Manish Shah, Independent Technical Advisor
Nifty closed the day as in the inside day pattern. The inside day pattern is generally seen as a trend continuation pattern. The location of today’s inside day pattern is below the prior swing low at 17180. Also, the day’s candle was a red candle that closed at the lower end of the range.
The configuration is bearish as the overall trend in Nifty is down. Nifty has also traded and closed below the Fib retracement at 16951. The MACD is in a sell mode and prices are trading below major supports. Expect the Nifty to trade lower to 16750 and below that to 16400 over next several trading sessions. Volatility is high and the current spurt should be used by traders as a selling opportunity.
Bank Nifty is in a bearish mode for short-term traders. Currently, it is at the support of a rising trendline. For the day BNF made an inside day pattern. Inside days are usually short-term trend continuation patterns. As such we can expect BNF to trade lower towards 37050-37000 over the next couple of days.
Trend following indicators show a declining trajectory in the market and we could see the selling intensifying with the next couple of days. Over the next couple of days, the index is likely to drop below 37000 and there could be some more declines in store. On the upside major resistance is at 38900, and for any more upside BNG has take out 36900. For the timebeing the index is bearish.
Ajit Mishra, VP - Research, Religare Broking
Markets started the week on a feeble note and lost over a percent, tracking weak global cues. After the flat start, the Nifty gradually inched lower as the session progressed and settled around the day’s low to close at 16,887 levels.
The selling pressure was widespread and all the sectoral indices, barring pharma, ended lower wherein the metal and PSU banking were among the top losers. Meanwhile, the broader indices traded mixed and settled with a cut of 0.5-1.3%.
The pressure in the global indices, especially the US, is weighing on the sentiment and we feel the scenario would continue in absence of any major domestic trigger. A decisive breakdown below 16800 in Nifty could intensify the selling. Participants should stay light and prefer defensive viz. pharma and FMCG over others for long trades.
Vinod Nair, Head of Research at Geojit Financial Services
Global markets are expected to stay under pressure due to the confluence of an unfavourable economic outlook and investor risk aversion.
Global markets were in pain as economic data forecast to shed lower as indicated by high-frequency indicators in European regions like UK PMI is consequently down below 50 showing contraction in economy.
As demand slowed, India's manufacturing PMI declined slightly to 55.1 in September. As a result, all the key sectors were pressured by selling, except pharma & Oil stocks.
Rupak De, Senior Technical Analyst at LKP Securities:
On the daily chart, the benchmark Nifty has formed a dark cloud cover formation, suggesting a bearish reversal. Besides, the index has fallen below the 200DMA, which again a bearish set up. The RSI is in bearish crossover and falling towards the oversold zone.
On the lower end, the index has support at 16800, a decisive fall below 16800 may take the Nifty towards 16600/16300. On the higher end, resistance is visible at 17000/17200.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty lacked follow through buying on October 03, after having formed a bullish outside bar & an Engulfing bull candle on September 30.
It witnessed downside pressure throughout the day & ultimately formed an Inside bar pattern on the daily chart.
In terms of the Fibonacci retracement, it retraced nearly 78.6% of the Friday’s rise where the key Fibonacci level acted as a support near 16840. The weekly chart shows that the index has once again moved down to retest its key weekly moving averages.
The overall structure shows that the index has stepped into a short term consolidation mode & can see consolidation near 16800-17200. The internal structure shows that a move towards the upper end of the range is likely in the coming sessions.
Rupee Close:
Indian rupee closed 53 paise lower at 81.87 per dollar against previous close of 81.34.
Market Close
Indian benchmark indices ended on negative note on the first day of the week with Nifty around 16,900.
At Close, the Sensex was down 638.11 points or 1.11% at 56,788.81, and the Nifty was down 207 points or 1.21% at 16,887.30. About 1436 shares have advanced, 2012 shares declined, and 150 shares are unchanged.
Adani Enterprises, Eicher Motors, Adani Ports, Maruti Suzuki and Tata Consumer Products were among the top losers on the Nifty. However, gainers included ONGC, Dr Reddy's Laboratories, Cipla, BPCL and Coal India.
Except pharma, all other sectoral indices ended in the red.
BSE Midcap index shed 1.2 percent and Smallcap index fell 0.54 percent.
Jefferies View On Cement:
The cement prices grew 3% MoM & September 2022 exit price is 1% above quarter average. The Q2FY23 average price is down 5-5.5% QoQ.
See further price hike announcement in few markets for October 2022 and also see improvement in demand trends in September, said Jefferies.
