Hindustan Unilever vs Nestle India; Nestle to outperform HUL in long term

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We believe Nestle may potentially outperform HUL in long term driven by multiple favourable factors (both extrinsic and intrinsic). In Nestle, we like penetration-led volume growth on the back of rural expansion among peers. There is lower threat from D2C (direct-to-consumer) brands given the inherent challenges in scaling up in Foods category. There is opportunity to bring more from global portfolio in true long term.

Nestle India has relatively lower salience from rural areas (20%; one of the lowest in our coverage) compared to HUL which has been a pioneer in driving penetration-led growth in rural areas through smaller packs and brand architecture. We note that rural regions are one of the large drivers of volumes for most of the FMCG companies.

We believe Nestle through its strategy will likely drive rural penetration for its products leading to volume growth.

HUL on the other hand has been a pioneer over the last few years in driving penetration-led volume growth through its LUP ( low unit packs) strategy and multi-brand architecture. We believe HUL will likely have premiumisation led growth as it has already achieved high penetration for some of its products, and (material) growth going forward will be through upgrading consumer to a premium brand. However, HUL will also likely continue to gain penetration-led growth as consumer shift away from unorganised segment, we believe that benefit will be lower for HUL compared to Nestle India.

Nestle India is present in food categories while HUL is present in home care, beauty and personal care (BPC) and foods. We believe, D2C brands have higher presence in BPC categories compared to food categories.

Nestle India currently operates in 4 categories out of 7 categories where Nestle SA (parent company) is present. Therefore, Nestle India does not need to look for inorganic opportunities as it can always get some of the brands from the parent to India as and when Nestle feels that there is opportunity in that particular category.

On the other hand, HUL is largely present in the (relevant) categories where Unilever (parent company) is present. Also, HUL has been active in acquiring companies in India in categories like health food drinks (GSK Consumer – Horlicks, Boost etc.), Ice Creams (Aditya Milk), Ayurvedic Hair Oil (Indulekha), Female Hygiene (VWash) etc.

Nestle India has one of the lowest salience of rural revenues amongst its peers. It is continuously expanding reach into smaller cities and rural areas. It has a target to expand into ~120,000 villages by CY24. We value stocks on DCF except Adani Wilmar, Godrej Cons. and Tata Cons. which we value on SoTP basis. Key upside risk is better-than-expected gross margins due to correction in input prices. Key downside risk is unexpected irrational competition due to deceleration in general consumption demand.

Gold Price Today, 16 Sep 2022: MCX gold at multi-year low, may trade sideways to down; US Fed policy eyed

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices were trading weak in India on Friday, on the back of muted global cues. On Multi Commodity Exchange, gold October futures were trading Rs 76 or 0.2 per cent down at 49,236 per 10 gram as against the previous close of Rs 49,312. Silver December futures were ruling Rs 198 or 0.4 per cent down at Rs 56,219 per kg.  Globally, yellow metal prices hovered near a two-year low on Friday and were set for a weekly fall as an elevated dollar and prospects of aggressive U.S. rate hikes dented bullion’s appeal, according to Reuters. Spot gold was unchanged at $1,664.48 per ounce, and was down 3% for the week so far. Prices hit its lowest since April 2020 at $1,659.47 on Thursday. U.S. gold futures were down 0.3% at $1,673.10.

Also read: Rupee likely to remain steady amid strong dollar, risk aversion in markets; USDINR pair to trade sideways

MCX gold drops to multi year low amid panic over rate hikes. Focus has shifted to the Fed policy which is scheduled next week. The dollar has reached 109.5 levels and looks strong. MCX October future has a room for further downside until 49,100 per 10 gram. Hence we recommend short on rise.

Tapan Patel, Senior Analyst — Commodities, HDFC Securities

Gold prices traded weak on Friday with spot gold prices at COMEX were trading near $1663 per ounce in the morning trade. MCX Gold October futures opened lower near Rs. 49224 per 10 gram in line with fall in COMEX gold prices. The yellow metal extended losses on hawkish FED on larger rate hike expectations. The stronger dollar index also weighed on investment sentiments in gold. We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1650 and resistance at $1690 per ounce. MCX Gold October support lies at Rs. 48900 and resistance at Rs. 49800 per 10 gram.

