Moneycontrol
Last Updated : Oct 22, 2018 07:12 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Market likely to remain volatile with multiple hurdles towards 10,500

As long as the index trades below 10450-10480 zones it could slip towards its crucial support and recent swing low of 10200-10138 zones.

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Indian markets witnessed a sell-off on Friday with the Nifty 50 index tanking almost 150 points.

The index slipped 1.6 percent while the S&P BSE Sensex witnessed a fall of 1.2 percent for the week ended October 19.

Selling in large-cap names such as RIL, TCS, as well as renewed concerns about liquidity conditions in the NBFC space, dented investor sentiment.

RBI opens banking tap to ease liquidity crunch at NBFCs also failed to lift sentiment. The provision will allow banks to free up Rs 50,000-60,000 crore of liquidity which banks can lend to NBFCs till December 31.

“Post the IL&FS crisis NBFCs are facing a credit crunch, with liquidity drying up and banks reluctant to lend to the sector. We maintain a cautious view on this sector,” Hemang Jani, head of advisory, Sharekhan by BNP Paribas said.

“We prefer private banks such as HDFC which have a healthy CASA ratio. Investors with patience and a longer holding period can systematically accumulate corporate lending banks such as ICICI Bank and Axis Bank over the next 6-9 months for handsome gains (better than benchmark indices) over 24-30 months,” he added.

Given the fact we have expiry in the coming week, markets are likely to remain volatile.

As long as the index trades below 10450-10480 zones it could slip towards its crucial support and recent swing low of 10200-10138 zones.

On the upside, multiple hurdles are seen at every small bounce towards 10500 levels.

Big News:

Earnings will remain to be the talking point this week as well. As many as 38 companies will be reporting results for the September quarter later today which include names like Asian Paints, Can Fin Homes, GlaxosmithKline Pharma, HOEC, Hindustan Zinc, Oberoi Realty, Omax Auto, Welspun India etc. among others.

Asian Paints: Net profit is likely to grow by 3.8% YoY to Rs 546 crore

Hindustan Zinc: Net profit is likely to fall by 21% YoY to Rs 1781 crore

Oberoi Realty: Net profit is likely to rise by 145% YoY to Rs 256 crore

Technical View:

Nifty formed a bearish candle on the weekly scale

Three levels: 10138-10200, 10380, 10500

Max Call OI: 11000, 10600

Max Put OI: 10000, 10200

Stocks in news:

HDFC Bank: HDFC Bank, the country's second largest private sector lender, has reported a healthy 20.6 percent year-on-year growth in Q2 FY19 profit to Rs 5,005.73 crore, driven by net interest income (NII), other income and operating income.

ICICI Lombard General Insurance's Q2 FY19 net profit grew 43.6 percent year-on-year to Rs 293.10 crore due to a reduction in expenses.

Private life insurer SBI Life Insurance posted a 11 percent year-on-year (YoY) increase in its September quarter net profit at Rs 250.53 crore. The new business premium for Q2FY19 saw a 9 percent increase YoY to Rs 2,221.92 crore.

Technical Recommendations:

We spoke to 5nance.com, and here’s what they have to recommend:

ITC: Buy| Target: Rs. 306 | Stop-Loss: Rs. 275 | Return: 6%

NIIT Technologies: Buy| Target: Rs. 1,288| Stop-Loss: Rs 1,220 | Return: 4%

Avenue Supermart: Sell| Target: Rs 1,201 | Stop-Loss: Rs. 1,268 | Downside: 3%

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Oct 22, 2018 07:12 am
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