While Q2FY23 is expected to be weak for Ambuja due to soft prices & high energy cost, however, high exit price for September, softening costs/base positive for Ambuja’s Q3, reported CNBC-TV18.
Dilip Buildcon arm receives provisional completion certificate road project in UP
Dilip Buildcon has received provisional completion certificate for rehabilitation and up-gradation from 2 lane to 4 lane for Varanasi - Dagamagpur section of National Highway-7 on EPC mode in Uttar Pradesh.
With this, the authority declared the project fit for entry into commercial operation on September 29.
Astec Lifesciences CFO resigns
Saurav Bhala has resigned as the 'chief financial officer' of Astec Lifesciences to pursue a career opportunity outside the company.
Astec Lifesciences was quoting at Rs 1,833.25, down Rs 20.10, or 1.08 percent on the BSE.
Canara Bank Securities View on Electronics Mart India
Electronics Mart India Limited (EMI) is the 4th largest electronic retailers and is strongly placed in the southern region. The company expanded in Delhi which offers a scope for growth in terms of revenues.
The company prioritizes profitability of the store before expansion and is focused on enhancing the sales volume with optimal product assortments offering value for money. This has helped it to be retailers to have one of the highest margin among peers with a decent revenue growth.
Considering the emerging demographics in India backed with rising per capita income, improving power situation, multiple financing options, we believe there is a scope for organized electronic retail segment to grow. Post covid there has been an increase in the demand for consumer durables as highlighted by the management.
In comparison to its listed peer, the issue is available for a lower valuation. Hence, we recommend to SUBSCRIBE to the issue for listing gains and long term.
Indiabulls Housing Finance increases its lending rates by 50 bps
Indiabulls Housing Finance has increased its lending rates by 50 bps effective from October 1. The decision came after the RBI raised repo rate by 50 basis points.
Indiabulls Housing Finance was quoting at Rs 117.40, down Rs 1.40, or 1.18 percent.
Market at 3 PM
Indian benchmark indices extended the losses and trading at day's low with Nifty below 16900.
Aster DM Healthcare arm Medcare announces acquisition of 60 % in Skin 111 Clinics
Medcare, the premium healthcare provider under the Aster DM Healthcare group, announced its expansion into the premium wellness and beauty care segment with the acquisition of 60% share in Skin 111 Clinics.
Muthoot Capital Services completes securitization transaction of Rs 121.56 crore
Muthoot Capital Services has completed a securitization transaction of Rs 121.56 crore on September 30. This is the fourth securitization transaction carried out by the company during the FY23. The entire pool is from the non - priority sector and has been taken after considering the RBI guidelines.
CLSA View On RBI Policy
RBI policy was in-line with expectations and expect MPC to hike rate by 35 bps on December 7 & 25 bps on February 8.
RBI will likely raise rates by 50 bps in December if uncertainty about Fed slowing remains.
Fed hikes will drive RBI rate hikes to protect rupee, reported CNBC-TV18.
BSE Realty index fell 1 percent dragged by the Indiabulls Real Estate, Godrej Properties, DLF
Nirmal Bang View on Electronics Mart India
Being the 4th largest consumer durable and electronics retailer in India and the largest in South India, Electronics Mart India enjoys favorable terms of pricing/margins from brands due to its scale - this is a key advantage.
Electronics Mart India has demonstrated superior performance among all major consumer durable and electronics retailers in India in terms of growth with revenue CAGR of 26% over FY15-20 (pre-covid) and also managed to deliver respectable ROE of 17.4% during the covid impacted year of FY22.
We believe Electronics Mart India is being offered at attractive valuations at PE of 21.8x FY22 & EV/EBITDA of 9.7x FY22. We recommend subscribing to the issue.
Sterlite Tech announces Gram Galaxy - India’s first integrated solution to connect villages with fibre
City gas distributors may face margin pressure; Indraprastha Gas, Mahanagar Gas, Gujarat Gas shares drop
On Friday, prices of natural gas were hiked by a steep 40 per cent to record levels, in sync with the strong energy rates globally.... Read More
Just In | UK September final manufaturing PMI at 48.4 versus 47.3 (MoM) versus estimate of 48.5
European stocks fall on Monday as markets enter the last quarter of the year; Stoxx 600 index dropped 1% in early trade
Ajanta Pharma Large Trade | 1.90 lakh shares (0.22 percent equity) worth Rs 24.46 crore change hands at an average Rs 1,290 per share
Kajaria Ceramics in 50-50 JV with Ramesh Corp
According to the exchange filing, company will make investments upto Rs 125 crore (i.e. 50 percentof project cost of Rs 250 crore) in a company to be incorporated in Nepal, by way of equity and/or loan, for establishing a manufacturing facility in Nepal on joint venture basis between the company and various individuals affiliated with Ramesh Corp, Nepal.