Also read: Petrol, Diesel Price Today, 16 Sep 2022: Fuel cost static; check rates in Delhi, Noida, Mumbai, other cities

Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One

Interest rate hikes increase the opportunity cost of owning non-yielding metal, despite the fact that gold is seen as a safe investment during economic turmoil. The recent increase in the US dollar index, rising US Treasury yields, and the hike in U.S. inflation figures have all worked together to keep gold buyers largely inactive. Following the Fed’s policy meeting next week, the markets have fully priced in an interest rate increase of at least 75 basis points, and maybe even up to 100 basis points. We expect gold to trade lower towards 48870 levels, a break of which could prompt the price to move lower to 48450 levels.

(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.)

Rupee likely to consolidate in near-term, may fall to 83 level, if 82 breached amid global uncertainty

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By Dilip Parmar

King dollar flattening everything right now, causing issues for everywhere and everyone except America. Printing dollars over the years has given the US “exorbitant privilege” and it is “our currency and your problem” (to quote President Richard Nixon’s treasury secretary, John Connally). That means that for now at least, it’s not America’s problem and the surge in the greenback is unlikely to end soon. The US dollar is stronger than ever and pierced to two decades high. With the risk of economic damage spreading from Tokyo to London, they have been drawn into the fight to prop up their currencies. Globally central banks adopted the idea of a coordinated monetary tightening path to control inflation. Federal Reserve Chair Powell’s only focus is to fight against inflation at home and to achieve a pivot at the earliest to supercharge the king dollar. 

High-interest rates and the comfort of feeling safer money in dollar assets are helping the greenback. At first sight, the country welcomes a weaker currency against exporting currency which tends to stimulate growth by making export more competitive while nations likely India whose trades are imbalanced feel the heat of higher inflation and lower exports. The weaker currency makes the import costlier while fear of recession reduces the exports. While from the US Fed’s perspective, a stronger dollar actually helps fight inflation as it allows cheap imports but curbs growth.

Curtailing inflation, the Federal Reserve has raised its benchmark interest rate from near zero to above 3% in record time. And at its most recent meeting, on Sept.21, the central bank projected it would add an additional one and a half percentage points in the coming months-promptly sending risk markets into a nosedive, short-term bond yields and the haven dollar to a multi-year high.

A weaker currency is forcing RBI to be with the curve and increasing interest rates and intervening by selling the dollar, which risks driving economies into slower growth. India’s central bank raised the repurchase rate by 50 basis points to 5.90%. The RBI trimmed the economic growth outlook for the financial year ending March to 7% while retaining its 6.7% forecast for inflation. Retaining the “withdrawal of accommodation” stance clearly indicates that policy rates have not yet peaked and a 35 bps hike in December and a quarter point move in February. 

Also Read: Petrol, Diesel Price Today, 3 Oct 2022: Fuel cost static; check rates in Delhi, Mumbai, Noida, other cities

Looking at the global uncertainty and tighter liquidity, the rupee is expected to trade left in the medium term while in the shorter term it could consolidate in the range. Spot USDINR is having a line on sand at 82 and crossing of it will pave way for 83 and more while on the lower side

80.70 acts as a support line.

(Dilip Parmar, Research Analyst, HDFC Securities. Views expressed are the author’s own.)

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

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The government on Wednesday set a food grain production target of 328 million tonne (mt) for the 2022-23 crop year (July-June) which is 4% more than a record foodgrain output of 315.7 mt in the previous year.

Out of the total grain production, rabi crops such as wheat, mustard and chana (gram) would contribute 164.8 mt in 2022-23 crop year. Rabi crops are sown in the winter months of December-January and harvested from April onwards.

“The strategies would be to enhance area through inter-cropping, crop diversification, and productivity enhancement by introducing high yield varieties, adoption of suitable agronomic practices in low yielding regions, utilizing residual moisture, early sowing and lifesaving irrigation for rabi crops,” an agriculture ministry statement stated after the inauguration of the national conference on agriculture for rabi campaign-2022.

Also Read: Fresh review of gas pricing formula starts

It noted that the priority of the government is on agro-ecological based crop planning for diversion of land from excess commodities like rice and wheat to deficit commodities like oilseeds and pulses and high value export earning crops.

Last month, the government had estimated overall foodgrain output in the 2021-22 crop year (July-June) had hit a record 315.7 mt, buoyed by a record rice harvest of 130.2 mt. Wheat production has dropped almost 3% to 106.84 mt.

