Closing Bell: Market ends marginally higher amid volatility; realty, mid, smallcaps gain

Amidst volatility, the benchmark Nifty gained in today’s trading session as investors attempted to shrug off the mounting anxiety over the Federal Reserve's determination to stamp out inflation.

The key negative catalyst for the day was WTI crude futures spiked above USD 95 per barrel. Technically, Nifty’s major hurdle continues to be at 18115 mark and above the same, the immediate target is placed at Nifty’s all-time-high at 18605 mark. For Thursday’s session, Nifty’s major hurdle is at 17757 mark.

The index remained choppy during the day as the Nifty moved within bands of 17500 and 17600. The daily RSI is in bearish crossover. However, it has sustained above the important near term moving average during the day.

The trend for the short term looks sideward. On the higher end, resistance is visible at 17700; whereas on the lower end, support is visible at 17500/17400.

After the first leg of the decline from 18000, the Nifty had taken support near the 20 DMA on August 23. Thereon the index is attempting a minor degree bounce. The price action in the last couple of sessions shows an overlapping structure. Also, the index has now reached near the junction of the 40 hour exponential moving average & the hourly upper Bollinger Band.

This setup suggests that the next leg down is around the corner. On the downside, 17350-17300 will be the initial target area, below which 17000 will be the overall short term target. On the other hand, 17650-17700 is the key barrier that is expected to keep the bounce in check.

The Bank Nifty index was the clear outperformer in today's trading session and has surpassed the immediate hurdle of 39,000. The index remains in a buy-on-dip mode with immediate support at the 38,500 level where a strong base has been formed.

The next hurdle on the upside is placed at 39,200 and once taken out will see further short covering towards the 40,000 level on the upside.

Caution prevailed in the market ahead of monthly expiry on Thursday, while key benchmark indices eked out modest gains and shrugged off weak sentiment across most of Asian and European markets.

Gains were muted as investors preferred to stay on the sidelines ahead of the Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium this Friday. Technically, post sharp reversal formation, the Nifty is witnessing a range bound activity, while on intraday charts it has formed a higher bottom formation which supports the continuation of a pullback rally in the near future.

For traders, 17500 would be the sacrosanct support zone and above which, the index could rally till 17700-17750. On the flip side, the bullish sentiment could change if the index trades below 17500 and below the same the index could retest 17400-17350 level.

With the ongoing spike in natural gas prices in Europe, there is increasing recognition of a synchronized recession in EU, US and China in the rest of CY22 – as a result, currency market volatility has been dictating the macro flow picture for equities too.

FPI flows were constructive till last week but have now started turning negative and are best reflected in build-up of short interest in index futures. Retail have been on the sidelines, and did not participate in the previous rally, can be expected to start providing buying support to Nifty around its 50-week moving average at 17150.

IT remains most vulnerable to further earnings downgrades stemming from a global recession, while a renewed rally in commodities like natural gas, coal and crude would be negative for downstream sectors like Cement & Consumer durables. Banking sector remains most resilient but is also the consensus overweight sector for domestic as well as foreign institutions.

Bulls and bears continued to battle it out in the domestic market as weak global cues persisted, keeping the market under pressure.

The US economy contracted amid muted demand conditions with the service sector witnessing a sharp decline. Markets in Europe experienced a protracted sell-off as a result of investor's concern over the oil crisis and the uncertain growth outlook.

Indian rupee ended at 79.81 per dollar on Wednesday against Tuesday's close of 79.86.

: Benchmark indices ended with marginal gains in the volatile session on August 24.

At Close, the Sensex was up 54.13 points or 0.09% at 59085.43, and the Nifty was up 27.50 points or 0.16% at 17605. About 2076 shares have advanced, 1259 shares declined, and 131 shares are unchanged.

Apollo Hospitals, IndusInd Bank, ONGC, NTPC and ICICI Bank were among the major Nifty gainers.

The losers included BPCL, Tata Steel, Divis Laboratories, Sun Pharma and TCS.

Among sectors, realty index added 1 percent and bank, capital goods and metal indices up 0.5 percent each.

BSE midcap and smallcap indices rose 0.5 percent each.

The board of directors of Bharat Geares, in its meeting heldon Wednesday, August 24,2022,considered and approved the issue of bonusshares to the members of the company by way of capitalization of reserves in the ratioof 'L:2 i.e. issue of 1 (One) Equity Share for every 2 (Two) equity shares held by themembers.

Bharat Gears was quoting at Rs 182.10, up Rs 3.95, or 2.22 percent.

Lupin has received approval from the United States Food and Drug Administration (FDA) for its Abbreviated New Drug Application (ANDA), Formoterol Fumarate Inhalation Solution, 20 mcg/2 mL per Unit-Dose Vial, to market a generic equivalent of Perforomist® Inhalation Solution, 20 mcg/2 mL, of Mylan Specialty, L.P.

Lupin was quoting at Rs 676.80, down Rs 18.60, or 2.67 percent on the BSE.

The initial public offering (IPO) of DreamFolks Services, a dominant player in the airport lounge aggregation industry in India, got a good response from retail investors on August 24, the first day of bidding.

By afternoon, retail investors had bid 6.4 times the portion set aside for them. Bids had came in for 1.25 crore equity shares against an offer size of 94.83 lakh shares.

The IPO had been subscribed 1.32 times, data available with exchanges show. The issue size was reduced to 94.83 lakh shares from 1.72 crore shares after the company raised Rs 253 crore through its anchor book on August 23.

Non-institutional investors had bid for 59 percent of the shares set aside for them, while qualified institutional buyers bought 9,108 equity shares against their quota of 51.72 lakh shares.

Crude oil October futures breached USD 95 to trade at two weeks high during European morning hours. The prices rose 3.4% on Tuesday amid warning from OPEC oil minister to act to balance the market.

Supply issue surfaced from Kazakhstan due to damaged moorings, which could possibly disrupt supplies for a month. API forecast a larger draw of 5.6 million barrels of US commercial reserves which has also been pushing prices higher today.

SPR reserves in US looms lowest since 1985 and the distillates stocks are now 23% below the 5-year average for this time of year.

Macro-economic factors indicate slowdown in crude oil demand from three of the major consuming zones of China, US and Eurozone amid contraction in manufacturing and industrial activities. The composite PMI in Eurozone have slide to 26 months low.

As for the day we see crude oil prices continue to carry the bullish momentum and larger drop in EIA weekly inventories will push prices to test the resistance of USD 98 while support remain around USD 90.