Stock Market Highlights: Indian equity benchmarks retreated from record highs to end lower on Friday as losses in metal and PSU banking stocks dragged the market. Broader markets, smallcap and midcap indices underperformed the frontliners. Among sectors, PSU banks, metals, pharma, realty and energy indices lost the most, while the private bank, media and financial services indices closed in the green.
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Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Bull momentum continued today and both benchmark indices touched fresh highs but investors showed signs of nervousness as the market witnessed a late bout of profit-taking towards the closing stages. Technically, benchmark Nifty maintained uptrend continuation formation which is broadly positive but due to temporary overbought situation, bulls may prefer to take a cautious stance near the 17,800 resistance level. For Nifty, 17,700 would be the immediate resistance level traders will have to look at and below the same, correction wave is likely to continue up to 17,450-17,350 levels. If the index trades above 17,700, the uptrend texture will continue up to 17,800-17,950 levels. Contra traders can take a long bet near 17,350 with a strict 17,300 support stop loss. Meanwhile, the Bank Nifty has formed a strong bullish formation and the structure suggests further upside if it succeeds to trade above 37,000.
Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian rupee ended flat against the US dollar this week, as persistent dollar demand from importers offset the impact of strong local equities. For the week, the unit traded in a 73.30 to 73.80 range. It had depreciated by 0.7 percent last week. Throughout the week, the markets witnessed dollar buying by oil companies and importers, but at the same time, we also witnessed corporate inflows and exporter covering which kept the rupee in a 50-paisa trading range.
On the charts, the USDINR Spot pair could see sideways momentum where resistance is at 73.90-74.10 levels. Support is at 73.25-73.00 levels. The USDINR Spot pair could trade in a range of 73.10-73.95 levels in the coming week.
Meanwhile, in the overseas markets, the dollar was on its way to end the 2nd week with consecutive gains. Technically, the Dollar Index above the $92.30 level could see a bullish momentum up to $93.15-$93.50 levels. Support is at $92.30-$91.95 levels.
Ajit Mishra, VP - Research, Religare Broking
Markets settled marginally lower as participants preferred to book some profits off the tables after the recent surge. It’s healthy to consolidate after a trending move and we may see further consolidation in Nifty ahead. Meanwhile, buoyancy in the banking pack, which holds considerable weight in the index, would help in capping the downside. In short, Nifty may hover within the 17,400-17,800 zone for the time being. Meanwhile, participants should maintain extra caution in midcap and smallcap space citing the possibility of further decline.
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty closed the week higher for the fourth consecutive week closing 1.24% up. The advance-decline ratio fell sharply to much below 1:1. This combined with huge volumes hints at some sort of distribution setting in the market; however, a positive weekly close still does not allow us to take a very negative view. 17,510 and 17,378 are the two supports for the Nifty.
Joseph Thomas, Head of Research, Emkay Wealth Management
The equity market remained extremely volatile during the day’s trading, moving from emphatically positive territory to close in the red, as selling came in at higher levels.
The numbers from the US, and Europe, the outcome of the central bank policy meetings due next week, and also the domestic developments around the positive impact of the government policies which were recently announced, and most of all the higher energy prices, are all factors that may be of some import for the markets next week.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities
The rupee witnessed another lacklustre trading session with the spot closing just 4 paise lower at 73.48 against the dollar. FPI flows and speculative selling was absorbed by alleged intervention from RBI. The rupee may continue to trade within a range of 73 and 74 with a downward bias against the greenback.
Rupee At Close | The rupee closed 4 paise higher at 73.48 against the US dollar on Friday, tracking the broad weakness of the American currency in the overseas market. The local unit opened at 73.49 per dollar against the previous close of 73.52 and witnessed an intra-day high of 73.42 and a low of 73.55.
Sachin Gupta, AVP - Research, Choice Broking
Technically, the Nifty index has formed a bearish candle at the top of the trend and is reserved from the resistance of Upper Bollinger band formation, which indicates some profit booking for the upcoming session. However, the bullish trend is still intact as the Nifty index is holding gains above 17,250 levels. Although we can expect some fight between bulls & bears along with the volatility, every dip would be a buying opportunity. At present, the Nifty may find the resistance around 17,800 levels while on the downside, 17,400 may act as support for the index.
Market This Week | Market gains for 4th straight week, Nifty & Sensex up over 1% each.
