Traders’ Diary: Nifty has support at 11,100 level
For now, Nifty can remain sideways with a negative bias. Traders can initiate short position on any breach of the 11,100 mark and look for a modest target of 11,020 with a stop loss above the day’s high
The medium-term moving average is placed at 11,134, and Nifty may see a bigger fall on a close below this level. The immediate support for the index lies at 11,036
Nifty has formed an Inside bar on the daily chart. The breakout range is between 11,108 and 11,294. As per the wave structure, there is scope for the last leg of the pullback to play out on the upside. If the bulls manage to surpass the swing high of 11,294, Nifty can stretch towards 11,370-11,400
Nifty failed to hold its gains and selling pressure was visible on every small bounce. Nifty formed a Bearish Candle on the daily scale and till it holds below 11,250, it can extend its weakness towards 11,118 and then 11,000 levels, while on the upside hurdle is seen at 11,250 and 11,333 levels
Nifty’s immediate support stands at 11,100, a trade below which may extend the ongoing correction to 11,070-11,030 range where the 200-DMA lies. A trade above 11,230 with good volume can trigger a short-covering rally towards 11,300-11,375
In the near-term, we expect volatility to continue in the backdrop of US-China trade tension as well as weak domestic cues owing to nervousness surrounding elections. Further, oil price and rupee-dollar movement will also be on investors’ radar
Broader market continues to trade with a negative bias with pressure seen in the midcap space. Support is seen in the range of 10850-10900 and we expect the same to hold going ahead. Volatility to remain high on account of the upcoming election results. Post the recent correction, we remain structurally positive above 10850 and await broader market health to improve before initiating aggressive longs.
CLOSING BELL: Sensex gives up 240 pts gains, ends 204 pts lower; Nifty barely holds 11,150; YES Bank plunges 8%
Oil supply drops as Iran sanctions bite: IEA
- The world's oil supply fell last month, the International Energy Agency said Wednesday, amid rising global tensions as US sanctions on Iran tightened and OPEC+ members produced less crude in line with their pact.
- In its latest monthly report on the global oil market, the Paris-based IEA said that while geopolitics and industry disruptions were clouding the outlook it believes that the market balance is set to flip from surplus into deficit, a development that would favour efforts by oil producing nations to keep prices high.
As of now, the market is not positioned for a unstable coalition that is our view. So, either ways if there is a stable government then I think the markets will focus on fundamentals and the recovery from the current down cycle that we are seeing. But, if there is a unstable coalition we might see a further round of uncertainty and volatilities in the market, there still might be some downside left.
- According to State Street Global Advisors, U.S. President Donald Trump’s latest tariff spat with China has spooked investors so much that they’re unlikely to acquire stocks until a deal is reached.
- The renewed trade war between the U.S. and China has removed one of the main catalysts for this year’s market rally, which lacked the conviction of many investors.
- It only took a few tweets for volatility to surge as global equities erased about $3 trillion in market value
- Indian voters look determined to shatter past turnout records this election.
- Going by the trend seen till the end of the sixth phase of voting on May 12, brokerage Nomura India has projected that the ongoing elections may see record voter turnout of nearly 67 per cent, which would surpass the previous record of 66.4 per cent see during the 2014 Lok Sabha polls.
Sugar production likely drop 8.4 pc; to fall for 2nd straight year in 2019-20: USDA
Trade war is not in interest of US or China
Big names on the list included Adani Ports and Special Economic Zone, The New India Assurance Co, Indraprastha Gas, Mannapuram Finance, Bharat Petroleum Corporation, Jet Airways (India), Bharat Electronics and Oil India, among others. As many as 31 companies on the list are liable to pay a fine of Rs 4,50,000 each.
- Foreign brokerage UBS says the risk of a full-blown trade war between the US and China has increased, but hopes the issue will be resolved in the next couple of months without the US raising tariffs on the rest of $300 billion worth of Chinese goods.
- It said India has not been able to gain much from the trade war and has managed only a marginal growth from the increment that it was already witnessing from usual diversification away from China.
Stocks that hit fresh 52-week lows on NSE
Monsoon to hit India on June 6: IMD
- Largecaps are the place to be on Dalal Street as investors navigate multiple headwinds and brace for key event risks in the foreseeable future.
- In signs of acute risk aversion, India’s top fund managers are currently betting on the bluest of the blue chips – leaders from banking, oil & gas, auto, FMCG and IT. These are the sectors that can potentially be on the forefront in the next bull run.
Union Bank falls on widening Q4 net loss
The majority state-owned lender posted March-quarter loss of Rs 33.69 billion, or $14.2 million, on Tuesday, while provisions for non-performing assets rose by 2.6 per cent. UBI's forward PE of 19.96 is above the sector average of 18.31.
About 6.6 million shares of the company changed hands in early trading hours, compared to 30-day average of around 9.2 million shares. In comparison, peers State Bank of India has a forward PE of 54.47 and Bank of India of -3.28.
Why Shyam Sekhar stays away from IPOs
I just deeply distrust #IPO's. They have no way of protecting my interest against an army of others acting against… https://t.co/CFjPINwHst— Shyam Sekhar (@shyamsek) 1557885856000
Nestle rises 3% as brokerages stay positive post March quarter numbers
- Shares of Nestle India climbed nearly 3 per cent in morning trade on Wednesday, a day after the company reported a 9.25 per cent rise in profit at Rs 463.28 crore for the first quarter ended March 31, 2019.
- Following the March quarter numbers, global brokerage CLSA maintained its outperform view on the stock with an unchanged target price of Rs 11,750.
- Citi maintained its buy rating on the stock with a target price of Rs 12,480 per share, underscoring that the focus on innovation is likely to remain a key growth driver for the company.
- Shares of YES Bank fell as much as 4.8 per cent to Rs 148.30, its lowest since November 29, 2018.
- The stock broke below support at Rs 157.40, the 50 per cent Fibonacci projection level of the downtrend from August 20, 2018, high to November 29, 2018 low (wave A).
- This breakdown suggests the stock may test a support at Rs 127.05 in the near term, the 61.8 per cent projection level.
Rupee gains 23 paise to 70.21 vs dollar in early trade
Forex dealers said, investors sentiments were buoyed after US President Donald Trump on Tuesday hoped that the world's top two economies would be able reach an agreement.
The rupee opened strong at 70.32 at the interbank forex market then gained further ground and touched 70.21 amid a positive opening in domestic equities, displaying gains of 23 paise over its last close.
DHFL declines over 4% on rating downgrades
Icra downgraded the PTCs issued under six mortgage loan securitisation transactions by DHFL, a PTI report said.
The rating of these instruments has been downgraded from BBB (SO) to AA -(SO). The Icra downgrade followed a downgrade from Crisil on Monday.