Gold Price Today, 28 Sep 2022: Gold, silver rates fall on strong US Dollar, weak cues; MCX support at Rs 48500

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate and silver rate were trading weak on Wednesday, on the back of strong US Dollar. On Multi Commodity Exchange, gold October futures were trading Rs 99 or 0.2 per cent down at Rs 49,220 per 10 gram. Silver December futures were ruling Rs 581 or 1.05 per cent down at Rs 54,798 per kg. Globally, yellow metal prices slipped as the dollar resumed climbing after Federal Reserve officials reiterated the US central bank’s resolution to maintain an aggressive policy stance to tackle soaring inflation, according to Reuters. Spot gold was down 0.3% at $1,624.81 per ounce, U.S. gold futures dipped 0.2% to $1,632.4.

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MCX Gold October erased gains seen in early trade yesterday as the greenback continued to stay firm while upside remained limited in the precious metals complex. However, depreciation in rupee could continue to aid downside in domestic front MCX gold futures. The outlook is bearish. COMEX Gold has a strong support near $1,620 an ounce. Overall MCX Gold could continue to trade lower to Rs. 49,100 – 49,000 per 10 gm in October contract.

Bhavik Patel, Commodity & Currency analyst, Tradebulls Securities

The US Treasury yield hit 4.00% yesterday which strengthened the US Dollar and weakened all asset classes including gold. Bearish sentiment in the gold market has reached a four-year high. Money managers have dropped their speculative long position and added fresh short positions. Gold’s net short positioning increased to 36,695, doubling from the previous week. We have seen six weeks of outflow from Gold ETF on account of strong dollar. Initially gold was able to withstand the hawkish Fed but continuous rallies in the US dollar have put gold on back foot. Investors should wait for some stabilization in the marketplace. There is now risk of short squeeze building up so any trader holding a short position should hold with strict stoploss. $1600 continues to be strong support and breach below that would break the prices till $1540. In MCX, weak rupee is helping gold and next support comes at 48800-48500.

Also read: RBI MPC likely to hike repo rate by 50 bps again; commentary on liquidity, rupee depreciation keenly eyed

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

After a slight rebound earlier this week, both gold and silver prices witnessed some pressure as the Dollar Index gained momentum once again amidst hawkish speech from fed officials. Minneapolis Federal Reserve Bank President Neel Kashkari said U.S. central bankers are united in their determination to do what is needed to bring inflation down, and financial markets understand that. Meanwhile, Chicago Fed President Charles Evans said the central bank will need to raise interest rates to a range between 4.50% and 4.75%. Market participants are expecting the Fed to maintain its hawkish stance, raising expectations of further aggressive rate hikes. These expectations are supporting the move in Dollar Index and U.S. Yields which is currently trading ~114.40 and 3.9% respectively, weighing on the precious metals pack. New orders for U.S. manufactured capital goods increased more than expected in August, suggesting that businesses remained keen to invest in equipment despite higher interest rates, which could keep the economy on a moderate growth path. Focus today will be on the comments from the Fed and ECB Governor. Broader trend on COMEX could be in the range of $1610-1657 and on domestic front prices could hover in the range of Rs 48,850-49,550.

(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.)

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

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A tough year in markets is leading some investors to seek refuge in cash, as they capitalize on higher interest rates and await chances to buy stocks and bonds at cheaper prices.

The Federal Reserve has roiled markets in 2022 as it implements huge rate hikes in an effort to moderate the steepest inflation in 40 years. But higher rates are also translating into better rates for money market funds, which had returned virtually nothing since the pandemic began in 2020.

Fund managers increased their average cash balances to 6.1% in September, the highest level in more than two decades, a widely followed survey from BofA Global Research showed.

Assets in money market funds have stayed elevated since jumping after the pandemic began, coming in at $4.44 trillion as of last month, not far from their peak of $4.67 trillion in May 2020, according to Refinitiv Lipper.

Also Read: Wall Street extends losses, US stocks tumble amid Fed tightening jitters, economic rumblings

“Cash is now becoming a viable asset class because of what has happened to interest rates,” said Paul Nolte of Kingsview Investment Management, who said the portfolios he manages have 10 to 15% in cash versus less than 5% typically.

