Taking Stock | Bears Maul The Market As Sensex Dives 1,170 Points, Nifty Slips Below 17,500
If the Nifty remains below 17,500, weakness may stretch towards 17,250 and 17,000, Chandan Taparia of Motilal Oswal Financial Services has said... Read More
Ajit Mishra, VP - Research, Religare Broking:
Markets started the week with a sharp cut and lost nearly two percent, tracking weak cues. Initially, the news of the Reliance-Armanco deal cancellation didn’t go well with the participants and sentiment further deteriorated with a continuous decline in the banking heavyweights which cascaded to other sectors as well. Among the benchmark indices, Nifty settled at 17416.55 levels; down by 1.96%.
Participants were already in a cautious mood, citing the feeble global cues like US inflation concern and the rise in the COVID cases and the recent domestic developments have further soured the sentiment. Indications are pointing towards further slide in the Nifty and the next major support is at 17,100 zone. Participants should align their positions accordingly while keeping a check on leveraged positions.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty opened on a positive note only to face a fresh round of selling near 17800. Thereon the selling pressure aggravated as the day progressed. As a result, the Nifty breached the swing low of 17613 & tumbled down sharply.
On the downside, it tested lower end of a falling channel, which was near 17300. The selling pressure was absorbed near the lower channel line from where the bulls got some breathing space towards the end of the session. As a result of the steep decline, the hourly momentum indicator has been pushed into the oversold zone & has developed a positive divergence over there. Thus unless today’s low of 17280 breaks, the Nifty can attempt a bounce to test its key hourly moving averages near 17700.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
There was wide-spread selling in the market and the Sensex crashed over 1,600 points intra-day, which shows temporary hiccups could be seen in near term. Benchmark Nifty opened below the 50-day SMA and quickly broke the 17700 support level.
On daily charts, the Nifty has formed a long bearish candle which is broadly negative. In the last five days, the market corrected over 900 points and hence there could be a possibility of a quick pull-back rally.
For day traders, 17350 would be the immediate intraday support level, and above the same a pullback rally may continue up to 17550-17600 levels. On the flip side, dismissal of 17350 could trigger one more round of correction till 17300-17240.
Mohit Nigam, Head - PMS, Hem Securities:
Markets ended the day with the corrections of nearly 2%. The day had many negative news which pushed for the correction. The latest debutant PayTM corrected further by trading 40% below its IPO price, weakening the investor sentiment.
The Nifty50 would take support at 17,200 while a mild resistance at 17,500. Though Bank Nifty is showing support at 36,700 and resistance at 38,300. The current correction is giving a good opportunity to all investors for a fresh investment in the markets.
Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers:
Indian markets opened on a negative despite mixed Asian market cues as China on Monday kept the one-year Loan Prime Rate (LPR) unchanged. During the afternoon session markets further drifted lower and traded at day’s low amid resurgence of coronavirus outbreaks in Europe and some other regions.
Also, adding to growing speculation traders feared that central banks could have to tighten monetary policy quicker to tame a spike in inflation.
Traders’ sentiments were impacted as foreign institutional investors (FIIs) continued to remain net sellers in the capital market. On sectoral front, almost all the indices were trading in red today.
Vinod Nair, Head of Research at Geojit Financial Services:
Subdued listing & continuation of weak trading of Paytm, India’s largest new generation fintech, is a big sentimental setback to the domestic market, which was thriving on the strong primary market. It will impact the inflow of money from the retail segment, which has been a key player during the year.
FIIs are also a seller due to fear of overvaluation of India compared to peers. Weak inflow from FIIs will possibly get higher due to the withdrawal of three agriculture farm acts which brings a stoppage to governments reformist agendas in context to coming state elections next year. It was a key factor for India to trade at a premium to EMs during the year.
