Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services
Indian Equities wilted under global pressure and gave up all its weekly gains. Nifty plunged by 380 points during the day and closed with loss of 347 points at 17,531 levels. The index failed to sustain above key 17,777 levels, indicating overall weakness in the market. India VIX spiked by 7.8 percent to near 20 levels, indicating increased volatility in the market. Going forward, we expect this trend to continue until the clarity emerges on the quantum of the rate hike being taken by US Fed next week.
Kunal Shah, Senior Technical Analyst, LKP Securities
Bank Nifty witnessed some profit booking at higher levels after being an outperforming index. The index will resume its uptrend, once it closes above the level of 42,000 where a significant amount of call writing has been witnessed. The downside support stands at 40,000-39,800 and any dip toward that would be an opportunity to buy.
Suvodeep Rakshit, Senior economist, Kotak Institutional Equities
Inflation prints over the coming months are expected to remain elevated albeit moderating gradually to below MPC’s upper threshold of 6 percent in 4QFY23. With the MPC expected to continue with rate hikes, the lagged impact of monetary tightening will help curb inflation expectations. Accordingly, we expect the average CPI inflation trajectory to be lower than the RBI’s estimates by around 60 bps in 1HCY23. We maintain our FY2023E CPI inflation estimate at 6.5 percent.
We retain our view that the MPC will continue with calibrated repo rate hikes towards 6 percent by end-CY2022 with 35 bps hike in the September policy along with the shift in the operating target from SDF to repo rate by end-FY2023.
Vinod Nair, Head of Research, Geojit Financial Services
With persistent bearish pressure from global stocks amid rising yields and dollar index, the domestic market surrendered to the global trend despite its strong decoupling scenario and encouraging macroeconomic data. Post the release of US inflation data, which showcased a MoM increase in inflation, the global market has been pricing in the likelihood of a more aggressive policy response from the Fed.
Rupak De, Senior Technical Analyst, LKP Securities
Nifty slipped below the falling trend line on the daily chart suggesting a waning bullishness. On the daily timeframe, the index has fallen below the near-term moving average, 20 EMA. The momentum oscillator is in bearish crossover and falling. The trend for the near term looks negative; immediate support is seen at 17,500, below which the Nifty may fall towards 17,350. On the higher end, resistance is visible at 17,700.
Ajit
Mishra, VP - Research, Religare Broking LtdMarkets witnessed a sharp sell-off on the final day of the week and lost close to 2 percent. Nifty gradually inched lower after opening with a down gap and settled closer to the lower band of the day’s range to close at 17,530.85 levels. The selling pressure was widespread wherein IT, realty and auto pack were among the top losers.
The last two days of slide in the index have completely engulfed the gains of the previous week and a decline below 17,500 in Nifty may result in a further slide. We thus recommend maintaining a cautious stance and limiting positions. Among the sectoral pack, banking is still looking comparatively stronger so participants can continue with “buy on dips” in private banking names.
Sensex ends almost 1100 points lower; only two stocks end in green
Rupee At Close | Rupee ends at 79.74/$ versus Thursday’s close of 79.70/$
Markets this week
Benchmark indices reversed last week gains and closed 1.7 percent lower each. But, Nifty Bank managed to rise for the fourth consecutive week, gaining nearly 1 percent.
35 of 50 Nifty stocks ended the week with cuts as IT & cement stocks were the top drags. Astral,IndiabullsHousing Finance, Intellect Design and L&T Tech were the topmidcaplosers.
Markets at close
Sensexdeclined 1,093.22 points or 1.82 percent to end at 58,840.79. Nifty ended 346.60 points lower at 17,530.80.About 952 shares have advanced, 2455 shares declined, and 100 shares were unchanged.
Among sectors, IT and realty shed over 3 percent. Midcap and smallcap indices shed nearly 2.5 percent.IT & auto stocks were major drags with Tech Mahindra, Infosys andM&M among top losers on the exchanges.
Anuj
Choudhary, Research Analyst, Sharekhan by BNP ParibasUSDINR (CMP Rs 79.78 spot): Indian rupee depreciated 0.03 percent today on weak domestic markets and a strong US Dollar. Domestic markets were down ~1.6 percent. US Dollar is trading 0.3 percent higher at 110.01 on expectations of ahawkish US Federal Reserve.
We expect Rupee to trade with a negative bias on strong dollar and risk aversion in global markets. Concerns over aggressive rate hike expectations by Federal Reserve may also put downside pressure on Rupee.However, easing crude oil prices may support Rupee at lower levels. Markets may also take cues from FII fund flows data. USDINR spot price is expected to trade in a range of Rs 79 to Rs 80.50 in next couple of sessions.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Nifty lost around 1% in the past week. The Indian markets posted small losses on relative basis on hopes of continued growth momentum, even as global and domestic data prints were adverse with elevated inflation reported across major economies.