“It gives me the opportunity in a couple months to look around in the financial markets and redeploy if the markets and the economy look better,” said Nolte.Investors are looking to next week’s Fed meeting, at which the central bank is expected to enact another jumbo rate hike, following this week’s consumer price index report that came in hotter than expected.

The S&P 500 fell 4.8% in the past week and is down 18.7% this year. The ICE BofA U.S. Treasury Index is on pace for its biggest annual drop on record.

Meanwhile, taxable money market funds had returned 0.4% so far this year as of the end of August, according to the Crane 100 Money Fund index, an average of the 100 largest such funds.

The average yield in the Crane index is 2.08%, up from 0.02% at the start of the year and the highest level since July 2019.

“They are looking better and their competition is looking worse,” said Peter Crane, president of Crane Data, which publishes the money fund index.

Of course, sitting in cash has its drawbacks, including the possibility of missing a sudden reversal that takes prices for stocks and bonds higher. Inflation, which stood at 8.3% on an annual basis last month, has also dented the appeal of cash.

“Certainly you are losing some purchasing power with inflation running at 8-plus percent, but… you are taking some money off the table at a risky time for equity markets,” said Peter Tuz, president of Chase Investment Counsel. “Your equities could be down 8% in two weeks.”

While an obvious sign of caution among investors, extreme levels of cash are sometimes viewed as a so-called contrarian indicator that bodes well for equities, said Mark Hackett, Nationwide’s chief of investment research, especially when taken in concert with other measures of investor pessimism.

Hackett believes stocks may stay volatile in the near-term, amid various risks including potential earnings weakness along with high inflation and the hawkish Fed, but he is more upbeat about the outlook for equities over the next six months.

“There’s a degree of a coiled spring developing where if everybody is already on the sidelines at some point there is nobody left to go on the sidelines and that leads you to potentially any piece of good news resulting in a very outsized move,” Hackett said.

David Kotok, chief investment officer at Cumberland Advisors, said his U.S. equity portfolio made up of exchange-traded funds is currently 48% in cash after being almost fully invested in equity markets last year.

Stocks are too expensive given risks including rising interest rates, the potential for a Fed-induced recession and geopolitical tensions, Kotok said.

“So I want cash,” Kotok said. “I want the cash to be able to deploy back into the stock market at lower prices or substantially lower prices, and I don’t know which opportunity I’ll have but the only way I can seize it is to be holding that amount of cash.”

Share Market Highlights: Sensex surges 1200 pts, Nifty ends above 17250; HDFC Bank leads gains

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Share Market News Today | Sensex, Nifty, Share Prices Highlights: Bulls dominated Dalal Street as benchmark indices surged over 2 per cent amid positive global cues. A global rebound in market sentiment propelled domestic equities higher. The S&P BSE Sensex gained 1,277 points, or 2.25 per cent, to settle at 58,065, while Nifty 50 shut shop at 17,274, up 387 points or 2.29 per cent. The index neared 17,300-mark in intra-day deals. All the sectoral indices ended in the green with auto, bank, metal, IT, power and realty up 2-3 percent. The Indian rupee closed 39 paise higher at 81.48 per dollar on Tuesday against previous close of 81.87.

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Share Market Today | Sensex, Nifty, BSE, NSE, Share Prices, Stock Market News Updates 4 October

15:43 (IST) 4 Oct 2022 Bank, Financials, IT stocks lead gains

Sectorally, all the indices ended in the positive zone led by the Nifty Private Bank and Metal indices (3.2 per cent each), Nifty Bank, PSU Bank, Financial Services, IT indices (2.8 per cent each), and Nifty FMCG index (1.8 per cent). 

15:41 (IST) 4 Oct 2022 Top gainers, losers

IndusInd Bank, Bajaj Finance, TCS, HDFC, Bajaj Finserv, Tata Steel, HDFC Bank, Wipro, L&T, Axis Bank, ITC, SBI, and Infosys were the top Sensex gainers, rising between 2.5 per cent and 5 per cent. On the downside, only PowerGrid, and Dr Reddy’s Labs ended in the red.