Page Industries Large Trade | 1.90 lakh shares (0.22 percent equity) worth Rs 24.46 crore change hands at an average Rs 1,290 per share
Markets at 2 PM
Sensex is down 440.64 points or 0.77 percentat 56,986.28. Nifty down 136.50 points or 0.80 percentat 16,957.80. About 1524 shares have advanced, 1719 shares declined, and 151 shares are unchanged.
Credit Suisse shares hit record low as CEO fails to calm markets
The cost of insuring the firm’s bonds against default climbed about 15% last week to levels not seen since 2009 as the shares touched a new record low.... Read More
Angel One View on Electronics Mart India
In terms of valuations, the post-issue P/E works out to 21.8x FY22 EPS (at the upper end of the issue price band) which is low compared to its peer Aditya Vision Ltd.
Further, Electronics Mart India has better revenue growth (CAGR of 17%) over 2 years, better return on equity and expansion plan on the cards. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a SUBSCRIBE rating on the issue
Medplus Health Services Large Trade | 2.01 lakh shares (0.17% equity) worth Rs 12.33 crore change hands at an average of Rs 615 per share.
Medplus Health Services was quoting at Rs 615.80, down Rs 2.60, or 0.42 percent.
BSE Power index shed 1 percent dragged by the Adani Green, Siemens, Adani Transmission
JUST IN | Euro Zone September Manufacturing PMI at 48.4
Hem Securities View on Electronics Mart India
Electronics Mart India is bringing the issue at price band of Rs 56-59 per share at p/e multiple of 17x on post issue FY22 PAT basis.
Company is the 4th largest consumer durable and electronics retailer in India with a leadership position in South India.
Company’s scale of operations along with its long-standing relationship with leading consumer brands enables it to procure products at competitive rates. Company being one of the fastest growing consumer durable and electronics retailer with consistent track record of growth and industry leading profitability has business model that provide operational flexibility to create long term sustainable footprint.
Hence, looking after all above, we recommend “Subscribe” on issue.
Bata India CFO resigns
Kanchan Chehal is proposed to take up a Global role with Bata Group, hence he ceased to the Whole-time Director but would continue to serve the board at Bata India as a non-executive director.
In addition, Vidhya Srinivasan has resigned as Director – Finance and Chief Financial Officer of the company to pursue opportunities outside, effective November 12, 2022.
For the interim period, Shaibal Sinha, the non-executive non-independent director, has been assigned the responsibility to oversee the finance & accounts functions of the company.
Bata India was quoting at Rs 1,807.30, down Rs 13.20, or 0.73 percent on the BSE.
Gold climbs on weaker dollar even as rate hikes loom
Gold prices rose on Monday as a softer dollar rekindled some of bullion's appeal for overseas buyers, although the prospects of sharp interest rate hikes by the U.S. Federal Reserve and other major central banks capped further gains.
Spot gold was up 0.5% at $1,667.89 per ounce, as of 0603 GMT. U.S. gold futures were 0.2% higher at $1,675.30.
The dollar index was down 0.4% against a basket of currencies, making greenback-priced bullion less expensive for overseas buyers. Benchmark U.S. 10-year Treasury yields were also lower after rising for two days.
IDFC First Bank Business Updates:
Federal Bank Q2 deposits at Rs 1,89,146 crore, a growth of 10%
The Federal Bank’s CASA deposits aggregated to Rs 68,873 crore, a growth of 10.7% in September 2022 over Rs 62,191 crore as of September 30, 2021. CASA ratio reached 36.41% (Q2 FY23) from 36.16% (Q2 FY22).
The bank’s gross advances grew by 19.4% to Rs 1,63,956 crore from Rs 1,37,313 crore as of September 30, 2021.
The Bank’s Customer deposits (Total deposits excl Interbank deposits and certificates of deposit) aggregated to Rs 1,83,106 crore, a growth of 8.5% over Rs 1,68,742 Crore as of September 30, 2021. Total deposits aggregated to Rs 1,89,146 Crore, a growth of 10.0% over Rs 1,71,995 Crore as of September 30, 2021
Elara Capital View on Electronics Mart India
Electronics Mart India would continue to rise at a healthy pace in terms of store expansion, especially in North India, and given the customer shift toward modern format large retailers (as a one-stop shop experience with higher store keeping unit [SKU]) vs a distribution model.
Post the IPO, promoter stake would reduce to 77.1% at the lower price band and 78.0% at the upper.
