Profit taking in sight amid global uncertainty

Stimulated by the decline in international crude oil prices, the renewal of regular FII inflows and the recovery of global markets; domestic markets recorded positive gains after three weeks of consolidation. BSE Sensex rallied nearly 1,000 points to 59,793, and NSE Nifty rose nearly 300 points to 17,833. Outperforming the benchmarks, the Nifty Midcap and Smallcap indices climbed 2% and 3.3% respectively. . Buying FII boosted sentiment in the market and was the reason for the outperformance in the broader markets. For the Nifty, 17800 – 18000 could be the troubled area where profit bookings can be expected due to global uncertainty. FII’s net buying during the week was nearly Rs 6,100 crore. So far in September, they have bought Rs 3,837 crore worth of shares on top of the Rs 22,000 crore purchased in August. Falling crude oil prices and constant buying by FIIs have helped the Indian rupee appreciate against the US dollar since its recent record low. The rupiah settled at 79.67 against the US dollar, down from 79.72 to the dollar on a week-on-week basis, but strengthened by 49 paise from the weekly low. Moody’s reaffirmed a stable outlook for India and noted that the country’s credit profile reflected important characteristics such as its large, diversified economy with high growth potential, a relatively strong external position and a stable domestic financing base for public debt. India’s merchandise exports are expected to grow by 11.4% to $114.4 billion in the July-September quarter of the current fiscal year. However, observers say the rise in exports in the second quarter of FY23 could be dampened by lower global commodity prices. The slowdown in the main trading partners, inflationary pressures and restrictive monetary policies around the world could also offset the gain in exports. The short-term direction of the market will be dictated by macroeconomic data, international crude oil prices, the movement of the rupee against the dollar and global indices.

After good listing gains recorded by Dream Folks and Syrma SGS, the primary market has become active again. Tamilnad Mercantile Bank will make its stock market debut on Thursday. Precision bearing cage manufacturer Harsha Engineers International will launch its IPO on September 14 with a price range of Rs314-330 per share.

Listening post: Europe is struggling to contain an energy crisis that could lead to blackouts, factory closures and a deep recession. generate electricity and heat homes. European officials say its energetic blackmail, aimed at pressuring and dividing the European Union as it backs Ukraine against Russia’s invasion. Europe’s energy crisis could trigger flashbacks to the Eurozone crisis. Meaningful reform of the European Union has always been in crisis, and this winter seems ripe for energy policy. As with the euro crisis a decade ago, a quick political compromise would risk leaving the job half done. There remains considerable disagreement between politicians in different countries on how best to approach what is a central problem. While the pressure should help to reach some sort of agreement, it also increases the risk of missteps. Reform of the electricity market is probably necessary in the long term, but embarking on such a complex task to resolve this winter’s crisis is risky. The EU’s firefighting response to the eurozone crisis more than a decade ago, which failed to create a genuine banking union, is an inconvenient precedent. Coordinated action to strengthen Europe’s relatively interconnected electricity markets would be less costly than national measures, would also improve overall energy security and avoid delaying decarbonisation. Stock markets should not ignore this problem and prepare for its outcome in the coming months.

Quote of the Week: “I’ll tell you how to get rich. Close the doors. Be afraid when others are greedy. Be greedy when others are afraid.” —Warren Buffett

Be prepared to invest in a bear market and exit in a boom market, according to the philosophy of Warren Buffett.

F&O / SECTOR WATCH

Reflecting the underlying bullish trend in the spot market and the rapid rotation of the sector; the derivatives segment experienced dynamic trading. Making a good comeback at the sector level Banks Nifty IT and PSU recorded gains of almost 4%. In the options segment, the maximum Call Open Interest (OI) was observed at 18,000 strikes, which could be a resistance in the short term; and the maximum Put OI was seen at 17,000 strikes, followed by 17,500 and 17,700. Bank Nifty continued its outperformance breaking the 40,000 level decisively to end the week with gains of over 2.5 %.

Implied volatility (IV) for calls closed at 16.36%, while that for puts closed at 18.16%. The Nifty VIX for the week closed at 18.31%. The OI’s PCR for the week closed at 1:42.

For the week ahead, the 18000 point level will act as a key psychological resistance for Nifty while the 17600-17550 area is likely to provide support on the downside. The bias should remain in favor of the bulls. Use declines to create new longs. The stock-specific action is expected to continue thanks to the news feed. Auto industry sources say that the pending order book in the passenger car segment has topped 10 lakhs of units. Out of the total order book, Mahindra’s new Scorpio N alone has booked more than 1 lakh units. Additionally, Hyundai and Kia have a pending order book of 1.25 lakh units each. Market leader Maruti Suzuki has a pending order book of over 3 lakh units. Battery manufacturers are also seeing strong demand. Buy Amara Raja and Exide for unexpected big wins. cement stocks are holding up well. Market players are expecting a revaluation of the sector after the closing of open offers for Ambuja Cements and ACC by the Adani group. Stay invested in the industry. Stock futures looking good are Aarti Inds, Amara Raja, Axis Bank, Gujarat Gas, Indian Hotels, Tata Power and Zee Tele. , Tata Motors and UPL.