PremiumBenchmark indices closed in the red after paring early gains and slipping back from a brief rally into the green in the post noon session on banking and IT stocks. The markets traded largely sideways in green in the forenoon session. Banking and auto sectors were the top drags on the markets towards the end of trade. Selling pressure kept indices muted on the last day of trading in Samvat 2077.
Since the last few trading sessions Nifty has been making lower Highs and lower lows, which is a bearish sign. Nifty closed negative by 60 points at 17,830 after taking resistance at 17,990. Nifty has support in 17,800-17,650 range and resistance in 17,950-18,050 range. Traders are advised to be cautious in long positions and maintain strict stoploss.
Benchmark indices closed in the red on the last day of Samvat 2077, after opening in the green. Sensex shed gains and closed 257 points down, while Nifty closed at 17,830, after opening close to the 18,000 mark. PSU bank and IT sectors helped the indices return into green briefly but selling pressure tripped the indices back into the red. The broader indices also moved into the negative pressuring the indices. Realty and metals were the only sectors showing significant gains and remained consistently in the green. On the Sensex, 13 stocks advanced, while 17 stocks declined. Larsen and Toubro, Asian Paints and Ultratech Cement were the top gainers, while Sun Pharmaceuticals and Kotak Mahindra Bank were top drags. On the Nifty, too, L&T and Asian Paints were top gainers with Hindalco, while Sun Pharma and IndusInd Bank along with Bharti Airtel dragged. Nifty saw 23 advances and 27 declines. Realty and capital goods indices rose 2% each. The BSE mid-cap and small-cap indices ended with marginal losses.
Realty stocks are among top gainers on BSE Sensex. Garden Reach Shipbuilders and Engineers Ltd is the top gainer with more than 10% gains.
Nifty PSU Bank and Nifty IT are back in the red after briefly trading in green in the middle of the second half of the day.
One 97 Communications Ltd. (PAytm) is coming out with an IPO of ₹18,300 crore at a price band of ₹2,080-2,150. The IPO will consist of an offer for sale of ₹10,000 crore and fresh issue of ₹8,300 crore. The issue opens on 8 November 2021 and closes on 10 November 2021. Incorporated in 2000, One 97 Communications Ltd is India's leading digital ecosystem for consumers as well as merchants. In 2009, the company launched the first digital mobile payment platform, "Paytm App" to offer cashless payment services to customers and now, it became India's largest payment platform and the most valuable payments brand. It offers payment services, commerce and cloud services, and financial services to 337 million registered consumers and over 21.8 million registered merchants, as of 30 June 2021. Its software and cloud services allows large, medium and small merchants to improve their business operations and access important financial tools such as banking, wealth and credit facilities.
At the upper end of the price band, Paytm is valued at 49.7x its FY21 revenues. While valuations may appear to be expensive, Paytm has become synonymous with digital payments through mobile and is the market leader in the mobile payment space. Patym is well positioned to benefit from the exponential 5x growth in mobile payments between FY2021–FY2026 and hence believe that the valuations are justified. We recommend investors to SUBSCRIBE to the issue.
The afternoon session on the Nifty and Sensex has been choppy, with the rally post SBI earnings call again fizzling out.
Aditya Birla Fashion and Retail has reduced debt from ₹1,200 crore in Q1FY22 to ₹873 crore by end of Q2FY22.
Bankex pared losses and was in the green before dipping back into red after SBI results.
Benchmarks are back in green buoyed by banking sector.
SBI slippages ₹4,176 crore | Street estimate: ₹11,000 crore | SBI extends gains on lower slippages compared with estimates.
State Bank of India has reported a Q2 (SL) net profit of ₹76.3 billion compared with ₹46 billion in the year-ago quarter; SBI's net profit was ₹65 billion in the last quarter. The results are below street estimate of ₹77 billion. The bank's gross non-performing assets stood at 4.95% compared with 5.32% quarter-on-quarter. Net non-performing assets stands at 1.52% compared with 1.77% in the previous quarter.
The IT index on BSE is in the green with 10 stocks advancing and 20 stocks declining. Nifty IT has 6 advances and 4 declines, but has returned into the green after slipping into red earlier in the session.
Infosys on Wednesday announced its strategic collaboration with Shell Global Solutions International B.V. (Shell), as the commercialization partner of the “Shell Inventory Optimizer" solution. Through this collaboration, Shell and Infosys will launch “Shell Inventory Optimizer" as the first product offered to its energy customers. The solution leverages artificial intelligence that enables companies to optimize warehouse inventory levels based on historical consumption. By improving demand planning, this innovative solution reduces the time and labor required to complete maintenance operations and brings down the cost of operation. This collaboration will further strengthen the long-standing relationship that has existed between the two companies since 2000s.