Sachin Gupta, AVP, Research at Choice Broking:
There was a bloodbath in the market since the opening on Monday session; the benchmark index crashed almost 2% or 348 points in a day to close at 17416.55 levels while Bank Nifty fell by 2.5% to settle at 37128.80 levels. All the sectoral indices were in red led by Nifty realty, media, PSU bank & auto with almost 4% fall.
Technically, the Nifty index has confirmed Head & Shoulder Pattern breakdown on the daily chart and moved down from the neckline. Moreover, the index has also sustained below Lower Bollinger Band formation, which indicates a bearish trend for the coming day.
Furthermore, Stochastic & MACD has also witnessed a negative crossover on the daily timeframe, which suggests a bearish move in the index.
The Nifty has immediate support at 17,200 levels while resistance at 17,650 levels. On the other hand, Bank Nifty has support at 36300 levels and resistance at 38500 levels.
S Ranganathan, Head of Research at LKP securities:
Finally the bears got their act together after a long wait as a series of events over the weekend gave them the upper hand with almost all the sectoral indices barring the metal index plunging today.
The repeal of the agriculture laws had an impact on the PSU stocks while the O2C deal not going through left a 4.5% cut on Reliance.
Even as IPO investors come to terms with the reality, the inflationary impact on demand across several sectors continues to worry the street.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The markets broke 17600 and as expected saw a sharp move southward! 17200 is a support for the market and we came close to it and bounced thereafter.
The short-term trend has definitely been disrupted. If we continue this momentum, we can slide further to 16,850. The upside is now capped at 18,150-18,200 and until that is not crossed, we will be in a negative trend.
Market Close
: Benchmark indices fell 2 percent on November 22 amid weak global cues on the back inflation worries.
At Close, the Sensex was down 1,170.12 points or 1.96% at 58,465.89, and the Nifty was down 348.30 points or 1.96% at 17,416.50. About 842 shares have advanced, 2479 shares declined, and 157 shares are unchanged.
Bajaj Finance, Bajaj Finserv, ONGC, Tata Motors and Reliance Industries were among major losers on the Nifty, while gainers included Bharti Airtel, Asian Paints, JSW Steel, Power Grid and Hindalco Industries.
All the sectoral indices ended in the red with realty, healthcare, auto, oil & gas, and the PSU bank indices down 2-4 percent. BSE midcap and smallcap are down 2-3 percent.
Nirav Karkera, Head of Research, Fisdom
Current valuations seem to have priced in a fuller earnings recovery rather aggressively. With a large part of the festive and earnings season behind us, there are lesser triggers for an upside versus variety of looming factors to downside risks. From a macro standpoint, reports on deterioration of the public health situation, increased probability of liquidity rollback and emerging inflationary trends are dampening investor sentiments.
Getting closer to today's dip, re-evaluation of the index heavyweight RIL's deal with Saudi Aramco and continued selling pressure on shares of India's largest IPO PayTM are bearing heavy on indices. Most traders are perceiving the current pullback as an indicator for further downside, hence snowballing into a surge in short positions on large counters and broader indices alike. The perception of the moment seems to have also led to many investors taking some money off the table, albeit for a shorter period.
Fitch affirms State Bank of India at BBB-:
Fitch Ratings has affirmed State Bank of India's (SBI) Long-Term Issuer Default Rating (IDR) at 'BBB-'. The outlook is negative.
The agency has also affirmed the bank's Viability Rating (VR) at 'bb'.
In line with the updated Bank Rating Criteria, we have assigned SBI a Government Support Rating (GSR) of bbb-, it added
Mahesh Kumar, EVP & Head Capital & Commodities Market at Abans Group:
On Friday, gold prices fell drastically after hitting a recent high of 1879.50 on November 16th, and are presently trading at 1842.55, just below last week's low of 1844.42, owing to the strengthening of the dollar index.
Due to the deepening of the global epidemic, the US dollar index saw significant increases last week and received some safe-haven support. In addition, a drop in German bond yields has undermined the euro's interest rate differentials, strengthening the dollar. Due to hawkish comments by Fed Governor Waller, the dollar also extended its gains on Friday.
