Closing Bell: Nifty ends below 17,700, Sensex falls 677 pts; IT drags, PSU banks gain

Despite a flat start to the week, domestic markets lost ground to slip into negative territory tracking dull global cues and mixed corporate earnings. Continuous selling by FIIs during the week fanned investor cautiousness.

Global markets turned weak although the European Central Bank decided to keep policy rates unchanged despite the inflationary pressure while slow GDP growth in the US tested investor confidence.

Private sector banks witnessed a fatigue week although the sector witnessed improvement in business along with better asset quality.

India’s manufacturing and services PMI data to be released next week will be a key indicator in determining the economic progress for the month of October.

Additionally, decisions of the Fed in its meeting next week will be a major factor that will drive global equities in the coming days.

The markets have closed at a crucial point. Today's low of the Nifty has become a support for the short term trend.

If we break 17550-17500, sell signals would get activated which can drag the index down to 17200.

On the upside 17900 is a stiff resistance and any expectations of trading on the long side will only emerge post this level. Stops are wide and traders should exercise extreme caution.

Markets traded under pressure for the second consecutive session and lost nearly a percent, in continuation to the prevailing corrective phase.

After the sharp decline in early trades, the benchmark recovered almost vertically in no time but selling pressure at the higher levels again pushed the bulls on the back foot. Finally, the Nifty ended down by 1% at 17,672 levels. A mixed trend was witnessed on the sectoral front wherein IT and banking were the top losers.

Earnings disappointment combined with feeble global cues is weighing on the sentiment. Apart from the earnings announcements, participants will be closely eyeing the upcoming US Fed meet and auto sales numbers for cues. Indications are pointing towards further slides, so participants should maintain a cautious approach and prefer a hedged approach.

After showing a strong volatile week, index closed a week at 17672 with loss of more than two percent and formed a bearish candle after forming bearish piercing candle last week hinting weakness.

On daily chart index reached to its good support zone 17600-17500 zone. So if mentioned levels survived then one can again expect decent pullback towards 17800-17900 zone, which are the immediate resistance also on the higher side, fresh move only possible above 18k mark.

The domestic market continued to witness selling as energy and private bank stocks remained under pressure following dull global sentiments.

European markets opened weak even as the ECB decided to keep policy rates unchanged despite the inflationary pressure.

US futures are trading in red following slow GDP growth and disappointing earnings from tech giants. Decisions of the Fed in its meeting next week will be a major factor that will drive global equities in the coming days

The equity markets trended lower for the week owing to selling pressure from FIIs. The FIIs have been net sellers to the tune of more than Rs 20K crores for the month of October.

The valuation risks have been one the main concerns for foreign investors, triggered by the downgrading of Indian equity markets from “overweight” to “neutral” by key global brokerages.

The valuation risks are specifically coming to the fore now as few sections of the markets expect growth momentum to slow in the wake of sticky inflation.

: Benchmark indices ended on weak note for the third consecutive session on October 29 with Nifty closing below 17,700 level.

At close, the Sensex was down 677.77 points or 1.13% at 59,306.93, and the Nifty was down 185.60 points or 1.04% at 17,671.70. About 1326 shares have advanced, 1836 shares declined, and 157 shares are unchanged.

Tech Mahindra, NTPC, Kotak Mahindra Bank, IndusInd Bank and L&T were among the major Nifty losers. Gainers included UltraTech Cement, Maruti Suzuki, Cipla, Dr Reddy’s Laboratories and Shree Cements.

Among sectors, bank, IT energy, power and oil & gas indices ended in the red, while buying was seen in the realty, pharma, metal and auto names. The BSE midcap and smallcap indices ended with marginal change.

Bharat Electronics has reported 54.3 percent jump in its Q2 net profit at Rs 612.6 crore versus Rs 397.1 crore and revenue was up 14.8 percent at Rs 3,660.6 crore versus Rs 3,188.7 crore, YoY.

Earnings before interest, tax, depreciation and amortization (EBITDA) was up 37.4 percent at Rs 856.5 crore versus Rs 623.5 crore and EBITDA margin at 23.4 percent versus 19.6 percent, YoY.

Bharat Electronics was quoting at Rs 206.70, up Rs 6.30, or 3.14 percent.

This is to inform you that the audit of our formulations manufacturing facilities (FTO 7 & FTO 9) at Duwada, Visakhapatnam, by the US FDA, has been completed today. We have been issued a Form 483 with 8 (eight) observations, which we will address within the stipulated timeline, Dr Reddy’s Laboratories said in its release.

Dr Reddy’s Laboratories was quoting at Rs 4,620.90, up Rs 47.60, or 1.04 percent.

LT Foods' Q2 net profit was up 5.7 percent at Rs 76.6 crore versus Rs 72.5 crore and revenue was up 7.6 percent at Rs 1,319.8 crore versus Rs 1,226.7 crore, YoY.

Earnings before interest, tax, depreciation and amortization (EBITDA) was up 1.7 percent at Rs 153.1 Crore versus Rs 150.5 crore and margin at 11.6 percent versus 12.3 percent, YoY.

LT Foods was quoting at Rs 69.45, down Rs 2.05, or 2.87 percent on the BSE.

We witnessed yet another day of correction in the market as it failed to sustain above the support levels. Our research shows that it is going to be crucial in the short-term for the market to sustain above the 17600 support zone.

If the market is unable to sustain the level of 17600, we can witness lower levels of 17250-17300. Technical indicator suggests, a volatile movement in the market.

Considering the FY-21 adjusted EPS of Rs 15.69 on the post-issue basis, S.J.S. Enterprises is going to list at a P/E of 34.54 with a market cap of Rs 16,497 million.

There are no listed companies in India whose business is comparable with that of the company’s business.

We assign a “Subscribe” rating to this IPO as the company is a leading aesthetics solution provider with an extensive suite of premium products in a growing industry with long-standing customer relationships and is available at a reasonable valuation.