At the upper price band, market capitalization after IPO stands at Rs 22.7bn. ROE and ROCE stand at 18% and 14%, respectively, in FY22.
At the upper price band, it trades at a 18.5x FY22 P/E, which is significantly lower than peer Aditya Vision, which trades at 23.7x FY22 P/E. In our view, the IPO is priced attractively and recommend Subscribe.
Aster DM Healthcare in agreement with Tirupati based Narayanadri Hospital
Aster DM Healthcare has announced its association with Andhra Pradesh’s Tirupati based Narayanadri Hospital & Research Institution to strengthen its presence in the south.
This is part of O&M asset light model strategy undertaken by Aster DM Healthcare to add upto 500 – 700 beds in India. This will be the Fifth hospital under Aster DM Healthcare in the state of Andhra Pradesh, company said in release.
Aster DM Healthcare Ltd was quoting at Rs 249.05, down Rs 3.65, or 1.44 percent on the BSE.
J Kumar Infraprojects gets LoA worth Rs 352 crore from Municipal Corporation Of Greater Mumbai
J Kumar Infraprojects receved Letter of Acceptance (LOA) from M/s. Municipal Corporation of Greater Mumbai for the "Proposed re-construction of Siddharth Municipal General Hospital on land bearing CTS No.260/12, 266 & 267 A/1, at Siddharth Nagar, Goregaon (W) in P/S ward for a total lumpsum contract cost of Rs 3,523,049,980 inclusive of Goods and Service Tax
Pound jumps on UK tax cut reversal, oil swings higher
Oil jumped on Monday as OPEC+ considered reducing output at its meeting later this week while the pound swung higher after the UK government said it would reverse a controversial tax cut that had roiled British markets.
Asian stocks mostly fell in holiday-thinned trade although Japanese markets found support on strong energy and semiconductor shares.
Sterling jumped in early London trade after the British government announced plans to reverse the proposed scrapping of the higher rate of income tax that has sparked a backlash in the governing Conservative Party.
The pound rose as far as $1.128, its highest in 10 days, while FTSE futures hinted at a strong recovery in a stock market that has been battered by concerns over Prime Minister Liz Truss and her finance minister Kwasi Kwarteng's spending plans.
Market at 1 PM
Benchmark indices were trading lower with Nifty hovering around 17000.
The Sensex was down 239.12 points or 0.42% at 57187.80, and the Nifty was down 61.50 points or 0.36% at 17032.80. About 1643 shares have advanced, 1548 shares declined, and 166 shares are unchanged.
Buzzing
Apparel manufacturer and exporter Gokaldas Exports surged over 5 percent in trade on October 3 after Abu Dhabi Investment Authority acquired 15 lakh equity shares in the company at an average price of Rs 349.75 a share.
The fund owned by the Emirate of Abu Dhabi bought these shares in a bulk deal that was executed on September 30. Clear Wealth Consultancy Services LLP sold 15 lakh shares at the same price.
Future Supply Chain Solutions' Managing Director resigns
Mayur Toshniwal has resigned as a director of Future Supply Chain Solutions with effect from September 30, 2022. With his resignation, Mayur has also ceased to be Managing Director of the company.
Future Supply Chain Solutions was quoting at Rs 27, up Rs 0.55, or 2.08 percent.
Morgan Stanley View On Cyient
Morgan Stanley has kept overweight rating on Cyient with a target at Rs 700 per share.
See potential part divestment of the DLM business as incrementally positive, said Morgan Stanley.
The divestment will provide flexibility to scale up DLM business & may unlock shareholder value, however, divestment is still at a very early stage, reported CNBC-TV18.
Cyient was quoting at Rs 788.35, down Rs 3.85, or 0.49 percent on the BSE.
Nifty Bank index declined 1 percent dragged by the AU Small Finance Bank, Kotak Mahindra Bank, IndusInd Bank
Credit Suisse View On NBFCs
The RBI announced a list of 16 NBFCs to be classified as 'upper layer' and expect only LIC Housing & AB Finance to be adversely impacted by scale-based regulations.
Increase in interest rates bodes well for LIC Housing Finance’s near-term margin outlook.
Credit Suisse remain concerned on high leverage & low provisioning cover of LIC Housing, reported CNBC-TV18.
Choice Broking View on Electronics Mart India IPO
At higher price band, Electronics Mart India is demanding an EV/Sales multiple of 0.7x, which is lower than the above peer average.
Considering the expected growth in the business, we feel the IPO is attractively priced. Thus we assign a “SUBSCRIBE” rating for the issue.