Sensex has shed more than 250 points in the afternoon session of trade.
Bandhan Bank, IDFC First Bank, Federal Bank, ICICI Bank and IndusInd Bank are among the top stocks among declines on Bank Nifty. Banking sector is among the biggest drags on the markets in the latter half of the day.
Railtel Corp. of India Ltd has informed that it has received a work order for ₹869 million from Konkan Railway Corp. Ltd.
Sensex and Nifty have slipped into the red as the latter half of the day's trading progresses.
Parsvanath Developers has entered into a joint development agreement with Akshaya Signature Homes for the development of a residential plotted colony project on about 9.5 acres in Chennai.
Larsen and Toubro, Tech Mahindra and Ultratech Cement are top gainers on Sensex, while Sun Pharmaceuticals, IndusInd Bank and ICICI Bank are top losers.
For its India business, revenues rose 5.64% and mobile revenues were up 6.19% quarter-on-quarter. Its average revenue per user (Arpu) was in line with estimates at ₹153 compared to ₹146 in the preceding quarter (Read here)
Most Asian stocks slipped on Wednesday amid a warning about China’s growth outlook and as traders braced for the Federal Reserve policy decision. Oil fell with the US pressuring OPEC+ to boost supplies.
Shares were lower in Hong Kong and China in the wake of Premier Li Keqiang’s warning that the world’s second-largest economy faces new downward pressures. The nation is also grappling with its most widespread coronavirus outbreak since the pathogen emerged in Wuhan in 2019.
An iron-ore rebound bolstered commodity-reliant Australia. Japan was shut for a holiday. S&P 500, Nasdaq 100 and European futures edged down following fresh peaks for US shares. Wall Street has been buoyed by the resilience of company profits to rising costs from supply chain and labor disruptions.
A gauge of the dollar held a climb. Cash Treasuries won’t trade in Asia because of the Japan holiday. US Treasury two-year yields overnight joined a global slide in short-term rates that was unleashed by the Australian central bank’s dovish stance. Australian sovereign yields declined.
The gyrations in short-term yields extend a period of heightened bond-market volatility as investors try to anticipate how hawkish central banks may become to quell inflationary pressures. The Fed is expected to announce that it will start tapering its massive bond purchases, but economists are divided on whether a rate liftoff will be next year or in early 2023.
The Nifty volatility index is down over 4%.
Nifty appears to be facing resistance around the 18,000 mark.
Keep an eye on these penny stocks in 2022 which promise long term growth (Read here)
India's dominant services industry expanded at the fastest pace in more than a decade on improved domestic demand despite high inflation, driving firms to take on staff at a rate not seen since the onset of the pandemic, a private survey showed. The IHS Markit Services Purchasing Managers' Index accelerated to 58.4 last month from 55.2 in September, above the 50-mark separating growth from contraction for a third straight month. The survey showed Asia's third-largest economy was on a sustained recovery path but rising prices could prompt the Reserve Bank of India to hike interest rates earlier than expected, putting the brakes on growth. "A substantial rise in prices charged for the provision of services in India had no detrimental impact on demand, as companies signalled the strongest monthly expansion in new business in over a decade," said Pollyanna De Lima, economics associate director at IHS Markit. Input prices rose sharply last month on higher fuel and material costs, pushing companies to pass on some of the extra cost burden to customers. Prices charged rose at the sharpest rate since July 2017, suggesting inflation will remain elevated, with the biggest upturn in transport and storage costs as a consequence of the recent surge in global crude prices to near $85 a barrel.
Result Update – Trent Ltd
Trent delivered a blockbuster quarterly performance with significant beat on our/consensus estimates across all fronts.
Key triggers for future price performance
· We pencil in 230 store additions between Westside and Zudio for FY22-24E
· Liquidity position remains robust with cash & investments worth | 685 crore that will enable it to tide over the current situation better than peers
· Due to healthy beat on estimates, we revise our revenue and earnings estimates upwards for FY22/23E. We roll over our estimates to FY24E and build in revenue, earnings CAGR of 18%, 42%, respectively, in FY20-24E
· In the long run, the company aims to grow its revenue at CAGR of 25%+
Result Update – Dabur India
Dabur reported healthy results with 10% volume growth
Key triggers for future price performance
· Significant shift in consumption towards healthier, natural & Ayurveda based products would be driving growth for the company
· Aggressively foraying into many big categories (edible oil, carbonated drink, household insecticides, fruit drinks) and new products launches
· Increasing the distribution of many urban products in hinterland reach of 83,000 villages) with lower price points & different variants (‘honey Tasties’)
Currency strategy
US dollar rose 0.28% as the US Federal Reserve started its two day policy meeting, where investors expect the central bank to announce tapering. However, sharp upside was capped on a rise in risk appetite in the global markets.