Manish Shah, Founder, Niftytriggers.com
Nifty settled marginally lower. It is the end of the week and the price action on the weekly charts suggests that the market is extended. If we draw a very step line that connects from the low of April 2021 and it has created a channel around it. Nifty is currently shy of the high of the channel line. The directional movement reading shows a strong underlying trend. Nifty is on track to move towards 18,000 in the forthcoming weeks.
On the daily chart, Nifty saw a one-day correction, and it was a sheepish decline. It was a bearish dark cloud cover. The pattern is out of context as Nifty is not at any significant resistance level. Nifty has a support at 17,450-17,400 as this is an area of prior swing high. Any drop to this zone will be a buying opportunity. On the upside potential of a rally towards 18,000-18,100 remains intact. Avoid short selling and be a buyer on declines.
Jay Thakkar, Marwadi Shares and Finance
Nifty has come off almost by around 100 points from today’s highs. India VIX is also up by almost 5 percent or so. Since yesterday we have been seeing that India VIX has closed in positive territory. So the volatility can continue from hereon as the markets are inching towards the all-time high levels and the uncharted territory as well.
As far as Bank Nifty is concerned, I think that 37,500 is very crucial support on the lower side. Till those levels are held, the overall short-term positional trend remains quite positive. There are around 38,500 that should be the short-term target on Bank Nifty from hereon.
Market At Close | Midcap underperformance keeps market breadth in favour of declines; NSE advance-decline ratio at 1:3
Market At Close | Market sees profit-booking at record highs, snaps 3-day gaining streak.
Market This Week | Here's how the market performed this week
-Market Gains For 4th Straight Week, Nifty & Sensex Up Over 1% Each
-Except Metal & Realty, All Indices Post +ve Returns, Media & PSU Bk Top Gainers
-Nifty Bank Gains Over 3% & Midcap Index Nearly 2% For The Week
-IndusInd, Kotak Bank, ITC, NTPC & Bharti Top Nifty Gainers
-BPCL, Tata Steel, HUL, UltraTech, Grasim & UPL Top Nifty Losers
-Zee Ent, Voda Idea, IRCTC, IndiGo Gain The Most Amongst Midcaps
Market At Close | Here are the highlights of today's trading session
-Market Sees Profit Booking At Record Highs, Snaps 3-day Gaining Streak
-Kotak Bank Helps Nifty Bank Close In The Green; Contributes 262 Pts
-Midcap Underperformance Keeps Market Breadth In Favour Of Declines
-NSE Advance-Decline Ratio At 1:3
-Nifty Ends 44 Points Lower At 17,585 After Hitting Life High Of 17,793
-Sensex Slips 223 Points To 58,918, Midcap Index 384 Points To 29,899
-Nifty Bank Rises 143 Points To End At A Record Closing High Of 37,812
-Kotak Bank, HDFC Bank & Bharti Lift while RIL, TCS & HUL Drag Nifty
-Metal Cos Slip On Speculation Of Hike In GST Rate, Tata Steel Top Loser
-PSU Cos See Profit Booking Following Thursday’s Sharp Rally, Nifty PSU Bank Falls 3%
-Airline Cos Move Higher Following Strong August Data, indigo Up 10%
-Zee Ent Ends With A Gain of 4% Following Brokerages’ Upgrade
Closing Bell | The Indian equity benchmarks retreated from record highs to end lower on Friday as losses in metal and PSU banking stocks dragged the market. The Sensex fell 125.27 points, or 0.21 percent, to 59,015.89, while the Nifty ended 44.35 points, or 0.25 percent, lower at 17,585.15. Broader markets, smallcap and midcap indices underperformed the frontliners.
Among sectors, PSU banks, metals, pharma, realty and energy indices lost the most, while the private bank, media and financial services indices closed in the green. Tata Steel, Coal India, SBI, TCS and Hindalco Industries were the top Nifty50 losers, while Kotak Mahindra Bank, HDFC Bank, Bharti Airtel, Eicher Motors and Maruti Suzuki were the top index gainers. Read here
Ashis Biswas, Head of Technical Research at CapitalVia Global Research
The market witnessed a small correction and an attempt to hold the level above the Nifty50 Index level of 17,600. The market suggests that 17,450-17,500 will be an important support zone for the market to stay positive in the short term. If the market is able to sustain the level of 17,450-17,500, market can witness higher levels of 17,850. The momentum indicators like RSI and MACD indicating positive momentum is likely to continue.