The drop in wheat output is attributed to heat-wave between March and June that hit the crop in the northern states of Punjab and Haryana. This eventually forced the government to impose a ban on wheat exports in May to keep local supplies steady. Trade sources believe the actual wheat output could have been below 100 mt.

According to trade estimate rice production in the next crop year (2022-23) could decline by around 6 – 10 mt because of fall in paddy acreage in the current kharif sowing so far because of deficiency in monsoon rainfall in key growing states of West Bengal, Bihar, Jharkhand and Uttar Pradesh.

Record production is estimated for crops such as rice, maize, gram (chana), pulses, rapeseed and mustard, oilseeds and sugarcane for 2021-22 crop year, agriculture and farmers welfare minister Narendra Singh Tomar said.

In a major boost to reducing import dependence, pulse output rose by close to 27.69 mt in the 2021-22 crop year compared to 25.46 mt estimated in the previous crop year.

The output of coarse cereals such as barley, bajra, maize and ragi is estimated to decline to 50.90 mt from 51.32 mt reported in previous crop year.

According to the agriculture ministry, in the non-food grain category, oilseeds output rose more than 4% to 37.7 mt in the 2021-22 crop year compared to previous year. Rapeseed/mustard seed production is estimated at a record 11.74 mt, which was 15% more than the 2020-21 crop year.

Soybean output rose by 3% to 12.99 mt compared to previous year. India imports about 56% of its edible oil requirement.

Sugarcane production in 2021-22 crop is estimated at record 431.8 mt compared to 405.39 mt in the previous year while cotton output is expected to drop to 31.2 million bales (170 kg each) from 35.24 million bales.

Petrol, Diesel Price Today, 28 Sep 2022: Fuel cost static; check rates in Delhi, Mumbai, Noida, other cities

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Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Lucknow: The price of petrol and diesel has been kept steady on 28 September 2022 (Wednesday), keeping costs steady for more than three months now. The petrol rate and diesel rates in Delhi are at Rs 96.72 and Rs 89.62 a litre, respectively. In Mumbai, petrol is retailing at Rs 106.31 per litre and diesel at Rs 94.27 per litre. The last country-wide change in price came on 21 May 2022, when Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol by Rs 8 per litre and Rs 6 per litre on diesel. Since then, Maharashtra is the only state to have cut rates. The Maharashtra government had announced a cut in value-added tax (VAT) on petrol by Rs 5 a litre and by Rs 3 a litre for diesel in July.

Also read: S&P 500 ends near two-year low as bear market deepens; 10-yr treasury yield touches highest in over 12 yrs

Also read: Reliance, HCL Tech, Dish TV, Torrent Pharma, Birla Corporation, IDBI Bank, Adani Group stocks in focus

Petrol, diesel prices in Chennai, Kolkata, Bengaluru, Lucknow, Noida, Gurugram

Mumbai: Petrol price: Rs 106.31 per litre, Diesel price: 94.27 per litre

Delhi: Petrol price: Rs 96.72 per litre, Diesel price: Rs 89.62 per litre

Chennai: Petrol price: Rs 102.63 per litre, Diesel price: Rs 94.24 per litre

Kolkata: Petrol price: Rs 106.03 per litre, Diesel price: Rs 92.76 per litre

Bengaluru: Petrol: Rs 101.94 per litre, Diesel: Rs 87.89 per litre

Lucknow: Petrol: Rs 96.57 per litre, Diesel: Rs 89.76 per litre

Noida: Petrol: Rs 96.79 per litre, Diesel: Rs 89.96 per litre

Gurugram: Petrol: Rs 97.18 per litre, Diesel: Rs 90.05 per litre

Chandigarh: Petrol: Rs 96.20 per litre, Diesel: Rs 84.26 per litre

Public sector OMCs including Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise the fuel prices daily in line with international benchmark prices and foreign exchange rates. Any changes in petrol and diesel prices are implemented from 6 am every day. Retail petrol and diesel prices differ from state to state because of local taxes like VAT or freight charges.

IKIO Lighting files IPO papers with Sebi to mop-up funds

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Manufacturer of LED lighting solutions IKIO Lighting Ltd has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial public offering (IPO).

The IPO consists of a fresh issue of equity shares worth up to Rs 350 crore and an offer-for-sale (OFS) of up to 75 lakh equity shares by promoters — Hardeep Singh and Surmeet Kaur, according to the draft red herring prospectus (DRHP).

