Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Bullish momentum continued today and both benchmark indices touched fresh highs but investors showed signs of nervousness as the market witnessed a late bout of profit-taking towards the closing stages.
Technically, benchmarkNifty maintained uptrend continuation formation which is broadly positive but due to temporary overbought situation, bulls may prefer to take a cautious stance near the 17,800 resistance level.
For Nifty, 17,700 would be the immediate resistance level traders will have to look at, and below the same, the correction wave is likely to continue up to 17,450-17,350 levels.
If the index trades above 17,700, the uptrend texture will continue up to 17,800-17,950 levels. Contra traders can take a long bet near 17,350 with a strict 17,300 support stop loss.
Meanwhile, Bank Nifty has formed a strong bullish formation and the structure suggests further upside if it succeeds to trade above 37,000.
Vinod Nair, Head of Research at Geojit Financial Services
Despite a strong opening, domestic indices gave up early gains to trade flat driven by profit-booking and mixed global sentiments. PSU Banks were heavily wounded by profit-booking although the government approved a guarantee of Rs 30,600 crores to the National Asset Reconstruction Company Ltd with an aim to clean stressed assets from the banking sector. Global markets traded cautiously bracing for the Fed Reserve and Bank of England policy meetings next week.
Closing update:
Market benchmarks the Sensex and the Nifty snapped their 3-day winning run on September 17 as investors booked profit after a stellar record-setting spree in the market.
Sensex closed 125 points, or 0.21 percent, lower at 59,015.89 while the Nifty finished at 17,585.15, down 44 points, or 0.25 percent.
BSE Midcap index fell 1.14 percent and the smallcap index closed with a loss of 1.06 percent.
Nifty PSU Bank index has cracked more than 3%
More than 250 stocks hit their upper circuits:
More than 250 stocks, including Coffee Day Enterprises, Jindal Poly Investment and Finance Company, Grand Foundry, California Software, Sical Logistics, MRO-TEK Realty, Rohit Ferro Tech and Lancer Container Lines, hit their upper circuits in intraday trade on BSE.
More than 225 stocks hit fresh 52-week highs:
More than 225 stocks, including Axis Bank, Bajaj Finserv, Bajaj Finance, Larsen & Toubro, SBI and Titan, have hit their fresh 52-week highs in intraday trade on BSE on September 17.
Sensex has erased all gains and slipped into the red.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
: Crude oil prices traded steady with benchmark NYMEX WTI crude oil prices were trading near $72.50 per barrel for the day. MCX Crude oil September futures were trading marginal down near Rs 5,320 per barrel by noon.
Crude oil prices are expected to trade sideways to down for the day with resistance at $74 and support at $70 per barrel. MCX Crude oil September has support at Rs 5,240 and resistance at Rs 5,380.
IIFL Finance stock hits lower circuit
IIFL Finance share price hit 5 percent lower circuit on BSE after CDC Group sold stake in the company. UK-based development finance institution CDC Group Plc sold a 3.95 percent equity stake in financial services company IIFL Finance via open market transactions on September 16. The stock corrected 4.69 percent to settle at Rs 294.50.
CDC Group has offloaded shares through transactions, selling 50 lakh equity shares in the company at Rs 295.47 per share on the NSE and 1 crore shares at Rs 294.52 per share on the BSE, the bulk deal data showed.
Market update at 2 PM: Sensex is up 129.28 points or 0.22% at 59270.44, and the Nifty added 19 points or 0.11% at 17648.50. Kotak Mahindra Bank and Bajaj Finserv are the top gainers while IRCTC and Tata Steel are the most active stocks.
JM Financial announces Tranche I public issue of upto Rs 500 crore of secured, rated, listed, redeemable non-convertible debentures
: JM Financial Products Limited, the flagship NBFC arm of the JM Financial Group, announced Tranche – I public issue of Secured NCDs of face value of Rs 1,000 each. The stock was trading at Rs 89.65, down Rs 1.75, or 1.91 percent. It has touched an intraday high of Rs 92.90 and an intraday low of Rs 89.20.
L&T Infotech joins Rs 1 lakh crore market cap club
Larsen & Toubro Infotech, a part of L&T group, has joined the elite club of Rs 1 lakh crore market capitalisation on September 17 after showing multibagger returns in last one year. With this, now this would be sixth IT company to have market cap in trillion after TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra.
