A morning walk down Dalal Street | Market is likely to remain range-bound amid F&O expiry, stay stock specific

Market snaps three-day winning streak and closed in the red ahead of the crucial F&O expiry day on Thursday. But, the good news is that we saw some recovery in the last one hour of the trade which helped Nifty to climb above 11000 levels.

Deepening inversion of the US bond yield aggravated worries of a looming recession in the US which made investors worried when the sentiment is already fragile due to trade tension between the US and China and the sluggish pace of global economic growth.

BSE Midcap and Smallcap indices underperformed benchmark Sensex, closing with losses of 0.92 percent and 0.64 percent, respectively.

Going forward, the market participants would keep a close watch on currency movement and upcoming Q1FY20 GDP data. Globally, trade tensions between US-China is likely to induce volatility into the Indian markets, suggest experts.

The market would also react to FDI norms in various sectors of the economy to boost consumer and investor sentiment.

The rupee declined by 29 paise to close at 71.77 against the US dollar on Wednesday as fears of an impending global recession prompted investors to stick to safe-haven assets like the Japanese yen.

On the institutional front, FPIs were net sellers in Indian markets for Rs 935 cr while the DIIs were net buyers to the tune of Rs 359 cr, provisional data showed.

Big News:

The government on August 28 announced that it has approved 100 percent Foreign Direct Investment (FDI) through the automatic route in coal mining, its sale and all its associated infrastructure.

The government has also approved 100 percent FDI through the direct route in contract manufacturing, said Commerce Minister Piyush Goyal at the Cabinet briefing.

Goyal also announced 26 percent FDI with government approval in digital media. Currently, in the print media sector, 26 percent FDI is allowed through government approval route.

Technical View:

Nifty formed a bearish candle on the daily charts

Experts say as long as the Nifty holds 10,750 level, a sharp fall is unlikely and there could be rangebound trade in coming sessions.

The index bounced back from its 20-DMA and 5-DEMA on the daily charts

Market is likely to remain in a range amid August F&O expiry, traders are advised to focus on stock-specific opportunities rather than betting on index until it stabilised and witnessed some strength, suggest experts.

Three levels: 10,987, 11,129, 11200

Max Call OI: 11200, 11100

Max Put OI: 11000, 10800

Stocks in news:

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the sugar export policy for clearing surplus stocks. This policy meant for the sugar season for the current year involves an export subsidy of Rs 10,448 per metric tonne (mt) to sugar mills.

Coffee Day Enterprises has got a 45-day extension from the Registrar of Companies (RoC) for its annual general meeting for the financial year 2018-19.

Piramal Enterprises on Wednesday said it has deferred the issue of privately placed non-convertible debentures (NCDs) aggregating Rs 3,000 crore to a future date.

Technical Recommendations:

We spoke to Bonanza Portfolio and here’s what they have to recommend:

ICICI Lombard General Insurance: Buy| CMP: Rs.1,249.85 | Target: Rs 1,343 |Stop Loss: Rs 1,200| Upside 7.5%

Bata India: Buy| CMP: Rs.1,507.70 | Target: Rs 1,620 |Stop Loss: Rs.1,445|Upside 7.5%

Jubilant Foodworks: Sell|CMP: Rs 1,185.25 | Target: Rs 1,115 |Stop Loss: Rs 1,230| Upside 6%

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