Benchmark indices decline, Bluestar’s Fundraising and BPCL’s Downgrade
Written by - Fisdom Research
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September 20, 2023
5 minutes
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Daily Snippets
Date: 20th September 2023
SENSEX 66,800 (-1.18%)▼
NIFTY 19,901 (-1.15%)▼
Technical Overview – Nifty 50
The Index witnessed a “Gap-Down” Opening & ended the session at its lows at 19910 down -1.11%. Going forward, the Index is expected to witness “Sell-on-Rise” outlook towards 20100 levels in next few sessions.
Trading below 20100 Nifty Spot the bias remains “Range to Down” with Potential immediate support zone of 19650-600
As per 21-Sep Derivative Option Chain study the Index immediate “Tug-Of-War” level will be at 19900 levels between “Bulls & Bears”
For the coming day the Index can be looked for Buy-On-Dip towards 19735 & Sell-On-Rise at around 20k levels with strict stops as per risk-appetite
Technical Overview – Bank Nifty
The Index witnessed a “Gap-Down” Opening & ended the session at 45440 after a minor recovery from it’s lows of 45276 down -1.17%. The Index has important “Silver-Line” at 45900 & 44400 levels with bias “Sell-On-Rise” & “Buy-On-Dip” with strict stops.
As per 21-Sep Option Chain Study the Index downside looks capped with silver-line crucial level of 45300 levels.
Overall, for the month Sep the bias remains Upside Capped sub 46k levels & Buy-on-Dip towards 44800-44500 zone with strict stops.
Indian markets:
Domestic equity markets experienced a second consecutive decline on Wednesday.
The Nifty 50 index retreated from its early high of 20,050.65 to hold the 19,900 level.
All sectoral indices on the NSE ended in negative territory, with metal, financial services, and bank stocks seeing significant declines.
The market downturn was fueled by substantial selling in major players like HDFC Bank and Reliance Industries.
Lackluster global cues were a contributing factor, especially with the upcoming FOMC meeting.
Other factors causing investor concerns included increasing US bond yields, rising crude oil prices, a weakening rupee, and foreign institutional investors selling.
Global Markets
Markets in Europe advanced on Wednesday, fueled by a decrease in UK inflation and anticipation for the US Federal Reserves monetary policy decision. UK consumer inflation rose 0.3% in August, but the year-on-year figure unexpectedly fell to 6.7% from 6.8% in July.
Asian stocks ended on a mixed note as China opted to keep its one-year and five-year loan prime rates unchanged at 3.45% and 4.2% respectively. Traders are awaiting the Bank of Japans monetary policy meeting, hoping for clarity on when the bank will shift its ultra-easy monetary policy. Additionally, the Peoples Bank of China is expected to announce its loan prime rate decisions on Friday.
US stocks closed lower on Tuesday ahead of the Federal Reserves decision. The Fed began its two-day policy meeting and will reveal its interest rate decision on Thursday. While it is widely anticipated that rates will remain steady, investors will closely analyze the summary of economic projections and Fed chair Jerome Powells press conference for insights into future developments.
Stocks in Spotlight
Bluestar’s stock surged by 13 percent following the company’s announcement of a qualified institutional placement (QIP) issue aimed at raising funds. The QIP’s floor price is established at Rs 784.55 per share, representing a 2 percent discount from Monday’s closing price of Rs 800.05. The company has the option to provide a discount of up to 5 percent on the floor price. The executive management committee of Bluestar is scheduled to convene on September 22 to deliberate on the final issue price.
Bharat Petroleum Corporation Limited (BPCL) witnessed a 2.07 percent decline in its shares, closing at Rs 352.9, following a downgrade to “underperform” by Jefferies on September 20. Jefferies has set a target price of Rs 310 per share and anticipates that BPCL may experience an Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) loss in the second half of FY24, primarily due to increased marketing losses in diesel. Consequently, the brokerage firm has reduced BPCL’s EBITDA margin by 22 percent for FY24.
Union Bank of India’s shares demonstrated resilience, surging nearly 3 percent during intraday trading on September 20, despite broader market declines and a dip in other PSU bank stocks. This positive momentum followed the government’s recent extension of Nitesh Ranjan’s term as executive director of the bank by an additional two years. His current term was originally set to conclude on March 9, 2024, as reported in a BSE filing on September 18. Motilal Oswal, a brokerage firm, has expressed bullish sentiment toward Union Bank of India, issuing a ‘buy’ rating on the stock and setting a target price of Rs 110 in its July 22 research report.
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