Healthy earnings growth, strong revenue visibility due to orderbook, increase in digital opportunities after Covid-19 pandemic which a key catalyst for the exponential growth of the Indian IT industry etc pushed the IT stocks higher including L&T Infotech that hit a market capitalisation of Rs 1,00,684.67 crore.
eClerx Services approves share buyback worth Rs 303 crore
Market update at 1 PM:
Sensex is up 36.86 points or 0.06% at 59178.02, and the Nifty shed 10.10 points or 0.06% at 17619.40. Kotak Mahindra Bank, Bajaj Finance and Bajaj Finserv are the top gainers while Tata Steel and SBI dragged the most.
Among the sectors, PSU Bank and metal indices shed over 3 percent each while the midcap and smallcap indices are down a percent each.
Credit Suisse sees 28% upside in Zee Entertainment
: Zee Entertainment Enterprises share price added over 2 percent intraday after its two biggest investors sought the ouster of three directors, including CEO Punit Goenka, in a bid to recast the board, a move hailed by analysts.
Global research firm Credit Suisse has upgraded the stock to outperform from neutral and has raised target to Rs 320 from Rs 215 per share. Zee is mandated to hold an EGM 45 days after receipt of shareholder request while delay in convening the EGM could create uncertainty.
Likhita Chepa, Senior Research Analyst, CapitalVia Global Research
: The Indian benchmark indices started with a gap up after the positivity in global sentiments. Indian shares scaled record highs today as banking stocks extended gain from the previous session after the country’s finance minister laid out details for the establishment of a bad bank. Traders may get support as the Reserve bank of India said the inflation trajectory is coming down faster than anticipated.
17,650 is an important level in the market. If the market sustains above 17,650, we can expect the market to trade till the level of 17,850-17,900. Technical indicators also support positivity in the market.
Nifty PSU Bank shed over 3 percent dragged by Bank of Maharashtra, Indian Overseas Bank and PNB
Market update
Sensex is up 117.09 points or 0.20% at 59258.25, and the Nifty added 10.30 points or 0.06% at 17639.80. Bajaj Finserv and Kotak Mahindra Bank are the top gainers while Tata Steel and SBI are the top losers.
Among the sectors, metals and PSU Bank shed over 3 percent each while the midcap and smallcap indices are down 1 percent each.
Coronavirus Update
India saw a single-day rise of 34,403 new COVID-19 infections while the active cases have further declined to 3,39,056, according to Union health ministry data updated on Friday. The active cases now comprise 1.02 percent of the total infections, while the national COVID-19 recovery rate has been recorded at 97.65 percent, it said. The daily positivity rate has been recorded at 2.25 percent. It has been less than three percent for the last 18 days, according to the data.
IDFC Board approves initiating steps to divest mutual fund business
The Board of directors of IDFC Limited and IDFC Financial Holding Company Limited at their meetings held on September 17, 2021, have considered and approved to initiate steps to divest its mutual fund business subject to requisite regulatory approvals, as applicable. The Boards have authorised respective strategy &
investment committees to take necessary steps, including appointment of investment banker, for the same. The stock was trading at Rs 57.90, up Rs 0.10, or 0.17 percent. It has touched an intraday high of Rs 60.90 and an intraday low of Rs 56.15.
Motilal Oswal Financial Services on NARCL
: The Finance Minister on September 16, 2021 said the Union Cabinet has cleared the formation of a National Asset Reconstruction Company (NARCL), or bad bank. Along with NARCL, it also approved the setting up of an Indian Debt Resolution Company. In order to encourage banks and promote the bad asset resolution process, it approved a Central Government Guarantee of up to Rs 30,600 crore to back the Security Receipts (SR) that will be issued by the NARCL. This guarantee is provided for up to five years.
We view this as a positive development as the focus remains on faster resolution of stressed assets. This will improve the balance sheet of banks, and the upfront cash payment would also aid in providing incremental cash flows. It will enable banks to focus more on their core operations. PSU and private banks such as ICICI Bank, Axis Bank, and YES Bank are likely to be the key beneficiaries.
Sensex is up about a percent.
Credit Suisse On NARCL
The government announced the acquisition of the first tranche of Rs 90,000 crore NPAs from banks to NARCL. NPAs being transferred in the first phase are mostly already fully provided assets.
Rs 2,400 crore cash recovery translates only to 2-15 percent of FY21 PBT. Eventual recovery, including security receipts (SRs), equates to 2-7 percent of net worth and 1-5 percent of m-cap for PSBs. The floor rate of recovery at an average of over 18 percent is medium-term positive.
We continue to like SBI amongst PSBs and prefer large private banks such as Axis Bank, ICICI Bank and HDFC Bank.