15:36 (IST) 4 Oct 2022 Nifty, Sensex end 2% higher

Bulls drive Sensex over 1,200 points higher, Nifty settles above 17,250

15:29 (IST) 4 Oct 2022 Power stocks gain

BSE Power index gained 2 per cent, led by the NHPC, Adani Transmission, Torrent Power

15:18 (IST) 4 Oct 2022 Britannia Industries arm acquires 51% stake in Kenafric Biscuits, stock up 1%

Britannia Industries through its subsidiary Britannia and Associates (Dubai) has acquired control of Kenafric Biscuits, Kenya by subscribing to 51% stake in the said company, for Rs 9.2 crore. The subsidiary also acquired 100% stake in Catalyst Britania Brands for Rs 1.42 crore. Britannia Industries was quoting at Rs 3,819.40, up Rs 51.45, or 1.37 percent on the BSE.

15:17 (IST) 4 Oct 2022 Nifty may reclaim 17500 this week

Bulls took over Dalal Street as equities firmed up amid strong sentiments overseas. Frontline Nifty50 surged over 350 points to test 17,250 levels, and Sensex surged 1,200 points to trade at 58,000 levels. Nifty may cross 17500 level this week. Investors can book profits in longs today. ~Rahul Sharma, Head – Technical & Derivatives Research, JM Financial Services.

14:45 (IST) 4 Oct 2022 IT stocks support benchmark index rally

Nifty IT index gained 2.7 per cent, led by Coforge, L&T Infotech and TCS

14:44 (IST) 4 Oct 2022 SphitiCap launches maiden fund with a total corpus of $500 million

SphitiCap today announced the launch of its maiden Venture Fund with a total corpus of $500 million, which the firm is in the midst of closing. The early stage fund is supporting investments in enterprises that align with the tenets of sustainability, growth, and impact. 

14:34 (IST) 4 Oct 2022 Bajaj Steel appoints Vinod Kumar Bajaj as additional non-executive director

Bajaj Steel appoints Vinod Kumar Bajaj as additional non-executive director. Shares jumped 1 per cent.

14:15 (IST) 4 Oct 2022 Indices hold sharp gains

Sensex is up 1,215.94 points or 2.14 percent at 58,004.75. Nifty is up 371 points or 2.20 percent at 17258.30.

14:15 (IST) 4 Oct 2022 BSE Volume shockers

Easy Trip Planners, Bank of Maharashtra among volume shockers on BSE. Easy Trip Planners has witnessed unusually high volume of around 7.91 lakh shares on the BSE so far as against its five-day average volume of around 1.53 lakh shares. Similarly, Bank of Maharashtra, REC, Junilant Ingreva and Jubilant Pharmova also witnessed a significant spike in volume in trade intraday.

14:03 (IST) 4 Oct 2022 Reliance shares rise 1%

Reliance Industries’ subsidiary RSBVL and US-based Sanmina Corporation have completed the deal to set up an electronics manufacturing joint venture at a total enterprise valuation of about Rs 3,300 crore.

13:05 (IST) 4 Oct 2022 Indices at day’s high

Indian benchmark indices were trading at day’s high with Nifty around 17250.The Sensex was up 1,181.82 points or 2.08% at 57970.63, and the Nifty was up 357.60 points or 2.12% at 17244.90.

13:05 (IST) 4 Oct 2022 DMart shares jump 4%

Shares of Radhakishan Damani-backed Avenue Supermarts, which runs the DMart chain of retail stores, rose nearly 4% after the company reported a standalone revenue from operations of Rs 10,385 crore in the September quarter. The revenue increased 35.8% as compared to the year-ago period. Citing September quarter data, brokerage firm Motilal Oswal gave a neutral call on the stock with a reduced target price of Rs 4,100, which is 8.6% lower from the current market price of Rs 4,485.60.

13:03 (IST) 4 Oct 2022 Blue Dart share hit new high; rally 14% in a week

Blue Dart share price hit a new high intraday, The stock has rallied 14 per cent in a week on 10% price hike decision. Blue Dart Express, on September 28, had announced that the average shipment price increase will be 9.6 per cent as compared to 2022, depending on the shipping profile. The company said the customers signing up from October 1, 2022 to December 31, 2022 will not be impacted by the price increase.