Proceeds from the fresh issuance worth Rs 50 crores will be used for debt payment, Rs 236.68 crore will be used in the company’s wholly-owned subsidiary, IKIO Solutions, to set-up a new facility at Noida, Uttar Pradesh, and for general corporate purposes.

IKIO Lighting is a manufacturer of light emitting diode (LED) lighting solutions. It is primarily an original design manufacturer (ODM) and designs, develops, manufactures and supplies products to customers who then further distribute these products under their own brands.

It has four manufacturing facilities with one located in the SIDCUL Haridwar industrial park in Uttarakhand and three in Noida in the National Capital Region.

Also Read| Rupee likely to consolidate in near-term, may fall to 83 level, if 82 breached amid global uncertainty

IKIO Lighting’s revenue from operations surged by 55.47 per cent to Rs 331.84 crore for the financial year 2022 from Rs 213.45 crore for the financial year 2021. However, profit after tax grew 75.37 per cent to Rs 50.52 crore from Rs 28.81 crore during the period.

Motilal Oswal Investment Advisors is the sole book running lead managers to the issue. The equity shares are proposed to be listed on the BSE and NSE.

Wall Street nosedives on mounting economic growth concerns

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Wall Street tumbled on Thursday on worries of a global economic downturn from aggressive central bank policy and fears that a rout in global currency and debt markets could spillover to stocks.

The Nasdaq fell 3% due to losses in megacap growth names such as Amazon.com Inc, Apple Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc . They were down between 3.09% and 6.25%.

Also Read: Wall Street week ahead: As markets churn, investors hide in cash despite surging inflation

The benchmark index had recorded its first gain in seven sessions on Wednesday on easing Treasury yields after the Bank of England said it would buy long-dated British bonds to restore financial stability in markets.

However, the relief was short-lived as Sterling fell and bond prices slid on Thursday, with the selloff in assets spilling over to even safe-haven U.S. Treasuries and top-rated German bonds.

The S&P 500 index has lost about $9.1 trillion in market value this year and was last valued at $31.2 trillion, according to Datastream.

“There’s so many huge macro issues right now that are just terrifying for equity investors who typically want to look at fundamentals of companies,” said David Russell, vice president of Market Intelligence at TradeStation Group.

“So, it’s kind of like trying to go outside and do your gardening when there’s a hurricane coming.”

The yields on many Treasuries, which are considered virtually risk-free if held to maturity, now dwarf the S&P 500’s dividend yield, which recently stood at about 1.8%, according to Refinitiv Datastream.

Also Read: Global Markets: Dollar dishes the pain as selloff rumbles on

Meanwhile, comments from the Federal Reserve’s Cleveland President Loretta Mester echoed other central bank officials through the week, who have vowed more interest rate hikes to tame inflation.

At 12:23 p.m. ET, the Dow Jones Industrial Average was down 457.43 points, or 1.54%, at 29,226.31, the S&P 500 was down 79.82 points, or 2.15%, at 3,639.22, and the Nasdaq Composite was down 336.57 points, or 3.05%, at 10,715.07.

All of the 11 S&P 500 sector indexes were down between 1% to 3%, with consumer discretionary leading the slide as automobile stocks slumped.

CarMax Inc slumped 23.72% after the used-car retailer missed expectations for second-quarter results, hurt by consumers cutting spending amid inflation, rising interest rates and higher car prices.

General Motors Co and Ford Motor Co also took a hit, dropping about 5.5% each.

Airline carriers and cruise operators fell on cancelling or delaying trips after Hurricane Ian hit Florida’s Gulf Coast with catastrophic force.

American Airlines fell 4.3%, while United Airlines Holdings, Southwest Airlines and Delta Air Lines fell between 2.3% and 3.9%.

Cruise companies Norwegian Cruise Line Holdings Ltd and Carnival Corp fell 4.3% and 5.7%, respectively.

Declining issues outnumbered advancers for a 7.26-to-1 ratio on the NYSE and for a 3.87-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and 85 new lows, while the Nasdaq recorded six new highs and 393 new lows.

‘Fed will have to use brutal means to curb inflation’

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India has broken away from the other emerging markets, as it’s not as heavily influenced by US policy and China growth as others, says Sean Darby, chief global equity strategist at Jefferies. In an interview with Ashley Coutinho, he says the country will reap the benefits of its monetary policy management, which has been much more conventional in managing inflation. Excerpts:

Are the US and Europe headed for recession? How prolonged and painful will it be?

