (PMS) is among the first funds in India to use machine learning to make fundamental investment decisions. The technology-focused fund believes that the next Warren Buffett would be Artificial Intelligence. Kanika Agarrwal, Co-founder and Chief Investment Officer, Upside AI in interaction with Kshitij Bhargava of Financial Express Online, discussed how their algorithm works and what it believes is in store for stock markets next. Here are the edited excerpts.

You use an exciting mechanism to gauge the market, what does it say about the current market situation and where is it expected to go in the coming future?

Therefore, the decision any investor must make is two-fold – 

(1) Am I comfortable with my equity allocation?

(2) Given the market conditions today, what are good stocks to hold?    

Given that we are an equity investor, the first question is answered. Hence, we are mainly answering the second question – “what will the market think is a good company next quarter”.   

At the moment, based on our analysis of current market conditions, our multi cap portfolio is weighted towards small caps and value stocks. 

We have heard arguments in favour of a bottom-up approach when going stock shopping now; do you believe in that approach? How would you go by doing that?

We are a primarily bottom-up shop. So far, technology has been used in high frequency, technical analysis, etc in India. However, bottom-up, fundamental analysis has been the domain of human managers.

If you analyse long term data, you will see that humans by and large perform similar to the index as humans are driven by emotion and prone to make suboptimal decisions.

Therefore, we are trying to solve investing (not trading) by using machine learning. The idea is to feed in financial numbers of companies and let the machine determine what it means to be “fundamentally good” in current market conditions. As markets are constantly evolving, the meaning of “good stocks” also changes – some periods, PE does not matter as much as growth, in others the debt is far more important. Of course, we do a layer of corporate governance checks to capture data the machine cannot about the quality of the numbers.

Technology has been an enabler more so than ever in this decade, Upside AI is a product of that, but is there more upside potential in IT stock from here?

You will find a lot of sectors clocking that have done well since March. For IT specifically, the long-term story of the disproportionate role technology will play in our lives remains the same. Therefore, IT as a sector will be a good buy intuitively (just like, say consumer stocks). The question we must answer is what is a good stock at current prices? 

Therefore, the call we are taking is more company fundamental specific and not so much at the sector level. Who is the disruptor and who is the disrupted? Kodak invented the digital camera in 1975 – and then buried it because it would cannibalise its existing business. Kodak went bankrupt in 2012.

We were big believers of the IT theme before the rally started, right from Jan-20 onwards. Within our top 250 product, we bought Mindtree, HCL Tech and Tech Mahindra. All three have done very well for us – Mindtree has nearly doubled this year. As we go into the new year, we will maintain a 20% allocation to IT. 

Is it time to go hunting small caps and midcaps in the coming quarter? What does your algorithm lean towards?

This is a broader asset allocation call which depends on your risk appetite and wealth distribution. We are big believers of the mid/ small cap story and have focused on them over the last 18 months. 

Our Multicap product ends up heavily weighting mid/ small caps. If you are planning to buy small caps in the next quarter, you should be averaging and buying all year – it is more a function of allocation than an opportunity. 

Value or growth investing what would you go for?

The main reason we built our products is that no one thing works consistently anymore. A value/ growth/ IT/ pharma investor will do well only in a small snapshot of time and then revert to mean. Therefore, machine learning allows us to let markets guide the type of investor we should be that quarter and dynamically change, quickly and consistently.  

What sectors are you preferring from here on as we march towards the ‘old normal’?

We currently own some metals, pharma, textiles and consumer stocks. The portfolio is straddling defensive and cyclical sectors. 

Will bulls manage to pull Nifty above 17200 amid uncertainty? 5 things to know before market opening bell

Posted on by

Indian benchmark indices are expected to start the week and month in the red amid weak global cues. Wall Street tumbled on Friday and Asian markets too opened with losses on Monday. SGX Nifty was in red, hinting at a negative start for the Indian share market. In the previous session, BSE Sensex and NSE Nifty had snapped out of the red streak to end with gains. The Nifty trend and outlook is now neutral to positive in daily, weekly, and monthly charts, implying a balanced risk-reward, according to market analysts. The momentum has strengthened further, indicating a high probability of a trend or outlook change in this week. The preferred strategy for this week remains ‘sell the rise’ they added.

Also Read: Share Market LIVE: Nifty, Sensex stare at negative start on weak global cues; govt cuts windfall tax on crude

Global Markets: Shares in the Asia-Pacific fell on Monday as markets enter the last quarter of the year. Hong Kong’s Hang Seng index was 0.8% lower in early trade. Japan’s Nikkei 225 fell more than 1% in early trade, but recovered slightly and was last up 0.18%, while the Topix index was fractionally lower. China markets are closed for the Golden Week holiday, and South Korea’s market is also closed. Meanwhile, US stocks fell in choppy trading Friday as Wall Street closed out a terrible week, month, and quarter that brought the S&P 500 to a new 2022 low. For September, the Dow tumbled 8.8%, while the S&P 500 fell 9.3%. The Nasdaq lost 10.5%.