Rupee future maturing on 26 November appreciated by 0.28% in yesterday’s trading session tracking weakness in the dollar and FII inflows. However, sharp gains were prevented on steady crude oil prices and muted domestic markets.
Derivatives view
Nifty
The Nifty opened higher and touched intraday high of 18,038 but faced resistance from 18,000 Call writers. Looking at option data, healthy Call writing was seen at multiple strike especially 18,000 Call option witnessed substantial increase in OI, which should act as immediate resistance and cap upside. In the Nifty, 18,000 Call option holds highest OI with further OI addition of 3 million shares. In Put side, 17,800 followed by 17750 strike witnessed highest unwinding.
Bank Nifty
On Tuesday, the Bank Nifty was able to maintain its momentum as it out performed for a second day in a row and closed positive. According to option data, both 40000 Call and Put option hold significant OI, which indicates that Bank Nifty is likely to trade in a range with 40000 as anchor point
Stocks in F&O Ban
PNB & Escorts
Recommendations
Intraday – Indiabulls Housing, Marico
Positional – Sun Pharma, Tech Mahindra, Maruti
Commodities outlook
Bullion outlook
· Comex gold price declined 0.30% on the back of stronger dollar index and ahead of a crucial US Federal Reserve meeting that is likely to offer cues on future interest rate hikes amid rising inflationary pressures
· US benchmark 10 -year treasury yields reduced by 2.54% to 1.53, reducing the opportunity cost of holding non-yielding bullion
Energy outlook
· Crude oil price declined on Tuesday due to stronger dollar and higher production from Russia. However, sharp downside was prevented by stronger demand from US
· Russia’s oil output increased in October for a second straight month as companies open the taps under the Opec+ agreement to raise output. Output was 10.843 million barrels/day, 1.1% higher than September
· Ahead of Thursday's Opec meeting, consuming countries have been pressuring Opec+ to do more to cool the market. But the alliance is expected to stick to its plan for gradual, monthly production increases of 400,000 barrels per day
Recommendations
1) Crude Oil
2) Bulldex
Our benchmark index had a gap up opening with a small margin despite SGX was indicating a sluggish start. In the initial trade, Nifty tested the 18,000 mark but was unable to sustain above it. Due to modest selling in some of the heavyweights, Nifty gradually corrected in the first half and then slipped into a consolidation mode to end the range bound session with nearly two tenths of a percent cut.
The Diwali festival is around the corner and it appears as if the market is in no hurry to give any major move ahead of it. Generally markets do not correct around this festive time, but since we had a rough week last week and slid below key support of 18,100–18,000, market is finding a bit difficult to stay at higher levels. Fortunately the banking space remained firm throughout the day, which provided some helping hand to the benchmark index. If that had not been the case, Nifty would have probably knocked the doors at 17,800. For the coming session, we expect the range bound move to continue where 17,950 – 18,000 are likely to act as immediate hurdles and on the lower side, 17,800 – 17,700 are to be seen as key supports.
Traders are advised not to trade aggressively in index and in case of a recovery towards the mentioned resistance zone of 18,000–18,100, one should lighten up existing longs. Also all eyes would be on BANKNIFTY, because if Nifty has to reclaim these levels, it needs to continue its upwards trajectory with some intent. One needs to focus on individual stocks; but needs to be very selective because only few counters are likely to do well in such kind of lethargic mood.
SBI stock is approaching its 52-week high.
Sensex has gained over 245 points, while Nifty was closing in on the 18,000 mark.
The three top gainers on Nifty realty are close to their 52-week highs.
Realty indices have consolidated gains on both Nifty and Sensex. Oberoi, Sobha and Phoenix lead on both indices.
Advances: 1,302 | Declines: 481 | Unchanged: 78
Total Securities: 1,861 | AD Ratio: 2.71
27 stocks advance 3 decline at pre-open.
The petrol and diesel prices remained unchanged on Wednesday across various cities in the country including the national capital Delhi, Mumbai, Kolkata, etc. After a gap of seven days, the fuel prices have not witnessed any change across the country on Wednesday. Before this, there was no change in rates between October 25 and 27. (Read here)
The National Company Law Tribunal has placed on its website an order approving the resolution plan of Adani Power for Essar Power MP.
Adani Ports has reported that the company's portfolio of ports handled cargo volume of 24.76 million metric tonnes in October. The company's volume recovered in October and grew by month-on-month to 7.67 MMT.
