Dear Trader…
Markets made a tepid start and settled with a cut of over half a precent, tracking weak domestic cues. Mixed earnings and not so encouraging macroeconomic data dented sentiment and pushed the Nifty lower in the first half. Though it tried to recoup losses in the middle, selling pressure in the final hour capped the recovery.
Markets are somehow managing to hold the recent low amid excessive volatility but it could be a pause before a further slide. We feel the performance of the banking and financials would dictate the trend in the near future while others are showing a mixed trend.
Nifty futures opened at 17085.25 points against the previous close of 17114.80 and opened at a low of 16927.00 points. Nifty Future closed with an average movement of 159.80 points and a decline of around 106.80 points and 17008.00 points...!!
On the NSE, the midcap 100 index will decline 0.69% and smallcap 100 index is closing decline 0.50%. Speaking of various sectoral indices, the NSE saw gains in only Media, Pharma, Healthcare and Metal stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, October gold opened at Rs.50891, fell from a high of Rs.51160 points to a low of Rs.50400 with a decline of 380 points, a trend of around Rs.50525 and December Silver opened at Rs.57374, fell from a high of Rs.57977 points to a low of Rs.56194, with a decline of 675 points, a trend of around Rs.56650.
Meanwhile, rating agency Crisil's research wing in its latest report has said that India Inc is likely to report a three per cent year-on-year fall in profits for the July-September period (Q2FY23). This fall in profitability will be the fourth straight quarter of the decline in profits for the listed companies. Profitability is seen declining 300 basis points (bps) due to elevated commodity prices.
The report, based on research of 300 companies from 47 sectors, said that rising revenue momentum is not translating into profit margin proportionately. The revenues are expected to rise by 15 per cent during the quarter when compared to the year-ago period, attributing it to moderate price hikes and steadily rising volumes. It can be noted that starting earlier this week, major companies have been reporting their earnings for the July-September period. On a sequential basis, that is when compared with the performance in Q1, the corporate revenue has declined by 3 per cent.
The report said nearly half of the 47 sectors have outpaced overall revenue growth during the quarter, with key sectors within consumer discretionary services logging maximum year-on-year growth. The underperforming sectors include construction-linked, consumer staples and industrial commodities verticals. Consumer discretionary services, which accounted for 8 per cent of overall revenue, are estimated to have grown 35 per cent year-on-year, largely due to revenue more than doubling in sectors, such as airline services on account of a rise in passenger traffic and high fares and hotels due to the increase in occupancy and room tariff.
Technically, the important key resistances are placed in Nifty future are at 17107 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 17170 – 17202 levels. Immediate support is placed at 16960 – 16909 levels.
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