13:01 (IST) 4 Oct 2022 Pharma stocks gain

Nifty Pharma index conquered 200-DMA. The Pharma index has outperformed the overall market in recent trading sessions. Sustenance above the 200-DMA is expected to trigger further gains for the index. Cipla, Granules shares can soar up to 15%.

12:59 (IST) 4 Oct 2022 Electronics Mart India IPO update

The initial public offering (IPO) of Electronics Mart India, the fourth largest consumer durables and electronics retailers in India, was subscribed 45 per cent on the first day of the subscription. The offer garnered bids for 2.82 crore equity shares against an offer size of 6.25 crore equity shares. The offer size was reduced to 6.25 crore equity shares from around 8.47 crore after raising Rs 150 crore through anchor book on October 3. Retail investors were once again at the forefront, subscribing 81 per cent shares of the allotted quota. Non-institutional investors also started putting bids for the issue, buying 22 per cent of the portion set aside for them. Qualified institutional investors bought 3,556 shares against 1.78 crore shares reserved for them.

12:58 (IST) 4 Oct 2022 PSU Bank stocks rise

Nifty PSU Bank index rose 2 per cent, led by the Bank of Maharashtra, Punjab National Bank (PNB), Bank of Baroda

12:58 (IST) 4 Oct 2022 IndusInd Bank shares jump 5%

Shares of IndusInd Bank advanced nearly 5 per cent after the lender reported strong loan and deposit growth for the September quarter, lifting the investor sentiment.

The lender said its advances grew 18 percent year-on-year (YoY) and 5 percent quarter-on-quarter (QoQ), beating most peers. Advances stood at Rs 2,59,647 crore as of September as against Rs 2,20,808 crore a year back. Deposits with the bank rose 15 percent YoY from Rs 2,75,473 crore to Rs 3,15,824 crore as of September 2022. It was a 4 percent on-quarter rise, the bank said.

12:13 (IST) 4 Oct 2022 Nifty, Sensex holding firmly in green

Benchmark indices were trading higher in noon deals with Nifty around 17200. The Sensex was up 1,135.56 points or 2% at 57924.37, and the Nifty was up 348.20 points or 2.06% at 17235.50.

12:11 (IST) 4 Oct 2022 Buy good quality company stocks available at reasonable valuations

“We expect that this move in both Bank Nifty and Nifty50 can sustain as long as the market believes that the global central banks, especially the US Fed, will now be inclined to reduce/stop liquidity tightening measures. We believe that investors should buy good quality companies available at reasonable valuations in this rally, to not get caught on the wrong side, if the market expectations of the US Fed pivot does not hold true.”~Nishit Master, Portfolio Manager, Axis Securities PMS

12:11 (IST) 4 Oct 2022 Firm global cues, positive business updates by banks cheer investors

“The Indian markets are up almost 2% today following global cues since the US markets were up ~2.5% yesterday, and Dow futures today are indicating a positive 1% opening again. The movement in the global markets is in anticipation of a pivot by the US Fed towards slowing down or stopping liquidity tightening due to various financial risks now apparent. The business updates shared by banks and other financial intermediaries for Q2FY23 have been encouraging, and thus, the Financial sector is leading the rally in India, leading to upbeat estimates for the overall earnings season.”~Nishit Master, Portfolio Manager, Axis Securities PMS

12:09 (IST) 4 Oct 2022 Index heavyweights gain

The positive sentiment and reduced risk appetite among investors lifted shares of index heavyweights. Shares of Bajaj Finance, Bajaj Finserv, HDFC, HDFC Bank, Tata Consultancy Services, ITC, Reliance Industries surged in the range of 1 per cent to 3 per cent in intra-day trade.

12:08 (IST) 4 Oct 2022 Rupee bounceback aid market rally

The Indian rupee strengthened by 39 paise to 81.42 against the US dollar in early trade, on the back of strong global market cues, and weakness in the global greenback. The dollar index, which gauges the greenback against a basket of six currencies, slipped 0.1 per cent to 111.5. However, the 0.4 per cent rise in prices of Brent Crude ahead of the OPEC+ meet limited upward movement of the domestic currency.