Kotak Securities on NARCL
The government has announced a guarantee scheme on the investment receipts issued by the National Asset Reconstruction Company (NARCL), which can make the security receipts a transferrable instrument.
We are quite closer to the formation of the bad bank. The NPLs (written-off or otherwise) exchanged for security receipts are fully provided but we don’t expect banks to reverse provisions.
Faster resolutions of some of the bad loans and senior management bandwidth release to solve these bad loans are probably the best possible outcomes of the formation of NARCL.
These stocks are witnessing an increase in open interest along with an increase in price:
An increase in open interest along with an increase in price mostly indicates long positions being built up, except for very weak stocks where some traders may short the stock on a rally.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The Nifty has opened in fine fettle and has achieved the immediatetarget of 17,750. A pause at the current levels cannot be ruled out. However, if we can sustain these levels, traders can accumulate long positions on intraday corrections for a new target of 17,950. The market has good support at 17,500.
Market update at 10 AM:
Sensex is up 427.72 points or 0.72% at 59568.88, and the Nifty jumped 114.50 points or 0.65% at 17744. Bajaj Finance and Bajaj Finserv are the top gainers while Adani Transmission and IRCTC are the most active stocks.
Ravindra Rao,CMT, EPAT, VP- Head Commodity Research at Kotak Securities
: COMEX gold trades little changed near $1756/oz after a sharp 2.1% decline yesterday. Weighing on gold is upbeat US economic data which strengthened the case for Fed’s monetary tightening. However, supporting price is rising inflation concerns, persisting virus risks, concerns about the health of the Chinese economy and increased geopolitical tensions. ETF inflows also showed some buying interest at lower levels however the pace was modest. Gold's sharp fall has dented market sentiment however we believe that market reaction to US data was exaggerated and price may stabilize near $1750/oz level.
Market at open: Sensex is up 281.23 points or 0.48% at 59422.39, and the Nifty added 79.70 points or 0.45% at 17709.20.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
: The market is now driven by momentum with valuations on the back burner. Even FIIs who were skeptical about valuations and sold heavily in July have come back strongly and are chasing the momentum. FIIs have invested Rs 5344 cr in the cash market during the last three days. Nifty has now appreciated by around 10000 points from the March 2020 lows. Even die-hard bulls would not have foreseen such a ferocious rally. Now the bulls are unlikely to let go off their grip on the market till 18000 on the Nifty/ 60000 on Sensex is reached.
In 2021, till date, the Nifty IT has been outperforming the Nifty while Bank Nifty has been underperforming. There is a possibility of change in leadership of the market away from IT, perhaps to banks. The announcement of the 'bad bank' road map and govt guarantees for security receipts to be issued by the NARCL will improve the prospects of banks, going forward.
Buzzing Stocks: Infosys, SBI, Hero Moto, Easy Trip Planners and other stocks in news today
Sebi mulls carving out separate AIF category to buy distressed loans from banks
Markets regulator Sebi is planning to carve out a separate category in Alternative Investment Funds (AIF) whereby such entities can purchase distressed loans from banks and NBFCs. Pointing out the growing number of AIFs, Sebi Chairperson Ajay Tyagi said on Thursday that the last financial year saw 90 new AIFs getting registered with the regulator under different categories, taking the total number to more than 700.
"This would unlock the capital of banks and NBFCs and make it available for fresh lending. A new sub-category of AIFs could be carved out for this purpose," he added. Acknowledging the pick-up in launching of ESG-themed schemes by mutual funds in India over past few years, Tyagi said the regulator, at present, is engaging with the industry about disclosing certain broad ESG-related parameters in respect of such schemes.
Oil prices
: Oil prices steadied on Thursday after hitting a multi-week high a day earlier as the threat to US Gulf crude production from Hurricane Nicholas receded. Brent crude ended the session up 21 cents, or 0.3%, at $75.67 a barrel. US West Texas Intermediate (WTI) ended the session unchanged at $72.61 a barrel.
Asian Markets
Shares in Asia-Pacific were mixed in Friday morning trade as investors react to mixed US economic data released overnight. The Nikkei 225 in Japan climbed 0.38% while the Topix index traded fractionally higher. South Korea’s Kospi shed 0.22%.
US Markets
: The S&P 500 ended slightly lower on Thursday, paring losses in late trading after unexpectedly strong retail sales data underscored the strength of the US economic recovery.
The Dow Jones Industrial Average fell 62.22 points, or 0.18%, to 34,752.17, the S&P 500 lost 6.65 points, or 0.15%, to 4,474.05 and the Nasdaq Composite added 20.30 points, or 0.13%, to 15,181.83.
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