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Last Updated : Feb 18, 2020 08:47 AM IST | Source: Moneycontrol.com

Market Headstart: Nifty likely to consolidate further; avoid long positions for now

The index closed below 12,050 levels and formed bearish candle for the third straight session as closing was lower than opening value.


Nifty50 is likely to consolidate further on February 18 and may even retest 12,000 levels tracking muted trend seen in other Asian markets.

Nifty futures on Singapore Exchange traded in the red, indicating a negative start for the Indian market. Around 08:30 hours, SGX Nifty was 29.50 points, or 0.24 percent, down at 12,043.50.

Close

Indian market edged lower despite positive global cues on February 17 after Moody's Investors Service has cut India’s 2020 Gross Domestic Product (GDP) growth forecast to 5.4 percent from 6.6 percent.

At the same time, it has cut the 2021 GDP growth forecast to 5.8 percent from 6.7 percent. Weakness across global economy due to the impact of the novel coronavirus outbreak could hurt India’s recovery, Moody's said.

World markets inched higher on hopes of further policy stimulus from China to counteract the economic hit from a coronavirus outbreak calmed nervous investors.

Finance Minister Nirmala Sitharaman will meet industry bodies on Tuesday to asses the impact of the coronavirus outbreak on Indian trade and businesses. The virus outbreak in China has claimed nearly 1,500 lives and infected over 60,000, said a report.

Moody’s was one big factor that fuelled uncertainty on the D-Street. Experts are of the view that investors should avoid creating long positions at the current juncture and wait for a breakout above 12,300 or a breakdown below 11,800 levels.

Also, fears over banking exposure to the telecom sector after SC verdict on AGR liability and continuous rise in coronavirus cases also dented sentiment on Monday.

A report suggested that the payment of adjusted gross revenue dues of Rs 1.20 lakh crore by telcos will reduce the fiscal deficit for 2019-20 to 3.5 percent of the GDP from the revised estimate of 3.8 percent of the GDP, economists at SBI said on Monday.

The Indian rupee appreciated by 8 paise to settle at 71.29 against the US dollar on Monday, helped by some moderation global crude prices.

On the institutional front, FPIs were net sellers in Indian markets for Rs 374 cr while the DIIs were net sellers to the tune of Rs 154 cr, provisional data showed.

Big News:

Securities and Exchange Board of India (SEBI) announced a number of steps to regulate financial markets, including asking investment advisors and distributors of financial products to segregate their services. Fees for such services will also be streamlined.

The proposed changes are aimed at bringing clarity in payment of fees and the introduction of an upper limit on fees charged to investors.


SEBI will also introduce enhanced eligibility criteria for registration as an investment advisor including for networth qualification and experience. There will be a provision for grandfathering existing individual advisers.Pure-play distributors such as bank relationship managers etc whose job is to help execute such transactions will not be allowed to call themselves “financial advisors” or “wealth manager” unless they are registered with SEBI as investment advisors.

Stocks in news:

The board of Vodafone Idea February 17 authorised the immediate payment of Rs 2,500 crore to the Department of Telecommunications (DoT) as a portion of the Adjusted Gross Revenue (AGR) dues.

With the government coming down heavily on telcos after the Supreme Court's rap, Bharti Airtel on Monday said it has paid Rs 10,000 crore to the telecom department towards statutory dues.

CARE Ratings on February 17 downgraded its rating of Vodafone Idea's Non-Convertible Debentures (NCDs) and long-term bank facilities.

Technical view:

Nifty50 fell for the third consecutive session and continued to trade below its 50-day moving average amid economic growth concerns after Moody's cut FY20 GDP growth forecast to 5.4 percent (from 6.6 percent earlier).

Fears over banking exposure to the telecom sector after SC verdict on AGR liability and continuous rise in coronavirus cases also dented sentiment.

The index closed below 12,050 levels and formed bearish candle for the third straight session as closing was lower than opening value.

Considering the consistent weakness after the recent rally, experts advised traders to avoid long positions for the time being.

Three levels: 12,037 | 12,158 | 12,226

Maximum call OI: 12,500 | 12,300

Maximum put OI: 12,000 | 11,800

Technical Recommendations:

We spoke to Religare Broking and here’s what they have to recommend:

Dr. Reddy's Laboratories | Buy | LTP: Rs 3,293.60 | Target : Rs 3,380 | Stop loss: Rs 3,230 | Return 2.6%

Cipla | Sell | LTP: Rs 431.70 | Target: Rs 415 | Stop loss: Rs 450 | Downside: 4%

NTPC February Futures | Sell | LTP: Rs 110.25 | Target: Rs 104 | Stop loss: Rs 117 | Downside 6%

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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 Feb 18, 2020 08:25 am
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