12:07 (IST) 4 Oct 2022 FII buying pull markets higher

A strong start to October series was seen as FIIs made a soft landing in the cash segment of Indian equity markets. FIIs bought shares worth Rs 590 crore on Monday, as against outflows of Rs 423 crore worth of equities by the domestic institutional investors (DIIs).

12:06 (IST) 4 Oct 2022 What’s fueling market rally?

Firm global cues: After the sharp decline last week, the US markets rebounded in Monday’s trade after 10-year, and 2-year treasury yields dropped to 3.6 per cent, and 4.1 per cent, respectively, on weaker-than-expected manufacturing data. All three major Wall Street indices – Dow Jones, NASDAQ Composite, and the S&P 500, closed over 2 per cent higher, to start the final quarter of the year on a positive note. Besides, US equity futures, too, held ground on Tuesday as Dow Jones Futures traded over 200 points higher to 0.8 per cent. The strong sentiments spilled across markets in Asia-Pacific, too, as Japan’s Nikkei 225, Topix, and South Korea’s Kosdaq climbed in the range of 2 per cent to 3 per cent in Tuesday’s trade.

11:46 (IST) 4 Oct 2022 Vedanta shares jump 2%

Vedanta said its alumina production at Lanjigarh refinery decreased by 11% YoY to 4.54 lakh tonnes due to scheduled maintenance, and at Zinc India, reported highest-ever second quarter mined metal production at 2.55 lakh tonnes, up 3 percent YoY, driven by better grades and improved mill recoveries.  In the steel segment, its total saleable production increased by 11% YoY to 3.25 lakh tonnes on account of completion of debottlenecking activities in Q1FY23.

11:18 (IST) 4 Oct 2022 Electronics Mart India IPO subscription update

The initial public offering (IPO) of Electronics Mart India, the fourth largest consumer durables and electronics retailers in India, was subscribed 11 per cent within hours of opening on October 4. The offer garnered bids for 68.4 lakh equity shares against an offer size of 6.25 crore equity shares. Retail investors were at the forefront, subscribing 21 per cent shares of the allotted quota. Non-institutional investors also started putting bids for the issue, buying 3 per cent of the portion set aside for them.

10:54 (IST) 4 Oct 2022 Broader market may remain volatile in short term

“Benchmark index closed negative for eight out of last nine trading sessions ahead of the interest weak global clue, interest rate hike, Rupee depreciation and FII outflow. The broader market may remain volatile in the short term. For benchmark index Nifty, 17400 level may act as an immediate hurdle while on downside, 16700 will act as an important support zone, and breaching this may drag-down the indices towards 16000 in near term. It is recommended investors to continue with a disciplined approach, focus on asset allocation and look at equities from a medium to long term.”~Akhilesh Jat, Category Manager – Equity Research.

10:51 (IST) 4 Oct 2022 HDFC shares gain 2% after Q2 business update

The Bank’s advances aggregated to approximately Rs 14,800 billion as of September 30, 2022, a growth of around 23.5% over Rs 11,988 billion as of September 30, 2021 and a growth of around 6.1% over Rs 13,951 billion as of June 30, 2022.

The Bank’s deposits aggregated to approximately Rs 16,735 billion as of September 30, 2022, a growth of around 19.0% over Rs 14,063 billion as of September 30, 2021 and a growth of around 4.3% over Rs 16,048 billion as of June 30, 2022. 

10:35 (IST) 4 Oct 2022 Easy Trip shares jump 2.5%

Easy Trip shares rose 2.5 per cent as the company is going to consider bonus shares, stock split this month. A meeting of the Board of Directors of the company is scheduled to be held on October 10, 2022, for considering the proposal for increase in Authorised Share Capital, issue of Bonus Shares and/or SubDivision/Split of Share.

10:33 (IST) 4 Oct 2022 Liberty Shoes hits multi-year high on strong outlook; stock rallies 104% in 1-month

In the past one month, the stock price of the footwear company more-than-doubled or zoomed 104 per cent, compared to 1.7 per cent decline in the S&P BSE Sensex. The stock traded close to its record high of Rs 351 apiece, which it had hit on July 22, 2014.

