Share Market LIVE: Sensex nose-dives ahead of closing, Nifty below 17700, support at 17500; Tech M top drag

Sensex and Nifty were recouping some intra-day losses nearing the closing bell but were still in the red. Sensex was down nearly 400 point while Nifty 50 was below 17800.

India VIX, the volatility gauge of domestic markets, was down 1.93% on Friday even though Dalal Street headline indices were deep in red. 

India share market bulls may take a breather for the next three to six months as expensive valuations limit returns on Dalal Street, according to Morgan Stanley. Global brokerage firm Morgan Stanley has downgraded India equities to equal-weight in its recent Asia Emerging Market strategy note, after similar downgrades by Nomura and UBS recently. “We take profits on our India OW, but remain structurally positive…,” Morgan Stanely said.

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Overall fundamentals are still strong for this counter but the market will hesitate to give valuations that it was enjoying before this event because such kind of risk will remain in the mind of investors. The roller coaster ride led to a sharp rise in option IVs i.e the value of OTM options, therefore, option writers and arbitragers are looking at it as a golden opportunity as uncertainty is out of the window for time being. The option writer may try to keep this counter range-bound for November. Santosh Meena, Head of Research, Swastika Investmart 

Broader markets were trading mixed on Friday. Nifty next 50 was up in the green, gaining 1%, while Nifty 100, Nifty 200, and Nifty 500 were down in red. Nifty Midcap indices were up in the green.

Canara Bank hit a 21-month high after it rallied 10 per cent on the back of heavy volumes. For the July-September quarter (Q2FY22), Canara Bank had posted a 200 per cent rise in net profit at Rs 1,333 crore on robust growth in non-interest income including revenue from trading and recoveries. It posted a net profit of Rs 444 crore in the year-ago quarter. Net NPAs reduced to 3.21 per cent in September 2021 from 3.42 per cent a year ago. Investor may take long position on dips for the target of 220 in near term. Ravi Singh, VP - Head of Research ShareIndia Securities

After the Ministry of Railways has withdrawn the decision to share the revenue earned from convenience fees collected by IRCTC in the ratio of 50:50 from November 1, the share of IRCTC bounced back from the previous lows. Technically also all moving averages are showing an uptrend but the RSI is still in the bearish zone. Investors may take a fresh long position for the target of 980 putting a stop loss of 800. Ravi Singh, VP - Head of Research, ShareIndia Securities

Banks will be closed for up to 17 days across the country in November 2021. The banks remain open on the first and third Saturdays every month and close on the second and fourth. There is also going to be one long weekend in states where banks are closed for Guru Nanak’s birthday on 19 November 2021. Except for Bengaluru, all the banks will observe a holiday on Diwali Amavasya (Laxmi Pujan).

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Sensex and Nifty 50 were up from intra-day lows on Friday, attempting to recoup some of yesterday’s losses. S&P BSE Sensex was trading flat, hovering around 60,000 while Nifty 50 was nearing 17,900 mark. Broader markets were mixed with some small-cap indices down in the red. Bank Nifty was up 0.40% but still below the 40,000 mark. India VIX was below 18 levels. Amid the mixed market momentum, Vodafone Idea was the most active stock on the NSE on Friday morning. More than 8.6 crore shares of the company moved between investors as the stock gained 0.52%. Among value toppers, IRCTC was top of the list as shares worth more than Rs 2,360 crore exchanged hands on NSE as the stock plummeted 20%.

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IRCTC share price recovered some of its losses on Friday morning after reports suggested that the government would roll back its revenue sharing order.

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In Q2FY22, consolidated revenues of Motilal Oswal Financial Services grew by 46% YoY at Rs 1,094 crore, consolidated PAT grew by 81% YoY to Rs 536 cr including gains on investments (Rs 267 cr). 

Railways withdrawing decision on IRCTC says DIPAM Secy. Yesterday, Govt has asked IRCTC to share a convenience fee from ticketing revenue on a 50:50 basis.

Gold is taking resistance around 48300. This is proving to be strong resistance as the previous swing high was also around 48500 in the month of July. Gold is showing signs of exhaustion as RSI_14 has made a double top and now has started declining. The bullish momentum that started when gold breached $1800 is fading and we expect gold to remain sideways next week. Major data for next week would be US Non-farm payroll data on Friday.