The 10-year German bund yield fell to a 2-month low of -0.343 percent on Friday, and is now trading at -0.340 percent, putting pressure on the euro and strengthening dollar index further.
Comments from Fed Governor Waller were negative for gold when he said, "the rapid improvement in the labor market and the deteriorating inflation data have pushed me towards favoring a faster pace of tapering and a more rapid removal of accommodation in 2022."
Gold prices, on the other hand, are likely to benefit from dovish comments from ECB President Lagarde . Even in the face of "unwelcome and painful" inflation, ECB President Lagarde said she is "confident" that inflation pressures will subside over time and that the ECB should not tighten monetary policy too quickly.
Gold prices, which fell as a result of the strengthening of the US dollar index, are expected to find immediate support at the 20-day EMA at $1832 and the 50-day EMA at $1810, while stiff resistance is expected around $1858 and $1872.
Nifty Energy index shed 3 percent dragged by the Reliance Industries, Tata Power, NTPC, IOC
Amit Gupta, Fund Manager – PMS, ICICI Securities
With the recent correction, markets have entered into consolidation phase where stock specific volatility can be utilized to form the equity portfolios. The stretched valuation segments are witnessing profit booking and money is flowing into value segments where earnings have started to grow after several earnings of stagnation.
Commodity prices in the international markets have started to cool off with HR Steel prices in China having corrected by 18%, Aluminum by 17% and Iron ore prices by 64% due to sluggish real estate demand in China, and thus lower Chinese imports. This should help to recover the margin pressure in some commodity user companies in India like Consumer stocks, etc.
Market at 3 PM
Market has recovered some of the intraday losses but still trading in the red with Nifty below 17400.
The Sensex was down 1,294.03 points or 2.17% at 58341.98, and the Nifty was down 382.00 points or 2.15% at 17382.80. About 709 shares have advanced, 2453 shares declined, and 131 shares are unchanged.
Go Fashion IPO issue subscribed 67.08 times on final day
The public issue of Go Fashion, which owns the brand Go Colors, had been subscribed 67.08 times by the morning of November 22, the third and final day of bidding. Investors put in bids for 54.19 crore equity shares against an offer size of 80.79 lakh units, as per the exchange data.
Retail investors have been active since day one of the bidding, buying shares 46.01 times their reserved portion, while the part set aside for non-institutional investors has been subscribed 139.34 times and that of qualified institutional buyers 37.97 times.
Go Fashion, which had a market share of around 8 percent in the branded women's bottom-wear market in FY20, opened its Rs 1,013.61-crore public issue for subscription on November 17. The price band for the offer has been fixed at Rs 655-690 a share.
Santosh Meena, Head of Research, Swastika Investmart:
Paytm is continuing its southward journey after listing on the back of liquidation by retail investors who were betting for listing gain however there is a lock-in period of 30 days for anchor investors. If we talk about the future outlook then it is still erratic because the market is not clear about its core business and timing of profitability.
Paytm comes out with exorbitant valuations where it was asking a market cap of Rs 1.4 lakh crore against the revenue of Rs 3000 crore means while Bajaj finserv which is an already listed fintech company with a proven track record of continuous profit and growth is trading at a market cap of Rs 2.9 lakh crore against revenue of Rs 63000 crore.
The market will watch how Paytm will use its strengths to enter into new businesses or create a moat and if it manages to emerge as a leader in a particular business then we can expect buying interest from lower levels otherwise it may take many years to reach its peak valuations.
I still have the same view that only very aggressive investors should stay invested in the company while others should look at exit opportunities at any pullback. There is no apple to apple comparison for Paytm but there are better-listed fintech companies that are available with reasonable valuations with a certainty of growth.