IT services and oil & gas were the top losers in the week, while metals, banks and autos were the top gainers among major sectors. Going forward, D-street will focus on the macro trends. TheFIIshave been on a buying spree and have bought over Rs 12,764 crore of equity so far in September. The continuousFIIbuying has been a major contributor to the current rally.
In International news, US inflation data for August came at an unexpected 8.3 percent, the Dow Jones Industrial Average index fell sharply by 3.94 per cent on Tuesday, its worst fall since June 2020. Initial jobless claims came in better than expected, but import prices saw a smaller drop than estimates suggested. Manufacturing data also showed a slowing economy.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
On Gold
Prices traded lower with spot gold at COMEX trading 0.45 percent down near $1655 per ounce on Friday. Gold October future contract at MCX were trading 0.67 percent lower near Rs 49,000 per 10 grams by noon session.
We expect gold prices to trade sideways to down for the day with COMEX spot gold support at $1640 and resistance at $1675 per ounce. MCX Gold October support lies at Rs 48,700 and resistance at Rs 49,200 per 10 grams.
On Crude Oil
Crude Oil prices traded lower with benchmark NYMEX WTI crude oil down 0.19 percent near $84.94 per barrel on Friday. We expect crude oil prices to trade sideways to down with resistance at $89 per barrel with support at $82 per barrel. MCX Crude oil September contract has important support at Rs 6650 and resistance at Rs 6890 per barrel.
India VIX spikes 7 percent amid volatility
Navneet Damani, Senior VP – Commodity Research, Motilal Oswal Financial Services
Gold caved under pressure from aggressive rate hike expectations as the U.S. dollar and Treasury yields climbed. A continuous selloff has been seen in gold and silver ETFs which is also hurting the overall sentiment.
Today, focus will be on Michigan inflation expectations. Broader trend on COMEX could be in the range of $1640-1705, and on domestic front, prices could hover in the range of Rs 49,000 – 49,700.
CSB Bank announces the appointment of Pralay Mondal as new Managing Director and CEO of the bank; stock up 3 percent
Sensex crashes 1000 points; only IndusInd Bank and Cipla trade in green
Spandana Sphoorty's board to consider fund raise on September 21
Happiest Minds Technologies announces commissioning of a 183kWp Solar Power Plant at its Smiles 2 campus in Madivala, Bengaluru
The 183 kWp solar power plant deployed by EcoSoch Solar will generate 256 MWh of electricity per year and is estimated to reduce 210 MT of carbon emissions annually and 5200 MT over its lifecycle.
Shilpa Medicare gets tentative US FDA nod for Tenofovir Alafenamide tablets, used for treatment of chronic Hepatitis B virus infection
European markets slide 1%
Following global cues, European markets too are trading lower. The pan-European Stoxx 600 fell 1.1 percent, with all sectors in the red. U.K.’s FTSE 100 was down 0.4 percent, Germany’s DAX down 1.19 percentand France’s CAC 40 fell 0.95 percent in the opening session.
Patanjali Foods' five-year plan fails to enthuse D-Street
Vision 2027
-Expect Patanjali’s Group turnover to reach Rs 1 lakh crore in next 5 years
-Will list Patanjali Ayurved, Patanjali Medicine, Patanjali Wellness & Patanjali Lifestyle
-Target is to set up 1 lakh Patanjali Wellness centers
Holcim closes India divestment: Adani Group has acquired Holcim's full stakes in Ambuja Cement and ACC
Holcim has closed the sale of its business in India to the Adani Group, comprising its full stakes in Ambuja Cement at a share price of Rs 385 and in ACC at a share price of Rs 2,300, resulting in cash proceeds of $ 6.4 billion for Holcim.
“This transaction strengthens Holcim's balance sheet and enables the company to continue its acquisition strategy, building on recent investments of over CHF 5 billion in Solutions & Products,” the company said in a press release.
Tata Metaliks gains 2.5 percent
The company announced that Phase-I of expansion project of Ductile Iron (DI) pipe plant at Kharagpurhas been inauguarated. This Rs 600 crore expansion project will take the company’s Ductile Iron Pipe plant capacity to over 4 lakh tonnes per annum in two phases.
Zydus receives tentative approval from the USFDA for Sugammadex Injection, used to reverse the effects of muscle relaxants
United Breweries Large Trade | 3.67 lakh shares worth Rs 60.59 crore change hands at Rs 1,650.5 per share
Enforcement Directorate freezes Rs 46.66 crore held in merchant accounts of Paytm, Cashfree, Easebuzz and Razorpay; Paytm down 3 percent in trade
Nifty IT down 2.3 percent; Tech Mahindra, Infosys, TCS top losers
MC Exclusive | Manforce condoms maker Mankind Pharma files papers for $700 mn plus IPO; one of the biggest ever in sector
In 2015, Capital International had purchased a 11 percent stake in Mankind Pharma from ChrysCapital for $200 million. In April 2018, a ChrysCapital-led consortium, which included GIC and CPPPIB, made…... Read More
Embassy Office Parks Large Trade | 86.7 lakh shares (1.1 percent equity) worth Rs 304 cr change hands at Rs 351 per share
Harsha Engineers International IPO final day | Issue subscribed 12 times, QIB portion booked 1.65 times
The initial public offering (IPO) of leading precision bearing cages manufacturer Harsha Engineers International continued to attract strong response from investors. The issue has been subscribed 12 times, garnering bids for 20.07 crore equity shares against offer size of 1.68 crore shares, as of 11 am on the final day of bidding.
