Dear Trader…
Markets kept the participants on the edge on the monthly derivatives expiry day but finally ended flat. After the gap-up start, the Nifty gradually inched lower as the session progressed and finally settled around the day’s low to close at 16,818.10 levels. While most sectoral indices traded in sync with benchmark and ended flat to marginally lower, continuous buying in defensive viz. pharma and FMCG majors capped the damage.
Markets have been making attempts for a rebound however weak global cues combined with continuous selling from foreign investors are weighing on sentiment. We feel the overall tone would remain bearish until the Nifty reclaims 17,200. On the downside, a decisive break of 16,800 could further fuel the decline. Participants should align their positions accordingly and maintain positions on both sides.
Nifty futures opened at 16981.30 points against the previous close of 16858.70 and opened at a low of 16786.05 points. Nifty Future closed with an average movement of 256.09 points and a decline of around 41.30 points and 16817.40 points...!!
On the NSE, the midcap 100 index will decline 0.40% and smallcap 100 index is closing decline 0.63%. Speaking of various sectoral indices, the NSE saw gains in Bank, Auto, Fin Service, IT and PSU Bank stocks were seen selling on the NSE, while all other sectoral indices closed higher.
At the start of intra-day trading, October gold opened at Rs.49650, fell from a high of Rs.50068 points to a low of Rs.49650 with a rise of 100 points, a trend of around Rs.49850 and December Silver opened at Rs.56037, fell from a high of Rs.56423 points to a low of Rs.55890, with a decline of 514 points, a trend of around Rs.56014.
Meanwhile, credit rating agency CRISIL in its latest report has said that automobile dealers are set to clock their fastest revenue growth in three fiscals with sales accelerating 20-25% on-year on the back of 12-14% volume growth, riding on five cylinders that have been firing well - increasing preference for personal mobility, higher economic activity, easing supply-side constraints, shift in product mix towards higher priced vehicles, and price hikes of 5-7%. It said higher vehicle sales and greater contribution of the more-profitable ancillary revenue (service, spare parts and insurance) to 10-12% of total income in fiscal 2023 from 8-9% last fiscal will help stabilise operating margin1 at 3-5% (4% in fiscal 2022). This could lead to healthier credit risk profiles.
According to the report, retail auto registrations, which plunged in fiscal 2021 and revived partially in fiscal 2022, continued to recover in the first five months (April-August) of this fiscal with recovery in retail demand and easing of semi-conductor shortages. Recovery in revenue, however, will not be uniform across dealership segments. While passenger vehicle (PV) dealers will continue to show robust recovery, commercial vehicle (CV) and two-wheeler (2W) dealers will grow on a lower base due to subdued sales over the last 2-3 fiscals. PV dealers will see strong volume growth of 17-19% in the current fiscal in line with improved OEM growth outlook2, and increasing average realisation per vehicle due to higher proportion of higher priced utility vehicle sales, leading to overall revenue growth of 24-26%.
Technically, the important key resistances are placed in Nifty future are at 16909 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 16979 – 17007 levels. Immediate support is placed at 16737 – 16676 levels.
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