Dated: 05/10/2024
As the first week of October series ended the Bears regained control over the Dalaal Street while Bulls remained laggard behind the bars. Nifty fell last week with more than 4.50% with accurate wiping out 1164.35 points i.e. net negative of 4.65% in a single week wiping out nearly 10 Lac crore of investors wealth. Bears have now upper hand after almost 4 months since Election volatility has settled down in June.
Along with Nifty Sensex too tumbled more than 4.50% with net negative of almost 3883.40 points i.e. net loss of 4.75% for the week giving biggest loss sine General elections volatility got over on the June 2024. While Bank Nifty too didn’t held back & followed the process of shredding over the gains with FII’s selling whopping Rs. 40,000 cr. in a single week biggest in long time. Bank Nifty shred 2372.25 points last week with net negative of 4.60% for the week.
Unlike previous to last week FII’s now turned net negative with entirely shredding their holding heavily with whopping selloff of more than Rs.40,000 cr. with net sell of Rs. 40,511.50 cr. for the week while DII’s remained good buyer’s as well as supporter of the broader markets which may appear from next week with net buying of Rs. 33,074.39 cr. last week. However, the PSU banks like PNB, SBI etc & other heavy weights like Reliance Industries & Jio Financials may outperform the broader markets.
October month generally remains on the sideline with no major potential upside but the crucial supports could be found anywhere near 24800-25100 kind of levels while the potential upside from these levels could not be surpassed above 25900-26000 kind of levels with Nifty now finding it difficult to make another ATH at least in the month of October 2024 moreover remaining months could have a different stories ahead.
In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:
Domestic News:
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SEBI in its recent meeting redefined the risk structure of retail specifically in the derivatives segment but curbing few current traditions with new one.
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Few highlights of the SEBI implementations:
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Qualification for research analysts and investment advisor has been revised
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Number of scrip’s eligible for trading under option T + O has been increased [phases from 25 to top 500].
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Optional block deal window to introduce T+O settlement cycle.
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Investor can now trade using UPI block mechanism [similar to ASBA] OR 3 in1 trading facility in additional to current methods
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Qualified stock brokers must offer one of these two options. Stock broker can offer access to optional T+O to investors.
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Rationalization of insider trading. SEBI has made Strick norm for insider trading.
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Changes in Regulation for IAs, RAs to simplify compliance requirement
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REVIEW AND APPROVAL PROPOSAL- Only SEBI registered broker or advisor can give advice and do research analysis to facilitate ease of doing business.
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New class asset is introduced for high-risk investors in MF which is of 10 lakhs for PMS advisory equity and derivatives.
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Expanded the scope of optional T+O settlement cycle. Institution operating including FPI, MFs.
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To facilitate speedier disposal of matters related to certain types of violations- Amendments to the SEBI regulation.
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Fast right issue -Rights Issue to be completed in 23 working days from the date of Issuer’s Board Meeting Approving Rights Issue, as against present average timelines of 317 days.
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Increases Minimum Trading Amount for FNO From ₹ 5 lakh to ₹ 15 lakh
International
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As tension in Middle East escalated with Iran firing more than 180 missiles into Israel, the impact was felt on DALAL STREET too with Sensex falling over 3800 point as investors feared the impact of the war on crude oil prices and global supply chain.
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More than 700 Swedish companies went bankrupt in September, with real estate companies among hard hit.
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Tesla is facing widening industrial in Sweden after a New union stepped into support a nearly yearlong strike by workshop staff.
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ECBs Centeno says inflation now is very close to 2%
Meanwhile “Nifty IT” sector continues to have its crucial support within the pre-defined range of 40000-41500 till the time this remains safe the broader trend in this sector is likely to remain unchanged i.e. bullish in short term as well as long term. The pre-defined upside potential of “Nifty IT” remains at 45000 on an immediate basis i.e. In short term while our positional view towards 53000 mark till March 2024 remains intact in the second half of the FY 2024-25. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus.
Advance tax collection in FY till June 15 surged 27.6% to ₹1.48 lakh crore, with ₹1.14 lakh crore as corporate tax and ₹34,362 crore as personal income tax, indicating a strong economy and corporate performance.
The Centre’s gross tax collections (post refunds but before transfers to states), stood at Rs 4.6 trillion in the first two-months of the current financial year, 15.9% higher than the year year-ago level, data released by the Controller General of Accounts (CGA) showed on Friday. This is against 10.6% annual growth pegged in the Budget for FY25.
Net tax revenue (after refunds and after devolution to states) during April-May, stood at Rs 3.19 trillion, accounting for 12% of the Budget estimate of Rs 26.02 trillion. However, during the same period of FY24, net tax revenue had accounted for about 16% of the Budget target.
Now when we enter into the Institutional segment FII’s turned highly negative last week with almost net negative of whopping Rs. 40511.50 cr. while the DII’s were net buyers supporting the broader markets which could appear from next week on the screen with net buying of whopping Rs. 33074.39 cr. last week.