The maximum response was seen from non-institutional investors, putting in bids 30 times the allotted quota, followed by retail investors subscribing 10 times the portion set aside for them.
UPL in focus; stock down 2 percent
The agrochemical company in joint venture with CleanMax Enviro Energy Solutions, a Mumbai-based renewable energy company, will establish a hybrid solar-wind energy power plant in Gujarat. The joint venture will set-up and operate a hybrid captive power plant with a capacity of 28.05 MW of solar power and 33 MW of wind power.
Nifty slips below 17,700. Take a look at the top losers
IndusInd Bank gains 3 percent after bank re-appoints Sumant Kathpalia as MD & CEO
Voda Idea decides to not convert FY18-FY19 deferred AGR dues into equity, as per sources; stock down 1.5 percent
PVR down 1.7 percent
Plenty Private Equity FII I has sold 7,62,499 equity shares (1.24 percent stake) in the company via open market transactions at an average price of Rs 1,877.14 per share, and Plenty Private Equity Fund I offloaded 10,76,259 shares (1.76 percent stake) at an average price of Rs 1,887.04 per share. They together held 6.02 percent stake in the company as of June 2022. Gray Birch Investment exited the company by selling 22,06,743 equity shares at an average price of Rs 1,871.18 per share
Vedanta, TCS among most active shares on the exchanges
Vedanta clarified on Thursday that the semiconductor plant will be with holding company Volcan Investments; stock down 6 percent
Infosys to announce Q2 earnings on October 13
Sensex opens 250 pts in the red, Nifty below 17,800; financials, metals, IT slide
Deepak Jasani, Head of Retail Research, HDFC Securities
Broad market continues to lag while largecaps seemed to be under mild selling pressure. 18,096-17,692 could be the band for the Nifty in the near term.
Rupee Check | Rupee opens at 79.80/$ versus Thursday’s close of 79.70/$
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services
The market has started showing some indications of fatigue. Globally, the major concern now is that the Fed might oversteer the economy and end up raising rates too much too fast, pushing the US economy into a sharp recession. There are talks of the terminal Fed rate rising to 4.25 percent. Sharply rising rates, rising bond yields and rising dollar are negatives for equity.
In this challenging environment, it would be difficult for India to sustain the decoupling from the global trend which has been a recent pattern in India. Moreover, FIIs have halted their sustained buying and have turned sellers, though this is not yet a trend. Investors may adopt a wait and watch attitude till the Fed meeting is over on 21st September. Bank Nifty continues to be strong.
Govt relaxes paid up capital rules for small companies
Earlier, definition of “small companies” under the Companies Act, 2013 was revised by increasing their thresholds for paid up capital from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” and turnover from “not exceeding Rs 2 crore” to “not exceeding Rs 20 crore”. This definition has, now, been further revised by increasing such thresholds for paid up capital from “not exceeding Rs. 2 crore” to “not exceeding Rs. 4 crore” and turnover from “not exceeding Rs. 20 crore” to “not exceeding Rs. 40 crore”.
Morgan Stanley on SBI Life
-Overweight call, Target at Rs 1,500 per share
-Management bullish on medium-term APE growth
-Strong FY23 APE growth guidance driving VNB margin expansion
-See VNB growth of more than 35 percent
-Non-par guaranteed products on a strong footing
Jefferies on Cipla
-Buy Call, Target raised to Rs 1,223 from Rs 1,144 per share
-Company’s upcoming launches and pipeline look strong
-Inhalers and peptides are less chartered territories by generics where Cipla has US filings
-Revise FY24 EBITDA margin to 24.2 percent from 23.3 percent
-Primarily factoring growth from key product launches
CLSA on Asian Paints
-Underperform call, Target at Rs 3,420 per share
-Demand setting remains firm, with festive season supporting momentum
-Margin recovery is likely as raw material prices are likely to ease
-Capex of Rs 700-750 cr required for FY23 and FY24 each
-Looking to drive contribution from home decor to 10 percent from 3 percent over next 10 years
Godrej Properties achieves sales of over Rs 1,200 crore from two project launches in Mumbai
IMF sees further global economic slowdown in third quarter
Downside risks continue to dominate the global economic outlook and some countries are expected to slip into recession in 2023, but it is too early to say if there will be a widespread global recession, IMF spokesman Gerry Rice said on Thursday.