10:33 (IST) 4 Oct 2022 Axis Securities Top stock picks

ICICI Bank, Tech Mahindra, Maruti Suzuki India, State Bank of India, Dalmia Bharat, Federal Bank, Varun Beverages, Ashok Leyland, Astral Ltd (India), Bata India, APL Apollo Tubes, HealthCare Global Enterprises, Praj Industries, CCL Products (India), Coal India and Bajaj finance

10:32 (IST) 4 Oct 2022 Market long-term outlook positive; ‘Buy on dips’

“While the medium to long-term outlook for the overall market remains positive, we could see volatility in the short run with the market responding in either direction. In this context, the current setup is a ‘Buy on Dips’ market. We recommend investors maintain good liquidity (10%) to use such dips in a phased manner to build a position in quality companies (where the earnings visibility is very high) and with an investment horizon of 12-18 months.”~Axis Securities

10:31 (IST) 4 Oct 2022 Nifty to hit 18400 by FY23 end

“We continue to maintain a positive long-term outlook on the market, supported by the favourable structure emerging with increasing Capex enabling banks to improve credit growth. Moreover, the overall expenditure boost in the Union Budget 2022-23 will help deliver broad based growth in FY23. We foresee FY23/24 NIFTY EPS at 820/929 and maintain our NIFTY Mar’23 target of 18,400 unchanged as we value it at 20X FY24 earnings vs. 22X earlier. Though aggressive policy tightening will help in curbing inflationary pressure, persistently elevated Oil and Commodity prices would continue to pose challenges to the market multiple in the next few quarters. The current level of India VIX is below the long-term average, indicating that the market is in a neutral zone.” Axis Securities

10:10 (IST) 4 Oct 2022 M&M Finance soars 10%

Mahindra & Mahindra Finance shares soared 10% as asset quality improved in September quarter

10:09 (IST) 4 Oct 2022 Nifty, Sensex at day’s high

Benchmark indices were trading at day’s high level with Nifty above 17200. The Sensex was up 1,236.32 points or 2.18% at 58025.13, and the Nifty was up 358.40 points or 2.12% at 17245.70.

09:58 (IST) 4 Oct 2022 IT stocks rally

Nifty Information Technology (IT) index rose 2 per cent, led by the L&T Technology Services, Coforge, TCS

09:56 (IST) 4 Oct 2022 Marico bucks market trend, slips 1.5%

Marico share price slipped 1.5% as India business posted low-single digit volume growth. Marico’s India business posted low single-digit volume growth with the 3-year CAGR in high single digits and international business maintained its strong run, delivering double-digit constant currency growth. With this, its consolidated revenue in September FY23 quarter grew in low single digits on a year-on-year basis. Net profit will be further impacted by higher effective tax rate.

09:50 (IST) 4 Oct 2022 DMart share price jump 1.7%

The D-Mart operator, Avenue Supermarts, share price jumped after the company announced standalone revenue for the quarter ended September 2022 at Rs 10,384.66 crore, up significantly by 36% from Rs 7,649.64 crore in the same period last year. The total number of stores as of September 2022 stood at 302.

09:49 (IST) 4 Oct 2022 Metal stocks gain

BSE Metal index added 2 per cent, led by Hindalco Industries, Vedanta, JSW Steel

09:41 (IST) 4 Oct 2022 Bank Nifty surges 1000 pts

Nifty Bank index rose over 2 per cent supported by the IDFC First Bank, IndusInd Bank, Bank of Baroda, Bandhan Bank

09:39 (IST) 4 Oct 2022 Top NSE gainers

Mahindra & Mahindra Financial Services: Rs 197, up 9%

IDFC Firdt Bank: Rs 52, up 6.1%

Delta Corp: Rs 212, up 5.7%

L&T Finance Holdings: Rs 76, up 5.04%

IndusInd Bank: Rs 1208, up 4.51%

09:36 (IST) 4 Oct 2022 Nifty may test 17300

Benchmark index Nifty 50 surges over 300 points to trade at 17230. The index may test 17,300, said Rahul Sharma, Head – Technical & Derivatives Research, JM Financial Services.

