Closing Bell: Nifty ends below 17,900, Sensex falls 433 pts dragged by auto, bank, realty

Taking Stock: Bears Tighten The Grip; Nifty Ends Below 17,900, Sensex Falls 433 Pts

The BSE midcap and smallcap indices fell 0.5 percent each.... Read More

Markets underwent profit-taking for the third straight session as benchmark Nifty comfortably broke the intraday support of 17900, which is broadly negative. Technically, the index has formed a bearish candle and it is currently trading near 50-day sma following the sharp intra-day correction.

The intraday texture of the market is weak but strong possibility of a pullback rally is not ruled out if it succeeds to trade above 50 day SMA or 17750. For day traders, 17750-17800 would be key support levels, and as long as the index is trading above the same, bullish sentiment will be intact. On the flip side, below 17750, it could trigger short term weakness and we may see a quick intraday correction up to 17700.

The Nifty opened on a negative note on November 11 & witnessed follow through selling subsequently. On the way down, it breached a rising trendline on the hourly chart & went down to test the 40-day exponential moving average.

Selling was absorbed near the key short term moving average & the index recovered to some extent thereon. The level of 17800 indeed acted as a crucial support & will continue to provide support going ahead.

As long as the index trades above 17800, it can once again take a leap towards 18000-18100. The daily chart shows that the Nifty is witnessing oscillations between the key daily moving averages & the short term consolidation is expected to continue further.

The Nifty respected the 17800 support and ended the session above it. We are currently around the lower end of the range which is 17700. The upper end is 18100.

We need to see if we either break 17700 or close above 18100. One of the two will allow the index to break out or break down from this range-bound movement. Until then it is best to sit on the sidelines and wait for a directional move.

Index showed selling pressure for the third consecutive session and closed a day at 17874 with a loss of nearly one percent. Index has shown some pullback after hitting a good demand zone of 17800 in last hour which hints 17800 will be first good support for coming session followed by 17700 zone.

Also any dip near said levels will be buying opportunity on the positional basis with keeping stop out level below 17600 zone.

The immediate hurdle is coming near 17940-18050 zone and above said levels one can expect a fresh breakouts.

Indian markets opened on a negative note following mixed Asian market cues and higher than expected inflation data reported in U.S. raising concerns of an earlier-than-expected hike in interest rates in the world's largest economy.

Also, continuous foreign fund outflows subdued traders’ sentiments.

Foreign institutional investors (FIIs) were stood as net sellers in the capital market, as they offloaded shares worth Rs 469.50 crore on Wednesday. They have sold equities worth Rs 5,515 crore so far this month. On sectoral front, almost all the indices traded in red barring Metals and Consumer Durables which were marginally positive.

Weak global cues led by rising CPI in the US spooked markets as fears of the FED being behind the curve seem to worry the street.

Back home most of the sectoral indices traded weak today but it is interesting to note that even on a weak day the street did reward companies with a positive earnings surprise, a key feature witnessed during the second-quarter earnings season.

Defence stocks saw good investor interest today given the size of the opportunity in the 'Atmanirbhar Bharat' Theme.

Global inflationary pressure following upsetting US inflation data forced the domestic market to trade with deep cuts. Beating the market estimates, US inflation hit a 30-year high level of 6.2% YoY adding fears of an earlier than expected rate hike, while US bond yields shot higher.

Rising inflationary pressure along with prospects of an early rate hike can keep the domestic market on edge as such indicators tempt foreign investors to pump out liquidity from emerging markets like India.

Benchmark indices ended lower for the third consecutive session on November 11 on the back of weak global cues.

At close, the Sensex was down 433.13 points or 0.72% at 59,919.69, and the Nifty was down 143.60 points or 0.80% at 17,873.60. About 1398 shares have advanced, 1769 shares declined, and 139 shares are unchanged.

IOC, Tech Mahindra, SBI, ONGC and SBI Life Insurance were among the major Nifty losers, while gainers were Titan Company, Hindalco Industries JSW Steel, M&M and Reliance Industries.

Among sectors, Bank, FMCG, auto, IT, pharma and realty indices fell 1-2 percent, while metal index ended in the green. The BSE midcap and smallcap indices fell 0.5 percent each.

Bank of Baroda remains well-capitalised with standalone bank CET 1 of 11.4% and easing asset quality stress, which is expected to accelerate growth. This should drive up margins, which, coupled with lower LLP, should lead to gradual improvement in its RoE trajectory to 10-12% over FY23-24E from a low of 1% in FY21.

Retain buy with a revised target price of Rs 130, based on 0.8x Dec’23E ABV. The Key risks are higher NPA formation, mainly in the corporate/SME book; and slower-than-expected growth trajectory.

The initial public offering of Sapphire Foods, YUM’s largest franchisee operator in the Indian subcontinent in terms of revenues for FY20, has been subscribed 5.43 times, so far, on November 11, the final day of bidding, garnering bids for 5.24 crore equity shares against offer size of 96.63 lakh equity shares.

Qualified institutional buyers have bought 6.16 times of the shares set aside for them, while the reserved part of non-institutional investors was subscribed 2.16 times.

Retail investors have put in bids 8.13 times the portion reserved for them.

The public issue of Latent View Analytics, a data analytics services provider, continues to see strong demand from investors, subscribing 17.86 times on the second day of bidding, November 11, as it received bids for 31.30 crore equity shares against IPO size of 1.75 crore equity shares.

As per the subscription data, retail investors bought shares 59 times the portion set aside for them, and the portion reserved for employees was subscribed 1.91 times.

Qualified institutional buyers have put in bids for 99 percent of shares reserved for them, and a part set aside for non-institutional investors saw 25.5 times subscription.

Nykaa has had a stellar debut in a bull market. The choice for IPO investors lucky to get allocation in Nykaa, on whether they should hold or exit the stock won’t be easy. It’s the only startup that has shown profits, unlike Zomato or Paytm where there is no visibility or clear time horizon on this aspect.

The real challenge for the company now is to grow aggressively with improve margins. As a multibrand aggregator, and being a platform business, there is definitely potential to achieve both. That said, at these valuations, it beats a lot of established monopolies and the margin of safety in valuations is non- existent.