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At the higher end of the price band, Nykaa IPO is expensively priced at a PE ratio of 840 times FY21 earnings per share (on a post-issue basis). The valuation appears to be high, given that the company turned in a marginal profit in FY21. On a price-to-sales basis, Nykaa is priced at 21.5 times FY21 earnings per share. There are no immediate listed peers for the company, and hence, it could enjoy a scarcity premium in India. Given the company’s market leadership status, strong topline growth, robust outlook, positive sentiment due to marquee investors and promoter group, investors who wish to take exposure to an under-penetrated online cosmetics e-tailing business could consider investing in this issue, SEBI-registered investment advisor INDmoney said in a report.

The three-year reappointment is slightly longer than the usual two-year extension that has been the norm recently. In our view, the  reappointment of Governor Das, a former Economic Affairs Secretary and a former member of the finance commission is a sign ofcontinued trust from the government. Under Governor Das, the central bank has done the heavy lifting to support the economy through the COVID crisis, with fiscal policy playing a supportive role. We also view the governor’s reappointment as a vote of confidence in the RBI’s policy stance. Rahul Bajoria, Chief India Economist

IRCTC share price plummeted 15% on Friday morning to hit the lower circuit as the investors reacted to the government’s revenue sharing order that may cut the company’s earnings by as much as 36%. Indian Railways Catering and Tourism Corporation (IRCTC) on Thursday announced that the government has asked it to share 50% of the convenience fees revenue with the Ministry of Railways starting 1 November 2021. IRCTC share price fell Rs 775.70 per share on Friday.

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Given the company’s strong topline growth, robust outlook due to digital payments opportunity, but steep valuations, investors who wish to take exposure to an upcoming novel fintech space could consider investing in this issue. However, given the aggressive valuations, the issue may not see high listing gains, SEBI-registered investment advisor IND money said in a report

The index went into a free fall immediately upon opening. 17600 is the next level of support and if we can hold on to that, there is every possibility that we take a U-turn from here and resume the upside trajectory. On the flip side, if we break 17600 on a closing basis, the Nifty can slide further towards 17200. Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

COMEX gold trades marginally lower near $1798/oz after a 0.2% gain yesterday. Gold has continued to trade in a broad range near $1800/oz as support from weaker US dollar, global growth worries and rising inflation concerns are countered by relative stability in equity markets. Mixed ETF activity also shows lack of confidence in investors. Gold may continue to trade in a range however increasing challenges to global economy may increase its safe-haven appeal and keep prices supported. Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities

BSE Sensex tumbled 5.3 per cent from its record-high of 62245.43, touched on 19 Oct 2021.

Nifty 50 index plunges 5.6 per cent from all-time high of 18,604 levels

The story on Rupee seems mixed. The sell-off in domestic equities could keep Rupee on its toes, but flows on account of IPOs and corporate borrowing could restrict the depreciating move. Hence, the short-term range for the USDINR is pegged from 74.50 to 75.20. Amit Pabari, managing director, CR Forex Advisors

India's gold demand has seen a 47 per cent year-on-year jump in the July-September quarter to 139.1 tonnes, following stround in economic activity and recovering consumer demand, the World Gold Council said in a report. According to the WGC, gold demand in India is bouncing back to pre-COVID levels and going forward the outlook looks bullish. Also, The advance estimate yesterday showed that the U.S. Q3 GDP rose 2% versus the market’s expectations of a 2.7% increase. The MCX Gold is likely to be range-bound this week with a bullish bias.

Buy Zone Around - 47850 for the target of 48150Sell Zone Below- 47700 for the target of 47500 Ravi Singh, Vice President & Head of Research, ShareIndia

Nifty PSU Bank, Nifty Private Bank stocks tumbled over 2%

NTPC, L&T, Bajaj Finsrv, IndusInd Bank, Sun Pharma, Axis Bank, Housing Development Finance Corporation (HDFC), State Bank of India, M&M, Kotak Mahindra Bank were top Sensex dragger. 

Tata Steel and Tata Consultancy Services were the only stocks trading in the green.

