Market Headstart: Nifty may open flat amid cautious global cues; SBI Life, Sudarshan Chemicals top buys

The Indian stock market is expected to open on a flat to negative note on September 30 following cautious start by its Asian peers as investors looked to how Chinese financial markets will react to the news the US administration is considering delisting Chinese companies from US stock exchanges.

Experts are of the view that the market may see some consolidation due to sharp gains during the previous week. The Nifty50 has begun the consolidation phase after a massive rally. All short-term indicators have moved to overbought levels which cap the upside for the time being.

"Nifty has the potential to test 11,700-11,800 in the near future, so any intermediate dip should be considered as a buying opportunity. We still see limited participation so suggest caution while choosing stocks," said Ajit Mishra, Vice President- Research at Religare Broking.

Trends on SGX Nifty indicate a flat to negative opening for the broader index in India, with a 7 points loss or 0.06 percent. Nifty futures were trading around 11,578 level on the Singaporean Exchange.

On September 27, the 30-share Sensex closed with a loss of 167 points, or 0.43 percent, at 38,822.57, with 20 stocks in the red, while the Nifty index finished 59 points, or 0.51 percent, lower at 11,512.40. Among the 50 stocks in the index, 39 suffered losses.

The rupee spurted by 32 paise to close at a nearly two-month high against the US currency on Friday as crude oil prices receded following reports that Saudi Arabia had agreed on a temporary ceasefire in Yemen. The domestic currency closed higher by 0.44 percent at 70.56 to the US dollar, a level not seen since August 2 when it had ended at 69.60.

Easing crude oil prices provided a fillip to the local currency that reversed losses in the mid-session and climbed to an intra-day high of 70.53, before finally ending at 70.56.

On the institutional front, foreign institutional investors (FIIs) sold shares worth Rs 213.6 crore, while domestic institutional investors (DIIs) bought shares of worth Rs 458.68 crore in the Indian equity market on September 27, as per provisional data available on the NSE.

Stocks in news:

Reliance Capital: The company has concluded the transaction with Nippon Life Insurance Company of Japan to sell its stake in Reliance Nippon Life Asset Management.

Kajaria Ceramics: Kajaria Tiles Private Limited, a wholly-owned subsidiary of the company, will start the commercial production of tiles on September 29.

Glenmark Pharma: Shareholders have approved a proposal to raise up to $200 million (about Rs 1,413 crore) through the issuance of debt securities.

Lakshmi Vilas Bank: Reserve Bank of India has initiated prompt corrective action for the bank. Also, shareholders have approved the plan for raising up to Rs 1,000 crore by issuance of securities.

Technical Recommendations:

We spoke to Sameet Chavan, Chief Analyst- Technical & Derivatives at Angel Broking and here’s what he has to recommend:

SBI Life Insurance: Buy | LTP: Rs 842.50 | Stop loss: Rs 794 | Target: Rs 927.

Sudarshan Chemicals: Buy | LTP: Rs 375.60 | Stop loss: Rs 345 | Target: Rs 430.

(Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.)