09:33 (IST) 4 Oct 2022 Mahindra & Mahindra Financial Services shares surge 9%

Mahindra & Mahindra Financial Services shares surged 9% after the company reported Q2 numbers. The Q2FY23 disbursements were ahead of estimates as disbursements & collections remained strong in September, which were aided by macro tailwinds as per management. The collection efficiency in September rose on a monthly basis, with gross stage-3 at 7% versus 8% in Q1. However, AUM & asset quality were better than street estimates.

09:31 (IST) 4 Oct 2022 For near-term, market sentiments have turned positive

“In the last eight out of ten years Sensex has given positive returns in October. Also, markets have a record of troughing out in October. This may happen this October too. The ‘risk-off, risk-on’ texture of the market is in response to fast changing economic and market signals. For the near-term the market sentiments have turned positive with declining trend in dollar and US bond yields. If this trend continues FIIs will again turn big buyers in India and they will not get stocks cheap. Financials and autos are again set to lead the uptrend since their fundamentals and prospects are strong. Capital goods are likely to join the rally and telecom is on strong wicket.”V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

09:30 (IST) 4 Oct 2022 Banking stock gain

Broad-based gains seen across pockets; Public Sector Bank (PSB) index rises 3 per cent.

09:28 (IST) 4 Oct 2022 Top gainers

All the sectoral indices are trading in the green. Hindalco Industries, IndusInd Bank, Adani Enterprises, Adani Ports and L&T were among major gainers on the Nifty index.

09:24 (IST) 4 Oct 2022 Bank Nifty up 2.5%

“The Bank Nifty has relatively outperformed and ended only 2% lower for September vs. Nifty loss of 3.8%. Axis Bank and Kotak Bank were the worst performers in the second half of September whereas others fell in line with the index. PSU banks’ OI remained lower. In the recent past, we saw cash based selling indicating follow up selling could be seen in the coming few days. The open interest in the Bank Nifty continued to remain lower at the start of the new series and few private banks started the new series near there sizeable Call bases. We expect more of a stock specific actions in the banking space where IndusInd and other midcap private banks should attract buying interest whereas closures in Call writing positions in other leaders should help the index to surpass its Call base.”ICICIDirect

09:20 (IST) 4 Oct 2022 Nifty nears 17200 resistance

Nifty jumps 280 points in opening trade to 17,160. The index is nearing resistance level of 17200,

Sharing documents with RIL: SC to hear Sebi review plea today

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The Supreme Court will hear on Thursday Sebi’s petition seeking review of its earlier judgment that had directed the market regulator to share certain documents which Reliance Industries (RIL) claims will exonerate it and its promoters from criminal prosecution initiated in a case related to the alleged irregularities in the acquisition of its shares between 1994 and 2000.

The Securities and Exchange Board of India (Sebi) has been opposing RIL’s plea and had rejected its request for the “privileged” documents on the grounds that under the Sebi (Settlement Proceedings) Regulations, the accused company had no right to seek information from it.

So far, the market regulator has not shared the three documents – the two legal opinions by former SC judge BN Srikrishna and the former ICAI president YH Malegam’s report which examined the irregularities — that the SC had on August 5 asked it to share “forthwith”, thus prompting RIL to file a contempt petition against Sebi and its authorised representative Vijayan A.

“The duty to act fairly by Sebi is inextricably tied with the principles of natural justice, wherein a party cannot be condemned without having been given an adequate opportunity to defend itself,” the apex court said.

The Ambani firm says Sebi had obviously “misadvised itself” in assuming that its compliance with the judgment is a matter of discretion and on which it can see advice. Even RIL’s contempt petition against Sebi is yet to be taken up for hearing by the SC.

Chartered accountant S Gurumurthy had filed a complaint with Sebi in 2002 alleging fraud and irregularities by RIL, its associate companies and their directors/ promoters, including Mukesh Ambani and his wife Nita; Anil Ambani and his wife Tina; and 98 others in the issue of two preferential placement of non-convertible debentures in 1994.

Sebi had alleged that RIL along with Reliance Petroleum had “circuitously funded the acquisition of its own shares” in violation of Sections 77 and 77A of the Companies Act, 1956 and the market regulator’s then takeover code, among various other regulations.

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

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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

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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

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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

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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

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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

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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.