European markets are trading in the green with FTSE and CAC up half a percent
Bharat Electronics bags export order from Airbus for C295 Aircraft Programme
"As part of its Offset commitments under the prestigious C295 aircraft programme of the Government of India, and in line with the 'Make in India' policy, Airbus Defence and Space has signed a contract with Bharat Electronics Limited (BEL) for the manufacture and supply of Radar Warning Receiver (RWR) and Missile Approach Warning System (MAWS). This is the biggest export order received till date by BEL, the company said in an exchange filing. The stock was trading at Rs 201.75, down Rs 7.35, or 3.52 percent. It has touched an intraday high of Rs 210.30 and an intraday low of Rs 201.45.
Go Fashion IPO updates
The public issue of Go Fashion, which owns the brand Go Colors, had been subscribed 46.98 times by the morning of November 22, the third and final day of bidding. Investors put in bids for 37.95 crore equity shares against an offer size of 80.79 lakh units, as per the exchange data.
Retail investors have been active since day one of the bidding, buying shares 43.1 times their reserved portion, while the part set aside for non-institutional investors has been subscribed 100.2 times and that of qualified institutional buyers 21.66 times.
Market update at 2 PM: Sensex is down 1,221.49 points or 2.05% at 58414.52, and the Nifty cracked 358.10 points or 2.02% at 17406.70.
Fitch affirms Canara Bank's rating at 'BBB‐', outlook negative
Gaurav Garg, Head of Research, Capitalvia Global Research:
Indian equity benchmarks continued to trade lower in the noon session amid rising inflation and fresh Covid-19 cases in different parts of the world.
All the sectorial indices are trading in red with auto, oil & gas, pharma, PSU bank, power, capital goods and realty down 1-2 percent. BSE mid cap and Small cap indices down nearly 2 percent each.
Our research suggests that the 58200-58500 levels may act as an important support in the market. If the market unable to sustain the level of 58200-58500, we can expect the selling pressure till 57900.
Jesons Industries files IPO papers with Sebi, to raise Rs 800-900 crore
Jesons Industries, one of leading manufacturers of specialty coating emulsions (SCE) and water based pressure sensitive adhesives, has filed draft red herring prospectus with the capital markets regulator Sebi to come out with initial public offering.
The public issue comprises a fresh issuance of shares worth Rs 120 crore, and an offer for sale of more than 1.21 crore equity shares by promoter Dhiresh Shashikant Gosalia. The offer includes a reservation of 77,000 equity shares for company's employees.
Mumbai-based Jesons may also consider a pre-IPO placement issue to raise Rs 24 crore. If the said pre-IPO placement is completed, the fresh issue size will be reduced to the extent of such pre-IPO placement, as per the prospectus.
Nifty Pharma index fell 1 percent dragged by the Glenmark Pharma, Alembic Pharmaceuticals, Strides Pharma Science
Domestic two-wheeler volume to shrink 1-4% YoY this fiscal: ICRA
Domestic two-wheeler (2W) volume is expected to shrink by 1-4 percent year-on-year this fiscal, impacted by relentless increase in 2W prices as well as record high petrol cost, among others, credit ratings agency ICRA has said.
Further, ICRA said that the lacklustre festive season performance also highlights the continued wariness among the low-income population regarding big-ticket purchases.
ICRA Ratings expects domestic two-wheeler volumes to contract by 1-4 percent YoY in FY2022, following a weak festive season performance for the industry.
Go Fashion IPO subscribed 15.1 times on final day
The public issue of Go Fashion, which owns the brand Go Colors, had been subscribed 15.1 times by the morning of November 22, the third and final day of bidding. Investors put in bids for 12.19 crore equity shares against an offer size of 80.79 lakh units, as per the exchange data.
Retail investors have been active since day one of the bidding, buying shares 39.52 times their reserved portion, while the part set aside for non-institutional investors has been subscribed 18.65 times and that of qualified institutional buyers 5.18 times.
Go Fashion, which had a market share of around 8 percent in the branded women's bottom-wear market in FY20, opened its Rs 1,013.61-crore public issue for subscription on November 17. The price band for the offer has been fixed at Rs 655-690 a share.
