Earning Update: Tech Mahindra, Axis Bank

Technical Overview – Nifty 50

Amidst the volatility, Nifty received fresh drubbing and most importantly, ended on an ugly note. The index opened with a marginal gap up opening and registered a day-high at 19,347 levels and post that sellers from the higher levels were fully involved with high convection selling.

The Nifty50 on the daily chart has witnessed a breakdown of a broadening triangle pattern and the index closed below the same confirming the validity of the pattern. The index has also closed below its 100 EMA on the daily chart, earlier the prices closed below its 100 DMA in the 1st week of April 2023.

Presently the Benchmark index is trading below its 9, 21, 50 & 100 DMA and this is considered as a strong bearish signal for the index. The momentum oscillator RSI (14) has drifted below 40 levels after forming a smaller degree rounding top formation near 55 levels.

The cynic FIIs at the moment are obsessed with the negativity surrounding Dalal Street on the backdrop of inflation and recession concerns. The confirmation of strength is only above Nifty’s biggest hurdles at the 19,350 mark. Nifty’s biggest support is placed at the 19,000 mark.

Technical Overview – Bank Nifty

The Bank Nifty on the 23rd Oct, witnessed a rectangle pattern breakdown, and the banking index carried its bearish momentum ahead and the prices again drifted more than 300 points and closed 42,900 levels.

The Banking index witnessed a gap-up opening but could not sustain above 43,000 levels and witnessed intense selling pressure below its 9 EMA. Presently the Bank Nifty is trading below its 9, 21, 50 & 100 DMA and this is considered as a strong bearish signal for the index. The momentum oscillator RSI (14) has drifted below 40 levels after forming a smaller degree rounding top formation near 50 levels.

A long bear candle was formed on the daily charts which could prove to be a resistance in the next move. Risk-off sentiments seem to be prevalent based on the adverse advance-decline ratio. The confirmation of strength is only above Bank Nifty’s biggest hurdles at the 43,500 mark. Bank Nifty’s biggest support is placed at the 42,500 mark.

Indian markets:

• Domestic benchmark indices logged the fifth straight losing session on October 25 amid worry of escalating tensions in the Middle East and rising US bond yield that may result in more fund outflows from India.
• Key equity indices Nifty 50 and the Sensex closed in the negative territory for the fifth consecutive session on Wednesday, October 25, amid mixed global cues as concerns over the ongoing Israel-Hamas war keep investors nervous about riskier equities while unimpressive Q2 earnings and gains in US Treasury yields also weighed on sentiment.
• Mid and smallcaps also suffered significant losses today. The BSE Midcap and Smallcap indices fell 0.52 per cent and 0.77 per cent, respectively.
• The Indian rupee ended little changed against the US dollar on Wednesday amid selloff in domestic equity markets and a stronger American currency overseas.

Global Markets

• Nasdaq and S&P 500 futures fell on Wednesday as investors gave a mixed welcome to earnings reports from Microsoft and Alphabet, with more quarterly results set to flow in.
• Futures on the tech-heavy Nasdaq 100 were 0.56% lower, while those on the S&P 500 dropped 0.33%. But Dow Jones Industrial Average futures were up 0.13%.
• European markets were trading in the negative territory. The US markets ended in the green on Tuesday. “Investor sentiment is on edge as tensions in West Asia continue to drag the market. Despite a drop in oil prices and an optimistic view of the progressing Q2 results season, investors took a cautious approach due to the expectation that a higher interest rate scenario would continue slowing future growth.

Stocks in Spotlight

• IT services major Tech Mahindra reported a 61.6% fall in net profit to Rs 494 crore year-on-year for the quarter ended September 30, signalling a washout second quarter driven by slowing demand in telecom and communications segment and delays in deal cycles. Communications, media and entertainment (CME) currently account for nearly 40% of the company’s revenue.
• Private sector lender Axis Bank on October 25 reported a net profit of Rs 5,864 crore for the July-September FY24 quarter, which marks a 10% jump from Rs 5,330 crore clocked a year ago. The company’s net profit at Rs 5864 crore is beating the market estimates of Rs 5,698 crore. The net interest income (NII), at Rs 12,315 crore, is higher as against the market estimates of Rs 11,908 crore and grew 19% YOY.  Net interest margin (NIM) for Q2FY24 stood at 4.11% up 15 bps YOY.
• Shares of pharmaceutical major Torrent Pharma rose 2.21% after the company posted a robust performance for the July-September quarter which prompted strong growth expectations from a slew of brokerages.

News from the IPO world🌐

• Blue Jet Healthcare IPO subscribed 69% on first day of bidding process
• Mamaearth parent plans Rs. 1700 crore     IPO on Oct 31st
• Cello World sets Rs 617-648 price band for its Rs 1,900 crore-IPO

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