Market Watch: Prakash Diwan, Market Expert
There is no surprise in the fact that the markets needed some sort of a shakeout in the process of consolidating at these higher levels. The higher levels are what is predicated or indicated by the Nifty or the Sensex stocks but down the line some of the sharp moves that we saw in smallcaps and midcaps are very restricted to certain pockets or certain stocks. It wasn’t something that was all around in any case.
Within the midcaps, I wouldn’t be surprised if you see a very quick cheer in terms of what kind of sectors and companies are doing well. Pharma is something that has been on the sidelines for a while now and you could see that resurgence come. FMCG names. Metals, chemicals and autos are seeming vulnerable valuation perspective as well.
For long-term investors, I think this kind of correction is always healthy. The market is vulnerable, what excuse or trigger it needs, we don’t know but my sense is that there is lot in terms of anticipation of a correction and that is exactly why the positions are not overdone.
If some correction were to happen, it will probably happen swiftly but then it won’t keep on deepening because we don’t have that kind of a domino effect given the positions in the market right now.
Hemen Kapadia, KRChoksey Securities
Currently, the market is a bit overbought – whether it is Nifty or Bank Nifty. We are seeing some amount of negative divergence if you are looking at the Nifty. Even on the hourly charts, two-hourly charts – extreme near-term we are ripe for the correction. I am not saying it is going to be a big reversal decline but it needs to take a breather. It has run up too fast and probably in the next day or two we will have some clarity about its stagnating and probably cooling off a bit.
IIFL Home Finance inks co-lending pact with PNB
IIFL Home Finance said it has entered into a co-lending arrangement with Punjab National Bank (PNB) and aims to grow its loan book by 25 per cent from such partnerships. This is the fourth co-lending agreement signed by the company with banks, IIFL HFL said in a release.
Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS
The market selloff today seems mostly on the back of profit booking, following a stellar rally over the last few weeks. Since July 28th, Nifty has gained a whopping 15 percent. Meanwhile, during this period, the global markets barely moved higher, with the MSCI Emerging Market index advancing 4 percent and the DJIA being essentially flat.
Given this stellar outperformance, some sort of cool off or consolidation cannot be ruled out in the short term. That said, the overall trend of Nifty remains up and corrections, if any, should be used as buying opportunities.
For the next week, support for Nifty is seen between 17,440-17,295. If this support zone holds, we could see a retest of today's high and a possible attempt towards 18,000. However, if the support zone fails to hold, the index could be set for a correction towards 16,920, which represents the 38.2% retracement of the rally from July 28th.
Carsten Menke, Head Next Generation Research, Julius Baer
Yesterday’s US retail sales hit the gold and silver markets hard. The negative reaction fits the pattern of the past few weeks, whereby better or worse-than-expected economic data led to increased short-term and sentiment-driven volatility. Looking ahead, we remain convinced that any rebound in gold prices which is not backed by safe-haven seekers will reverse sooner or later, assuming that global growth remains in recovery mode. While silver has underperformed as of late, we believe it remains more vulnerable than gold.
We still see gold and silver in a moderate medium to longer-term downtrend, primarily driven by a further fading of safe-haven demand. Meanwhile, holdings of physically-backed gold products, our preferred gauge of safe-haven demand, are around 11% below last year’s peak.
We remain convinced that any rebound in gold prices which is not backed by safe-haven seekers will reverse sooner or later, assuming that global growth remains in recovery mode despite the ongoing spreading of Covid-19 variants. While silver has underperformed gold as of late, as visible in a rising gold/silver price ratio, we believe it remains more vulnerable, as holdings of physically-backed products remain well above pre-crisis levels.
Bajaj Finance | The company's board has recommended the appointment of Deloitte Haskins, GM Kapadia as joint statutory auditors.
Oil holds above $75 as storm-hit US supply returns slowly
Brent oil futures dipped on Friday but held above $75 a barrel, remaining on track for weekly gains of more than 3 percent thanks to the slow recovery in output after two hurricanes in the US Gulf of Mexico.
Brent crude futures fell 27 cents, or 0.36 percent, to $75.40 a barrel, erasing Thursday's 21 cent gain. US West Texas Intermediate (WTI) crude futures were down 39 cents, or 0.54 percent, at $72.22 after settling unchanged in the previous session.
JM Financial announces Tranche I public issue of upto Rs 500 crore of secured, rated, listed, redeemable non-convertible debentures
JM Financial Products Limited, the flagship NBFC arm of the JM Financial Group, announced Tranche – I public issue of Secured NCDs of face value of Rs 1,000 each.