Nifty Bank index shed 2 percent dragged by the PNB, SBI, RBL Bank, Axis Bank
Market at 1 PM
Benchmark indices were trading near the day's low with Nifty below 17500.
The Sensex was down 965.28 points or 1.62% at 58670.73, and the Nifty was down 281.50 points or 1.58% at 17483.30. About 783 shares have advanced, 2318 shares declined, and 148 shares are unchanged.
JBM Auto shares trade near 52-week high
JBM Auto share price jumped over 6 percent to Rs 53.80 intraday on November 22 after the company said its board would consider a stock split proposal at a meeting on December 8.
A meeting of the board was scheduled for December 8, 2021 to consider and approve the proposal of sub-division of the company's equity shares having face value of Rs 5 each and matters related thereto, subject to regulatory and statutory approvals, the company said in an exchange filing.
JBM Auto's net profit jumped 23 percent to Rs 25.30 crore in the quarter ended September 30, 2021 from Rs 20.49 crore in the same quarter of the previous year.
BSE Midcap index fell over 2 percent dragged by the Oil India, SRF, Info Edge
Market Updates:
Benchmark indices fell nearly 2 percent with Sensex falling over 1000 points and Nifty below 17500.
The Sensex was down 1,078.00 points or 1.81% at 58558.01, and the Nifty was down 319.00 points or 1.80% at 17445.80. About 774 shares have advanced, 2306 shares declined, and 141 shares are unchanged.
KPI Global bags repeat order for executing solar power project
KPI Global has bagged repeat order for executing solar power project of 5.20 MWdc capacity from the existing client M/s. Devika Fibres Private Limited, Surat under 'Captive Power Producer (CPP)' segment of the Company
K.P.I. Global Infrastructure was quoting at Rs 210.30, up Rs 0.10, or 0.05 percent on the BSE.
BSE Smallcap index down 2 percent dragged by the Jubilant Ingrevia, S.P. Apparels, Bodal Chemicals
Market at 1 PM
Benchmark indices extended the fall with Sensex down 800 points and Nifty around 17500.
The Sensex was down 815.07 points or 1.37% at 58820.94, and the Nifty was down 240.30 points or 1.35% at 17524.50. About 893 shares have advanced, 2171 shares declined, and 142 shares are unchanged.
Nifty PSU Bank index declined 3 percent dragged by the Bank of Baroda, Union Bank of India, Indian Bank
Prabhudas Lilladher view on Reliance Industries
RIL and Saudi Aramco decided not to proceed with 20% stake sale in RIL’s Oil to Chemical (O2C) hydrocarbon business. This is negative as it would have given RIL an access to latest petrochemicals technologies along with assured crude supplies.
RIL has made strong move towards net zero plan by 2035 and plan investment in solar energy, advanced energy storage, electrolyser and fuel cell.
We have ascribed USD 81 billion valuation to its O2C business (which is 9% premium to earlier deal value) and did not factor in any benefit from the deal pending finalization, accordingly our valuation remains unchanged.
RIL’s well diversified business model makes it a perfect growth story and is well positioned to incubate new business and pursue inorganic opportunities with liquid Balance Sheet. Maintain ‘BUY’ with a price target of Rs 2,955.
Patym share price falls 37% from issue price
Patym operator One 97 Communications share price fell 37 percent from its issue price of Rs 2,150 per share.
On November 18, on the listing day, the stock crashed 27.25 percent, the biggest-ever fall in a decade for any scrip on the listing day. In addition, it was locked in 20 percent lower circuit in comparison to the pre-opening price of Rs 1,955 on the BSE.
The stock settled at Rs 1,564.15, down 27.25 percent compared to the issue price of Rs 2,150 per share, while it opened 9.1 percent lower, which meant it could not cross even the Rs 2,000-mark during the day.
Patym operator One 97 Communications has become the third company to join the Rs 1-lakh-crore market capitalisation league through public issues floated this year, though the mobile wallet tanked 27.25 percent on its debut under intense selling pressure.