Bank Nifty tanked over 2 per cent to 38,677 levels in the opening deals

BSE Sensex tumbled over 600 pts or 1.04 per cent to 59,361.17, while the Nifty 50 index gave up 17700

The initial share-sale of FSN E-Commerce Ventures Ltd, which runs online marketplace for beauty and wellness products Nykaa, was subscribed 1.55 times on the first day of subscription on Thursday

Comex gold is trading in a sideways zone facing resistance at $1800. ECB's Lagarde says inflation is expected to rise further and expects inflation to ease in course of 2022 which ramp up the possibility of bullish momentum to continue in precious metals. In MCX gold has resistance at 48300 above this level it may test 48800 levels. It has support at 47600. Abhishek Chauhan, Head of Commodity & Currency, Swastika Investmart

The government asking IRCTC to share a 50% convenience fee with the Railway Ministry is yet another instance that should warn investors of undue optimism while investing in PSU stocks. Enhancing shareholder return is not the objective of PSUs. So investors have to be careful while chasing PSU stocks, even if they are cheap. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services

BSE Sensex was up 80 points to trade above 60,000 level, while the Nifty 50 index fell 65 pts to trade at 17790 in pre-opening session on Friday

Fino Payments Bank has successfully closed its anchor book ahead of its IPO starting 29th October 2021. As per a stock exchange notification, marquee investors like Fidelity, HSBC Global, Pinebridge, Birla Mutual Fund, Motilal Oswal, TATA Mutual Fund, SBI Life, Invesco, BNP Paribas and Societe Generale have been allotted shares among others. The IPO is aiming to raise Rs 1,200 crore of which 75% will be allocated to institutional investors. Non-institutional investors comprising high net worth individuals, retail shareholders and employees can invest in the remaining 25% of the book. The IPO also comprises Rs 300 cr as a primary issuance.

Since the market is a bit oversold, we may see some relief move in between; but traders should not get carried away by such rebounds. On the higher side, 18000 – 18100 would now be seen as immediate hurdles and any bounce back towards it, should be used to lighten up longs. On the flip side, we may see this corrective move extending towards 17700 – 17600 – 17450 in the coming days. All eyes are on the banking space going forward because initially it was a saviour and has become the culprit now. So, it would be interesting to see how it moves going ahead, which is likely to dictate the direction for the overall market.

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Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Hyderabad: The price of petrol and diesel were increased by oil marketing companies for the second consecutive day on Thursday. Petrol in the national capital today costs Rs 108.64 per litre, up by 35 paise since yesterday. Meanwhile, diesel in the capital city was retailing at Rs 97.37 per litre, a 35 paise increase. Petrol and diesel rates have increased 21 times so far in October, hiking the price of petrol by Rs 7 per litre and Rs 7.5 per litre for diesel. Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise the fuel prices daily in line with benchmark international price and foreign exchange rates.

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Nifty slipped below the crucial support zone of 18,000. Going ahead, 17720-17630 range is the key support zone while resistance will come at 18,180 levels. Nifty closed below its 20 day SMA which is negative for the market. The overall structure shows the short term range for Nifty has shifted lower & it is now expected to trade in the range of 17650-18220 during the next few sessions. A momentum indicator MACD suggested negative crossover on the daily time-frame, which confirmed a bearish move for the upcoming sessions. Aprajita Saxena, Research Analyst, Trustline Securities

BSE-listed companies such as BPCL, Adani Power, Dr Reddy’s Labs, Shree Cement, UPL, Vedanta, Adani Transmission, Apollo Tyres, Bandhan Bank, Barbeque-Nation Hospitality, Bharat Electronics, Cadila Healthcare, CARE Ratings, Castrol India, Chemplast Sanmar, LT Foods, Dalmia Bharat Sugar and Industries, Dixon Technologies (India), Emami, Embassy Office Parks REIT, Equitas Small Finance Bank, Escorts, Exide Industries, GAIL (India), Glaxosmithkline Pharmaceuticals, Indigo Paints, JK Lakshmi Cement, JSW Energy, Oberoi Realty, SAIL, Sumitomo Chemical India, TTK Healthcare, Varun Beverages, VIP Industries, and Voltas.

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In overnight trade on Wall Street, the Nasdaq Composite hit a record high on Thursday. The Dow Jones Industrial Average was up 137.92 points, or 0.39%, at 35,628.61, the S&P 500 was up 33.32 points, or 0.73%, at 4,585.00, and the Nasdaq Composite was up 165.59 points, or 1.09%, at 15,401.42.

Asian stock markets were trading mixed in early trade. Japan’s Nikkei 225 climbed 0.12% while the Topix index was flat. South Korea’s Kospi gained 0.57 per cent.