Nifty Technical view: Nifty on the weekly chart formed a small negative candle with long lower shadow. Such weekly chart pattern after a reasonable decline calls for bottom reversal for the market. The short term trend of Nifty has turned into positive. The placement of important support and the overall chart pattern of daily and weekly signal a crucial bottom reversal at 16747 levels, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Levels to watch for: “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 17292 and 17540 being the upside targets. The lack of breakout volumes on Sept 30 is a minor worry. 16752-16794 band could provide support,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

Stocks under F&O ban on NSE: The National Stock Exchange has not added any stock under its F&O ban list for October 3.

Also Read: Reliance, Suzlon Energy, Bharti Airtel, Zydus Lifesciences, Poonawalla Fincorp, APL Apollo stocks in focus

FII and DII data: Foreign institutional investors (FIIs) net sold equities worth Rs 1,565.31 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 3,245.45 crore on September 30, according to the provisional data available with NSE.

Govt imposes 20% export duty on non-basmati rice shipments, to hit overall rice exports in current fiscal

Posted on by

The government on Thursday imposed a 20% export duty on non-basmati ‘white’ rice exports which is expected to hit overall volume of exports in the current fiscal.

According to a finance ministry notification, the export tax will be applicable from Friday.

Also Read: Govt sets 2022-23 grain production target at 328 mt, up 4% on year

“Our concern is whether this export duty will be applicable to around 2 mt white rice consignment in the transit,” V Krishna Rao, president, All India Rice Exporters Association, told FE.

Rao said imposition of export tax will definitely reduce the volume of rice export this fiscal and make rice from India costlier.

Currently, India is exporting non-basmati rice at around $360 a tonne.

The finance ministry also imposed a 20% export duty on rice in husk (paddy)and husked brown rice.

India has been the world’s largest rice exporter in the last decade — export earnings stood at $8.8 billion in 2020-21 and $9.6 billion in 2021-22.

According to the commerce ministry data, India’s value of rice exports rose 12% to $2.6 billion in the first quarter of the current fiscal compared to previous year.

“It will make the exports costlier thereby ensuring affordability of rice to the common masses,” Saurab Agarwal, tax partner, EY said. Because of 5% decline in paddy sowing this kharif season because of deficient rainfall in key paddy growing areas of West Bengall, Uttar Pradesh, Jharkhand and Bihar, rice production is expected to decline 2022-23 crop year (July-June) from a record 130 mt achieved in 2021-22 crop year.

The United States department of agriculture (USDA) in its rice outlook for August had stated that India’s rice exports are projected to increase to a record 22 MT in 2022-23. USDA has projected that country’s projected exports exceed the combined shipments of the next three-largest exporters — Thailand, Vietnam and Pakistan.

Out of the 21 mt of rice shipment in 2021-22, India exported more than 17 mt of non-basmati rice and the rest of the volume was aromatic and long grain Basmati rice. In terms of volume, Bangladesh, China, Benin and Nepal are five major export destinations of rice.

Eicher Motors, L&T Info: Stocks to buy for next 1 month; check support, resistance as Nifty continues to surge

Posted on by

By Subash Gangadharan

Markets have bounced back smartly after the sharp fall seen on 26th February 2021. The Nifty found support at the 50 day SMA and has gradually climbed higher over the last two weeks.

The below picks are for the next 15-26 trading sessions

Buy Larsen & Toubro Infotech (LTI)

After correcting from a high of 4483 touched in January 2021, LTI found support around the 3570 levels in February 2021. These levels also coincide with the 20 week SMA, making it a strong support.

The stock has since then rebounded and gradually made higher tops and higher bottoms over the last two weeks. On Wednesday, the stock broke out of its recent swing highs of 4015 on the back of huge volumes, indicating that the uptrend looks set to continue.

indicators are giving positive signals as the stock is trading above the 20 and 50 day SMA and short term momentum indicators like the 14-day RSI are in rising mode and not overbought.

With the intermediate and long term technical setups too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy betweenthe 4080-4142 levels. CMP is 4138.5. Stop loss is at 3900 while targets are at 4650.

Buy Eicher Motors

Eicher Motors has recently corrected from a high of 3037 tested in January 2021. The stock found support at the 2450 levels before bouncing back in the last two weeks and consolidating in a range.

On Wednesday, the stock broke out of a narrow range on the back of above average volumes. This augurs well for the uptrend to continue.

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

With the short term and intermediate technical setups looking attractive, we expect the stock to gradually move higher in the coming weeks. We therefore recommend a Buy between the 2650-2680 levels. CMP is 2673.9. Stop loss is at 2570 while targets are at 2900.

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