Nifty’s Strong Turnaround, Lupin’s FDA Win, IT Sector Challenges

Technical Overview – Nifty 50

Nifty50 witnessed a strong turnaround on the first day of an October series and reclaimed 19,700 levels. The Index on the weekly chart has formed a hammer candle stick pattern near the support levels.

Nifty futures rollover stood at 76.00%, which is marginally lower compared to last month’s expiry rollover of 77.97% and its three-month average of 79.54% Nifty has started the October series with an open interest of 1.04 crore shares compared to an OI of 1.06 crore shares at the beginning of the September series. 

Nifty saw marginally lower rollover with a higher cost of carry (+0.68%) and a fall in open interest, compared to its previous month, indicating profit booking of short positions during the first half of September Expiry before the fresh buildup of short positions towards the last week kept the Index under pressure.

The performance of the upcoming sessions is probably going to remain very stock-specific. It is advisable to have a cautiously optimistic stance for the upcoming week. The immediate support for the Index is placed at 19,500 levels and the upside is capped below 19,800 levels for the time being.

Technical Overview – Bank Nifty

A strong comeback from the Bank Nifty on the first day of the October series expiry and the index has reclaimed 44,500 levels. The Bank Nifty on the weekly chart has formed a Doji candle stick pattern and has taken support near the 21 EMA which is placed at 44,271 levels.

The Bank Nifty on the daily chart is trading in a rectangle pattern and prices have taken support near the lower band of the pattern. A bearish dead cross has been witnessed in the banking index where 9 EMA has crossed below 21 EMA indicating a bearish sign for the index. The momentum oscillator RSI (14) is hovering near 45 levels with a bearish crossover.

The view remains bearish to sideways and the immediate support for the index is placed at 44,100 – 44,000 levels. A close below the said levels will be a bearish breakdown in the banking index. And an immediate resistance is placed at 44,800 – 44,900 levels.

Indian markets:

• September rains brought relief after a severe deficit in August, the driest month since 1901.
• Calmed nerves of policymakers and farmers, mitigating immediate concerns.
• Doubts persist about the impact of rains on India’s inflation rate.
• El Nino uncertainties still loom, creating market apprehension.
• Supply worries about key commodities add to inflation concerns.
• Market attention shifts to the upcoming RBI meeting.
• Inflation remains above the central bank’s comfort band of 2-6 percent.
• Investors await policy decisions to gauge future market trends.

Global Markets

• The Dow Jones index futures were up 125 points, indicating a positive opening in the US stocks today.
• Markets in Europe and Asia advanced across on the board on Friday. Investors will be looking for euro zone inflation numbers on Friday, after preliminary German inflation figures showed inflation slowing more than expected on Thursday.
• The Chinese markets were closed for a holiday and are on a break next week.
• US stocks rallied on Thursday as investors monitored negotiations in Washington regarding a potential government shutdown. The US Bureau of Economic Analysis reported that the countrys GDP expanded at a 2.1% annual rate in Q2, with downward revisions to consumer spending offset by upward revisions to nonresidential fixed investment, exports, and inventory investment. Investors are now awaiting the US personal consumption expenditures price index for insights on inflation.

Stocks in Spotlight

• Lupin experienced a significant surge of 4 percent, reaching a 52-week high of Rs 1,184.70, following the issuance of an Establishment Inspection Report (EIR) for its Nagpur unit-I manufacturing facility by the US Food and Drugs Administration (FDA). The EIR, signifying the conclusion of an inspection, categorized Lupin’s Nagpur unit as Voluntary Action Indicated (VAI). This classification is made by the FDA when inspection reveals minor issues that are not severe enough to warrant official actions, reassuring investors and contributing to Lupin’s notable market performance.
• Ashok Leyland, the prominent commercial vehicle manufacturer in India under the Hinduja Group, revealed a significant achievement. The company disclosed via a BSE filing that it secured a substantial order for 1,282 fully built buses from GSRTC (Gujarat State Road Transport Corporation). This order stands out as one of the largest received by a State Transport Undertaking from a single Original Equipment Manufacturer (OEM). This accomplishment not only underscores Ashok Leyland’s prowess but also solidifies its leading position in the competitive Indian bus market.
• LTIMindtree faced significant losses on the Nifty as Accenture, headquartered in Dublin, provided a modest revenue growth outlook of 2-5 percent year-on-year in constant currency terms for fiscal year 2023-24. This cautious guidance, coupled with Accenture’s 3-percent decline in deal bookings in the August-ended quarter against earlier expectations of flat growth, had a negative ripple effect across the IT sector. Consequently, LTIMindtree closed 1.05 percent lower at Rs 5,209.85, reflecting the broader concerns within the industry sparked by Accenture’s performance and guidance.

News from the IPO world🌐

• Hyatt backed Juniper Hotels files papers for Rs. 1800 crore
• TATA gears up for India’s largest ever public offering with upcoming IPO
• Fincare Small Finance Bank IPO gets SEBI approval

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