Morning Outlook 28th September, 2022

NIFTY:

The NIFTY opened at 17110.90 with a gap up of 94 points. Prices moved further higher but soon found resistance and turned down after recording its intraday high at 17176.45. Prices have seen a sharp intraday fall and went below 17000 by erasing all the gains. The index found support around 16950 and moved up after recording its intraday low at 17942.35. Another decline came and the prices have recovered in the last 30 minutes of trading. The index finally closed at 17007.40 with a loss of just 8.90 points or 0.05% down. OIL GAS outperformed today by ending 1.13% up followed by IT, and FMCG which ended up by 0.97% & 0.64% respectively. BANK and FINANCIAL under performed today and led the bears. It was the fifth consecutive trading day when the index recorded a lower closing tick. The short-term trend is down. A strong support zone is visible around 16800 – 17000. Previous support at 17200 should now act as resistance. The INDIA VIX, a benchmark index for volatility is now moving around 22 suggesting volatility is very high which is unfavourable for the bulls. A move below 20 will be the first sign of a stable market. We should now wait for prices to form a consolidation. Till then avoid trading the index.

BANK NIFTY:

The BANK NIFTY opened at 38811.70 with a gap up of 150 points. The index moved further on the upside but soon the rally fizzled out and prices moved lower after recording its intraday high at 39050.50. Prices have found intraday support around 38500 and turned up but later formed a trading range that eventually broke on the down side. A sharp decline came, and prices recorded its intraday low at 38184.90. The index then bounced up in the last 30 minutes of trading and finally closed at 38520.05 with a loss of 141 points. PVT and PSU BANKS both indices have performed almost the same today, saw a mild decline, and closed lower by 0.40% & 0.21% respectively. Within the index, in terms of points, FEDERAL BANK contributed the highest on the upside while KOTAK BANK contributed the lowest. BANK NIFTY moved very volatile today and closed lower for the fifth consecutive trading day. A gap-up opening did not sustain, and prices have spent most of the time moving in to negative territory. The short-term trend is down. Support is now visible at around 38000 while resistance is visible at around 39500. As we have mentioned yesterday, we should wait for this decline to be stopped and then form some kind of consolidation. As of now, we should avoid trading the index and wait for an adequate set up to emerge.

TECHNICAL PICKS

DERIVATIVE PICKS

TOP DELIVERY PERCENTAGE

UPCOMING ECONOMIC DATA

NEWS UPDATES

• Benchmark indices ended on flat note in the highly volatile market on September 27. At Close, the Sensex was down 37.70 points or 0.07% at 57,107.52, and the Nifty was down 8.90 points or 0.05% at 17,007.40. About 1836 shares have advanced, 1483 shares declined, and 125 shares are unchanged. Cipla, Tata Consumer Products, BPCL, Power Grid Corporation and Shree Cements were among the top gainers on the Nifty. Losers included Hero MotoCorp, Adani Ports, Titan Company, Tata Steel and Kotak Mahindra Bank. Selling was seen in capital goods, power, auto, metals and financial names, while buying was seen in pharma, oil & gas, FMCG and IT names.

• Nazara Technologies Ltd. declined after the Tamil Nadu cabinet approved an ordinance to ban online gaming, involving betting, in the state. The stock of the online gaming platform fell as much as 4% intraday on Tuesday, and is on course to log losses for the third session in a row. Over the last three days, the scrip has dropped more than 12%.

• The 10-year bond yield rallied for the second straight session on Tuesday, defying a broader selloff in Asia, amid a fall in crude and bets on the inclusion in the global bond indices At 12.25pm, the 10-year bond yield was trading at 7.299 percent, down 6 basis points from its previous close of 7.359 percent

• India’s power ministry is proposing a nearly $2.5 billion incentive plan to encourage domestic manufacturing of grid-scale batteries, aiming at bringing down the cost of energy storage to speed up its energy transition.

Source: Economic Times,  Indian Express, Business Today, Livemint, Business Standard, Bloomberg Quint

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