Also read: Nifty, Sensex surge 2% on strong global cues as bulls return to D-St; ‘market trend bullish, buy on dips’

Will inflation be tamed in a hurry?

For the US, the fact that the Fed is moving so swiftly and aggressively probably means that they would have been able to quench the worst of the inflation by next year. We think the Fed will be successful, but it’s going to have to use very brutal treatment, and that in itself means that you run a risk of actually overdoing it. And I think the market has been sort of pricing that in.

But there’s actually a very big difference between the major policy directions of all the major central banks. The US is somewhere through halfway in its tightening cycle. But China is in the process of cutting rates. The UK and Europe are definitely moving into a more awkward stagflationary environment, and that’s where the policy risks are the greatest, because they’re already slowing down.

What are your views on emerging markets, given the Fed tightening, surge in the dollar index, as well as the ongoing geopolitical tensions between Russia and Ukraine?

Also read: Rupee likely to remain steady amid positive cues; USDINR pair may trade sideways in this range

If we went back a year ago and said to ourselves that oil prices would be over $100 a barrel, Russia would invade Ukraine, China would be growing below trend, the Fed would be tightening rates in a very aggressive manner and you would have a record strong dollar, I would have said that the Asian emerging asset class would have been obliterated. The reality is that the asset class has done very well under that stress test; and in that respect, we should feel that when we come out of this cycle, Asian and EM markets should actually do very well.

What is your take on Indian equities? Do valuations look a bit stretched?

Our own indicators are showing us a cut in earnings estimates, and a slowdown in macro indicators or coincident indicators. Also, there are some troubling aspects for CPI as well. But if you look at the real GDP numbers and adjust these for the sort of pricing level in the economy, nominal GDP for next year will be in double digits. Government bonds are ruling over 7%, so I don’t think we’re anywhere in restrictive territory for the equity market. The central bank’s got a nice yield curve in front of it, because it’s steep, and that’s generally a nice environment to be raising rates. And yes, the forward multiple looks expensive, but if you use trend line earnings growth, the PEG ratios don’t look too much out of whack. So, it’s not perfect, but India’s one of the better places to be in at the moment.

What are the key risks for Indian equities?

If China was to reopen and we had another spurt of commodity-driven inflation, that would be a risk for India.

A very rapid slowdown in the Middle East would be harmful for remittances, because that’s really been an item that has kept the balance of payments in check. And a third risk would be a really big over-tightening by the US Fed. Nobody would get out of that problem easily.

The MSCI India has outperformed the MSCI EM by a wide margin this year. Does this signal a decoupling for India from the other emerging markets, or do you think it’s too early to reach that conclusion?

Well, I do generally think India has broken away from the other emerging markets, because many of them are so heavily influenced by not only the US policy, but also by China growth. Secondly, the country will reap the benefits of its monetary policy management 2015 onwards, because it’s a much more conventional way of managing inflation. And I think the Indian central bank has been able to restore its credibility very quickly. India’s probably going to do very well in the next 12 to 18 months, because conventional policies aren’t what the market is really seeking, and they’re getting that in spades at the moment from the US.

What are your thoughts on China, especially in the light of the current events? The property market has been under some stress, Chinese banks have been cutting their lending rates, Covid-19 lockdowns have impacted the economy and foreign investors have pulled out money from Chinese equities and bonds.

It’s a very difficult space for equity investors, because there are so many known unknowns, from the spillover effects from both Covid and the real estate bubble, to US geopolitics. It’s been almost impossible to navigate. The last 12 to 18 months have taught investors that secular growth stories, when they end or start to derate, can be an extremely uncomfortable experience. Seventy five percent of the moves in China equities is actually just being related to a derating of growth. But it’s been accompanied by a whole host of other issues alongside it.

Technology stocks have led the market decline in the US. What is the outlook for these stocks? And do you see pockets of value emerging in the space?

Tech stocks have derated because the yield curve has shifted upwards. And that means the multiples that you would give to growth equities is going to become more challenging. The paradox is that if we’re wrong and this is not a growth recession, but a balance sheet and credit solvency one, then many of the tech stocks will do relatively well because the market will place a premium on their cash flows. You think the multiples adjusted for lower earnings, but then rates move up and adjust the multiple again. I do like US tech stocks, but it’s painful because equities are in a no man’s land right now, and people are very bearish under these circumstances.