Nifty last week was hammered strongly by the FII’s selling of more than Rs.40,000 cr. which pushed the Nifty down by almost 4.65% i.e. down by almost 1164.35 points for the week. Investors / Traders left be fizzled in broad day light. Nifty tested low’s of 24966.80 to give a close at 25014.60 with net loss of 4.65% last week. Nifty could find its crucial support levels of 24800-25100 with potential upside in the month of October 2024 could be 25900. However, the entire expected move could be supported by the PSU banks like PNB, SBI etc & other heavy weights like Reliance Industries & Jio Financials along with “Nifty IT” sector may outperform the broader markets entirely.
Sensex on the other hand also remained week with massive FII’s selling leaving investors / traders be fizzled with loss of almost 3883.40 points i.e. net loss of 4.75% for the week. However the broader index could find its support within the pre-defined range of 79000-81000 with potential upside of 84000-85000 in the October 2024 series. However, the entire expected move could be supported by the PSU banks like PNB, SBI etc & other heavy weights like Reliance Industries & Jio Financials along with “IT Sector” may outperform the broader markets entirely.
Bank Nifty is on the verge of a crucial support levels of 49000-51500 with now potential upside of 53000-54000 in the coming weeks ahead. This time broader range could be supported by PSU Banks with PNB & SBI supporting the entire move solely since FII’s turned net negative.
In Nifty Financial Services immediate support could be found anywhere between 22500-23100 with potential upside towards 24600-25000 kind of levels.
On the contrary the entire “Nifty IT” sector continues to have its crucial support within the pre-defined range of 40000-41500 till the time this remains safe the broader trend in this sector is likely to remain unchanged i.e. bullish in short term as well as long term. The pre-defined upside potential of “Nifty IT” remains at 45000 on an immediate basis i.e. In short term while our positional view towards 53000 mark till March 2024 remains intact in the second half of the FY 2024-25. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus.
Till August 2024 the number of Demat Accounts has risen to whopping 17.11cr. this not only helps the capital markets directly but also directly to Equity investments.
The monthly SIP in Indian markets now raised at Rs. 23000 cr. per month.
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:
Nifty CMP: 25014.60
Nifty Immediate Target : 25900
Nifty Immediate Crucial Support: 24800-25100
Sensex CMP: 81688.45
Sensex Immediate Target: 84000-85000
Sensex Immediate Crucial Support: 79000-81000
Bank Nifty CMP: 51556.40
Bank Nifty Immediate Target: 53000-54000
Bank Nifty Immediate Crucial Support: 53000-53700
Nifty Financial CMP: 23660.05
Nifty Financial Crucial Target: 24600-25000
Nifty Financial Crucial Support: 22500-23100
Nifty IT CMP: 41912.50
Nifty IT Potential Upside: 45000 / 53000 (As the case may be)
Nifty IT Crucial Supports: 40000-41500
Stock on Radar:
Large Caps:
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PNB (CMP 104): This large-cap PSU bank looks good to accumulate here at CMP 110 with strict SL based at 100 for an estimated possible target of 125 in no time.
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Jio Financials (CMP 338): This large cap NBFC counter has been on our radar since subdued levels of 230-250 & still looks for a poised upside from here onwards 338 with strict SL placed at 300 for an estimated possible target of 520 in 3 months time frame.
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Oil India (CMP 573): This large cap oil counter looks good to add here at CMP 573 with strict SL placed at 530 for a potential upside of 650-655.
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Reliance (CMP 2773): If Nifty has to inch higher then this counter has to perform with possible announcement of Bonus this month this particular counter remains an attractive play. One can add here at CMP 2773 with strict SL placed at 2600 for an estimated possible target of 3400 in 2 months time frame.
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SBI Cards (CMP 743): This large cap has been on our radar since subdued levels of 700 & beneath & still looks good to accumulate here at CMP 743 with strict SL placed at 720 for target 1000 & above in 2 months time frame.
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Hind Zinc (CMP 517): This large cap metal counter looks attractive to add here at CMP 517 with strict SL placed at 470 for an estimated possible target of 590.
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PFC (CMP 464): This large cap PSU counter looks good to accumulate here at CMP 464 with strict SL placed at 435 for an estimated possible target of 500-525.
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LIC (CMP 971): This large ca counter looks like is on the attractive price range one can accumulate here at CMP 971 & can add more 920 SL placed at 880 expect an upside potential of 1200+ kind of levels.
Mid- Caps:
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IRB Infra (CMP 59.69): This mid-cap reality counter looks like is all done for a sideways consolidation here at CMP 59 with potential SL placed at 54 this counter is poised for 80 in 2 months time frame
Small & Mid-Caps:
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Omaxe Limited (CMP 113): This small cap reality counter is ready for a poised upside from these levels of 105-113 with strict SL placed at 90 with a potential upside of 200 within a 1 yr time frame.
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Gandhar Oil (CMP 215): This Oil & refinery small cap counter looks good to accumulate here at CMP 215 with strict SL placed at 170 one can expect an upside potential of 320 in a year time frame.
About the Author:
Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 12+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.
He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.
Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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