LatentView Analytics Ltd, a global digital analytics firm, on Wednesday set the price band for its initial public offering (IPO) at ₹190 to ₹197 per share. The IPO will open on 9 November and close on 11 November, with shares expected to start trading on 22 November. The IPO consists of a fresh issue of ₹474 crore and an offer for sale of up to ₹126 crore by its existing shareholder and promoters. (Read here)
Asian stocks were steady Wednesday as traders mulled another all-time high for US equities and a retreat in short-term sovereign yields ahead of the Federal Reserve policy decision (Read here)
Banks to remain closed for 5 days from today in these cities (Read here)
In cryptocurrencies, Bitcoin prices today surged to trade above $63,000 mark. The world's largest cryptocurrency by market capitalization was up more than 3% to $63,232.8. The and most popular digital token is up 117% this year (year-to-date) so far after hitting a record high of near $67,000 in October. Ether, the coin linked to ethereum blockchain and the second largest crypto, also jumped more than 6% to $4,619, as per CoinDesk. Cardano prices were marginally higher at $1.96 whereas dogecoin rose over 1% to $0.27. Other digital tokens like XRP, Solana, Stellar, Uniswap, Litecoin, Polkadot were also trading with gains over the last 24 hours. Shiba Inu, that has been on a record rally since the past few sessions, declined over 2% to $0.00006816. (Read here)
Policybazaar IPO comprises a fresh issue of ₹3,750 crore worth of equity shares and an OFS of about ₹1,960 crore by existing shareholders (Read here)
Sigachi Industries IPO consists of a fresh issue of 7.70 million shares up from earlier planned of up to 2.84 million shares (Read here)
On 2nd day, PB Fintech Ltd IPO issues subscribed—1.59x (5 pm as per BSE website). It was subscribed 2.04 times in the retail investor category. The qualified institutional buyers (QIBs) and the non-institutional investors (NIIs) had subscribed to the issue 2.08 times and 0.23 times respectively. In terms of valuations, the post-issue FY2021 EV/Sales works out 47.6x to (at the upper end of the issue price band), which is high considering ’s historical financial performance (making continuous losses on bottom-line front). Considering the company's overall business model and higher valuation, we recommend a NEUTRAL rating on the issue.
Oil prices fell on Wednesday as industry data pointed to a big build in crude oil and distillate stocks in the US, the world's largest oil consumer, and as pressure mounted on OPEC to increase supply. Brent crude futures fell by 98 cents, or 1.2%, to $83.74 a barrel by 0034 GMT, while US West Texas Intermediate (WTI) crude futures tumbled by $1.32, or 1.6%, to $82.59 a barrel. "Crude oil lower as pressure mounted on OPEC to boost output. US President Biden led calls from major economies for the group to increase production beyond what has already been agreed," analysts from ANZ said in a note on Wednesday.
Asian stocks started off mixed Wednesday as traders evaluated another all-time high for US equities and a retreat in short-term sovereign yields ahead of the Federal Reserve policy decision. Australian shares rose, while South Korea declined. Futures fell for Hong Kong. Japan is shut for a holiday. S&P 500 and Nasdaq 100 contracts slipped. US shares edged up to records, buoyed by the resilience of company profits to rising input costs amid pandemic-related supply chain and labor upheavals. Treasury two-year yields joined a global slide in short-term rates unleashed by the Australian central bank’s dovish statement. The US yield curve steepened and the dollar climbed. Cash Treasuries won’t trade in Asia because of the Japan holiday. Australian bond yields declined. The dollar was steady. In China, Premier Li Keqiang said the economy is facing new downward pressure. Meanwhile, there was speculation an appeal to ensure there was adequate winter food supply and for people to stock up on essentials is linked to a widening virus outbreak that has already led to mobility curbs. The gyrations in short-term yields extend a period of heightened bond-market volatility as investors try to anticipate how hawkish central banks might become to quell inflationary pressures. The Fed is expected to announce that it will start tapering its massive bond purchases, but economists are divided on whether a rate liftoff will be next year or in early 2023.
Stocks
S&P 500 futures fell 0.1% as of 9:14 a.m. in Tokyo. The S&P 500 rose 0.4%
Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 0.4%
Australia’s S&P/ASX 200 Index rose 1.1%
Kospi index fell 0.3%
Hang Seng Index futures fell 0.2%
Currencies
The Japanese yen was at 113.93 per dollar
The offshore yuan traded at 6.4032 per dollar
The Bloomberg Dollar Spot Index was steady
The euro was at $1.1578
Infosys, Wipro and Vodafone Idea are among stocks to watch (Read here)
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