One 97 Communications (Paytm) was quoting at Rs 1,373.30, down Rs 190.85, or 12.20 percent on the BSE.
Oil off 7-week lows but under pressure as release of reserves eyed
Oil prices came off seven-week lows on Monday but remained under pressure after Japan said it was weighing releasing oil reserves and as the COVID-19 situation in Europe worsened, raising concerns about both oversupply and weak demand.
Brent lost 14 cents, or 0.2%, to $78.75 a barrel as of 0502 GMT and U.S. West Texas Intermediate (WTI) crude futures were down 4 cents at $75.90 a barrel.
The market is in a bit of a flux as strategic petroleum reserves (SPR) releases are not fully priced in yet, said an oil trader in Singapore.
WTI and Brent prices hit their lowest since Oct. 1 earlier in the session. They slumped around 3% on Friday, declining for the fourth straight week for the first time since March 2020.
Buzzing
Tractor-maker Escorts share price that has climbed more than 46 percent in the last three months is expected to gain 15 percent more, a report by research firm Sharekhan has said.
Japan’ Kubota Corporation will raise its stake in Escorts to 14.99 percent through a preferential issue aggregating to Rs 1,872 crore further cementing its place in India, the world’s largest tractor market. The joint entity intends to attain global leadership in the farm-equipment sector.
Brokerage firm Sharekhan has a positive outlook on Escorts and expects a 15 percent upside.
The partnership with Kubota would provide the company an opportunity to gain market share in the medium term, driven by product launches across brands and increase the addressable market, it added.
Go Fashion IPO issue subscribed 10.96 times on Day 3
The public issue of Go Fashion, which owns the brand Go Colors, had been subscribed 10.96 times by the morning of November 22, the third and final day of bidding. Investors put in bids for 8.85 crore equity shares against an offer size of 80.79 lakh units, as per the exchange data.
Retail investors have been active since day one of the bidding, buying shares 36.34 times their reserved portion, while the part set aside for non-institutional investors has been subscribed 9.19 times and that of qualified institutional buyers 3.39 times.
Go Fashion, which had a market share of around 8 percent in the branded women's bottom-wear market in FY20, opened its Rs 1,013.61-crore public issue for subscription on November 17. The price band for the offer has been fixed at Rs 655-690 a share.
Motilal Oswal on Bharti Airtel:
Bharti’s superior execution quality is reflected in its strong performance in the last 8-10 quarters; 25% YoY growth in consolidated EBITDA, despite no tariff hikes; and consistent subscriber and revenue market share gains. We see potential for a re-rating in both the India and Africa businesses on the back of steady earnings growth. We value Bharti on a Sep’22E basis, assigning an EV/EBITDA of 11x/5x to the India Mobile/Africa business, arriving at an SoTP based target of Rs 860. Our estimates do not factor in any upside from a tariff hike or steep market share gains from VIL’s financial stress. We maintain our buy rating.
Market update at 11 AM
Sensex is down 679.53 points or 1.14% at 58956.48, and the Nifty tumbled 198.70 points or 1.12% at 17566.10.
Gaurav Garg, Head of Research, Capitalvia Global Research
The Indian benchmarks started today on a flat note amid mixed global cues. Traders will be taking encouragement with Icra report to upgrade its GDP growth estimate for the second quarter of FY2021-22 to 7.9 percent as government spending increases in the month of September.
Economic advisory council to the Prime Minister said the Indian economy is likely to grow by 7-7.5 percent in the next fiscal year. Traders may take note of report that the commerce ministry said exports of agriculture and processed food products rose by 14.7 percent to USD 11.65 billion during April-October period.
Some cautiousness may come as RBI data showed the country’s foreign exchange reserves declined by USD 763 million to USD 640.112 billion in the last week.
Our research suggests that the levels of 17600 may act as an important support level in the market. If the market sustained above the support of 17600, we can expect it to trade in the range of 17600-17850.