Benchmark yields to remain in 7.25-7.5% band

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Bond markets rallied after the Reserve Bank of India’s announcement of a 50-basis-points hike in the repo rate, but the yield on the benchmark bond closed Friday’s session at 7.3984%, up 5 basis points over the previous close.

Nevertheless, the yields have fallen five basis points in the current quarter, after rising by an aggregate of 140 basis points in the last four quarters. Most money market experts expect the yield on the benchmark to trade between 7.25% and 7.5% in the next couple of months. The government announced its borrowing calendar for H2FY23 on Thursday and said it would borrow Rs 10,000 crore less than planned – it will now borrow Rs 14.21 trillion in FY23. The markets believe that the government will not slip on its fiscal deficit targets despite higher expenses on fertiliser and other subsidies, and would save on revenue expenditure.

Suyash Choudhary, head, fixed income, HDFC, said he expects the repo rate to peak at 6.15 – 6.25% in this cycle with the final hike likely in the upcoming December policy. “This is higher than our earlier expectation of 6% and reflects changes to DM rate forecasts by a very sharp extent lately, something that we weren’t expecting earlier,” Choudhary said.

Meanwhile, the RBI reassured the markets there was no deficit of liquidity in the system. RBI governor Shaktikanta Das said surplus liquidity in the banking system had moderated to Rs 2.3 trillion during August-September 2022 (up to September 28) from Rs 3.8 trillion in June-July. Das said the liquidity situation is expected to ease, with the government starting to spend again. The government’s cash balances with the RBI are estimated at Rs 3.75 trillion.

“Furthermore, drawdown of excess cash reserve ratio (CRR) and excess statutory liquidity ratio (SLR) holdings of banks can also augment the system liquidity,” Das said.

“The RBI believes that the liquidity shortage is temporary. This should ease with the government spending coming back in the second half of the year,” a senior banker said. He added that the merging of 14-day and 28-day variable rate reverse repo auctions should help the liquidity situation to a small extent.

Bulls to stage a comeback or bears to drag Nifty below 16700? 5 things to know before market opening bell

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Indian benchmark indices are expected to open in the green as trends in SGX Nifty hinted at a positive opening for Indian equities. Nifty futures were up 189 pts or 1% up on the Singapore Exchange. In the previous session, the BSE Sensex plunged 509 points to 56,598, while the NSE Nifty 50 fell 149 points to 16,859. “In the near term, market is expected to remain under pressure due to global uncertainty. However mixed trends across sectors would continue to offer stock-specific opportunities, especially in auto, consumption with the ongoing festive season,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

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

Nifty technical view: “A small negative candle was formed on the daily chart with a long upper shadow. This market action signals the formation of a high wave or Doji-type candle pattern. Normally, such formation after a reasonable weakness calls for a pullback rally from the lows. But the overall market trend is still weak and there is no confirmation of any buying emerging from the lows. Having declined down to the 16800 support, there is a possibility of a minor pullback rally in the market from near 16800-16750 levels in the next 1-2 sessions,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Levels to watch for: “The support for Nifty has shifted around 16700 levels, while on the upside, 17100-17200 levels may act as an immediate hurdle. On the other hand, Bank Nifty has support at 37300 levels, while resistance at 38500 levels. Overall, the Nifty is trading near to its support zone one need to keep a close eye on global development as well. Pharma & IT stocks are looking good for buy.one can add on dips for long term returns,” said Palak Kothari, Senior Technical Analyst, Choice Broking.

IPO Watch: Swastik Pipe IPO opens for subscription on Thursday, and will close on 3 October at Rs 97-100 per share. Earlier this week on 26 September, the company fixed the price band of its initial public offering (IPO) at Rs 97-100 per share. The issue of 62.52 lakh shares will reserve 3,14,400 shares for the market maker. The company will raise Rs 62.52 crore through its public issue which will be used for working capital, general corporate purposes, and issue expenses.

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

Stocks under F&O ban on NSE: Vodafone Idea is the only stock under the National Stock Exchange’s F&O ban list for September 29. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 per cent of the market-wide position limit. All clients, members shall trade in the derivative contracts of Vodafone Idea only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action, according to NSE website.