The Indian market ended with mild losses on September 27 as weakness in other Asian markets weighed on investor sentiment.
The 30-share Sensex closed the day with a loss of 167 points, or 0.43 percent, at 38,822.57, with 20 stocks in the red, while the Nifty50 finished 59 points, or 0.51 percent, lower at 11,512.40. Among the 50 stocks in the index, 39 suffered losses.
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.
"Mixed global cues in the wake of rising political uncertainty in the US and lingering uncertainty surrounding the US-China trade war hurt sentiments," said global financial firm Standard Chartered in a note.
Experts are of the view that the market may see some consolidation due to sharp gains during the previous week.
"Given the gigantic rally, the market is expected to cool down till the beginning of the result season," said Jimeet Modi, Founder & CEO of SAMCO Securities & StockNote.
"The Government has started hustling after taking a huge hit on its yearly revenue of Rs 1,45,000 lakh crore. The hunt for getting back the money from other sources has heightened and the divestment programs have been revived. This will bring vibrancy in capital markets and at the same time, suck away liquidity from the bourses which is a negative for the stock market," he added.
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.
"Short interests have reduced with the month-end expiry and therefore significant upside is not expected in the near-term. A 50 percent retracement is expected before any fresh upmove. Traders can go long around 11,000-11,100 levels," Modi of SAMCO Securities said.
On the global front, the risk of an escalation in US-China trade tensions has risen after media reports indicated that the US President Donald Trump’s administration is considering delisting Chinese companies from the US stock exchanges.
An escalation in the ongoing trade tussle between the two countries will have a negative effect on markets across the globe.
Big News: Major PSUs pledge Rs 50,000 crore of capex in Oct-Dec
Finance Minister Nirmala Sitharaman on September 28 met officials from 32 major public sector undertakings (PSUs) and the minister said that they have pegged their capital expenditure (capex) pipeline for Oct-Dec at Rs 50,000 crore.
Sitharaman also said that all the PSUs that attended the meeting said their capital expenditure targets for 2019-20 (Apr-Mar) would be met.
The FM also said that a portal will be set up by the government for suppliers and contractors to track their due payments.
Technical view:
Nifty managed to hold 11,500 level on September 27 and formed bearish candle on the daily charts, while it rallied 2.1 percent for the week, seeing the Spinning Top formation on the weekly scale.
A spinning top is often regarded as a neutral pattern that suggests indecisiveness in the market. It can be formed in an uptrend as well as in a downtrend.
Experts feel the pattern formation and the behaviour of the market during the last trading sessions, after the September 20-23 rally, indicates that the consolidation is likely in the coming days before a fresh breakout.
Three levels of Nifty:
Intraday low- 11,499.8 | Intraday high- 11,593.6 | 200-DMA- 11,247.
Max Call OI: 11,500, 11,200
Max Put OI: 11,000, 11,500
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 recommends:
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.
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