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Last Updated : Jul 22, 2019 07:14 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Nifty may see lower levels amid consolidation

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The S&P BSE Sensex breached 39,000 on the downside while Nifty50 closed below 11,500 to hit a two-month low. But, the carnage was seen mostly in the broader markets which fell over 3 percent for the week ended July 19.

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The S&P BSE Sensex fell 1.03 percent while the Nifty50 closed 1.15 percent compared to 3.3 percent plunge seen in the S&P BSE Smallcap index and 3.2 percent decline in the S&P BSE Midcap index.

The large part of the decline was on account of muted corporate results, no immediate resolution with respect to trade talks between the US and China, slow down seen in domestic economic growth, and the finance minister’s comments which dashed hopes of foreign investors of any reversal in levy of surcharge of FPIs.

As many as 119 stocks in the S&P BSE Smallcap index fell 10-40 percent which include names like Dhanlaxmi Bank, NCC, Jet Airways, MindTree, Opto Circuits, Time Technoplast, Allahabad Bank, Manpasand Beverages, Cox & Kings, Orchid Pharma, and Talwalkar Better Value, etc. among others.

In the S&P BSE 500 index, as many as 38 stocks fell 10-20 percent which include names like YES Bank, Reliance Capital, Reliance Power, Manpasand Beverages, DCB Bank, RBL Bank, DHFL, and Religare Enterprises, etc. among others.

The rupee snapped its three-day losing streak to close 17 paise higher at 68.80 against the US dollar on Friday as market participants pinned their hopes on an aggressive rate cut by the US Federal Reserve later this month.

On the institutional front, FPIs were net sellers in Indian markets for Rs 950 cr while the DIIs were net buyers to the tune of Rs 733 cr, provisional data showed.

Big News:

As many as 32 companies will declare their results for the quarter ended June which include names like Aptech, Can Fin Homes, ICICI Securities, Kotak Mahindra Bank, TVS Motor Company, OBC, and United Spirits.

TVS Motor: PAT likely to fall by 3.6% YoY to Rs 141 cr

Kotak Mahindra Bank: PAT likely to rise by 32% YoY to Rs 1358 cr

United Spirits: PAT likely to grow by 27% YoY to Rs 134 cr

(All estimates are from Motilal Oswal)

Technical View:

Nifty formed a long black day kind of candle on the daily charts

The fall witnessed in the last two sessions indicates that the index can see much lower levels amid consolidation, experts said.

Interestingly, the last two trading sessions' price action washed the entire pullback rally from the lows of 11,461–11,707 levels which lasted for 6 sessions.

The Nifty50 faced pressure around 13-days exponential moving average and closed below 100-days EMA. It broke below intra-month swing low of 11,461, and the next crucial support is seen at 200-days EMA placed at 11,293 on daily charts.

Three levels: 11299, 11640, 11700

Max Call OI: 11600, 11700

Max Put OI: 11300, 11400

Stocks in news:

Private sector lender HDFC Bank's April-June quarter earnings matched analyst expectations with profit growing 21 percent year-on-year, though asset quality weakened slightly on sequential basis.

Reliance Industries, the country's largest company by market capitalisation, reported a consolidated profit after tax of Rs 10,104 crore for the June quarter, up 6.8 percent from a year ago.

Crisis-hit Unitech Ltd on July 19 reported a consolidate net loss of Rs 790.83 crore during the last fiscal. The Gurugram-based developer had posted a net loss of Rs 1,263.86 crore in the previous fiscal, the company said in a regulatory filing.

Technical Recommendations:

We spoke to Axis Securities and here’s what they have to recommend:

Grasim Industries (Aug Fut): Sell| Target: Rs 855-840| Stop Loss: Rs 911| Downside 4-6%

Adani Ports (Aug Fut): Sell| Target: Rs 395-387| Stop Loss: Rs 423| Downside 5-7%

Bajaj Finance (Aug Fut): Sell| Target: Rs 3260-3180| Stop Loss: Rs 3500| Downside 4-6%

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. 



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First Published on Jul 22, 2019 07:12 am
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