Stock Market Highlights 5 Sept 2022: Bulls stage comeback! Nifty ends above 17,650, Sensex adds over 400 points
Stock Market Highlights 5 September 2022: The bulls took control of the Indian market after two consecutive weak sessions amid muted global cues on Monday.
The bulls took control of the Indian market after two consecutive weak sessions amid muted global cues on Monday. Benchmark indices traded firm throughout the session as Nifty ended above 17,650 and the Sensex added more than 400 points. The two indices ended at 17,665.80 and 59,245.98 respectively. The benchmarks were supported by broader market and sectoral indices too.
"Concerns about the global economy, which is struggling with high inflation and recession, were stoked by mixed job data from the US and a worsening energy situation in Europe. Strong employment in the US will give Fed the confidence to raise interest rates by another 50–75 bps in the forthcoming policy meetings," said Vinod Nair, Head of Research at Geojit Financial Services.
In anticipation of decrease in output, oil prices increased prior to the OPEC+ summit, he said. Meanwhile, none of these has impacted the domestic market, which continues to hold an upbeat outlook, bolstered by strengthening local economic statistics and rising corporate demand, the expert observed.
In the broader market, Nifty Midcap gained around 0.3%, while the small cap index outperformed the market, gaining over one per cent on Monday.
Besides, sectoral indices too aided the recovery on the Dalal Street with Nifty Metal gaining more than one and half per cent. All sectoral indices closed on strong note except Nifty Oil & Gas, which ended flat on Monday.
Speaking on Nifty closing on September 5, Rupak De, Senior Technical Analyst at LKP Securities said the 50-stock index remained in the green during the day, however, it stayed from challenging the 17700 mark which remained a crucial resistance. "The market may remain buy on dips as long as it sustains above 17400. On the higher end, a decisive move above 17700 may induce a rally in the market," he added.
Among Stocks, Hindalco, JSW Steel, NTPC led the Nifty50 pack, while the Sensex saw Sun Pharma and ITC leading from the front.
Nestle India, Bajaj Auto, Wipro and Ultratech Cements were among top losers in an otherwise steady market
Earlier, the US market extended weakness for the sixth day despite robust employment data as Wall Street indices declined on Friday.
"US jobs generation figures and employment data released last Friday are favorable from the equity market perspective. Jobs generation (315000 in August) continues to be strong indicating a robust economy. This would have called for a hawkish Fed action on 21st September, but unemployment rising from 3.5% to 3.7% and declining wage growth reflect a slowing economy and proof that rate hikes are working," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The Fed may again hike the rate by 75 bp this month; it is also possible that the hike may be 50bp, he said.
"Either way, the market is unlikely to be surprised. India is presently the best performing market globally. FIIs turning buyers has imparted strength to the market. Derivatives data indicates high volatility ahead," he added.
The initial public offerings (IPO) of Tamilnad Mercantile Bank will open for subscription on Monday. The three-day IPO will conclude on September 7. Ahead of the opening of the issue, the private sector lender on Friday raised a little over Rs 363 crore from anchor investors days before its Initial Public Offering (IPO). Societe Generale, Nomura Singapore, Bajaj Allianz Life Insurance Company, Max Life Insurance Company, Kotak Mahindra Life Insurance Company and Moneyewise Financial Services are among the anchor investors.
Latest Updates
Nifty witnessing short term consolidation
The Nifty is witnessing a short term consolidation for the last few sessions. On September 05, the index attempted to move higher; however the upside was restricted by the near term resistance zone of 17700-17780. This zone is likely to attract a fresh round of selling. Structurally, the index is preparing for a downward move within the overall short term consolidation. On the downside, 17540-17500 is an immediate support zone below which the index will be set to test 17200. The hourly & the daily Bollinger Bands are in contraction mode, thus suggesting that the range bound action can continue in the short term where the range would be 17200-18000. -
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
Bank Nifty closes near its immediate hurdle
"The Bank Nifty bulls continued their upper hand and closed near the immediate hurdle of 39,800. The index is trading in a strong uptrend with higher top and had higher bottom formations intact on all the time frames. The index once surpasses the mentioned hurdle will see a strong move on the upside toward the 41,000-41,500 zone. The lower-end support stands at the 38,800-38,500 zone where fresh put writing has been observed," Kunal Shah, Senior Technical Analyst at LKP Securities.
Rupee expected to remain weak
USDINR (CMP Rs 79.8425 spot):
Indian rupee appreciated slightly by 0.05% today amid positive domestic equities. Upbeat macroeconomic data from India also supported Rupee. India’s composite PMI and services PMI rose to 58.2 and 57.3 in August from 56.6 and 55.5 in July respectively. However, surge in crude oil prices and higher US Dollar capped sharp gains. Dollar rose to a fresh 20 year high today and briefly breached the 110 mark. We expect Rupee to remain weak on surge in US Dollar on concerns over global economic slowdown. Surge in crude oil prices may also weigh on Yen. However, positive tone in domestic equities may support Rupee at lower levels. US markets will remain closed today on Labor Day holiday. USDINR spot price is expected to trade in a range of Rs 79 to Rs 80.50 in next couple of sessions.
Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas
Gold (CMP $1712 spot): Short-term clues for yellow metal remain mixed
Although the US Dollar Index has risen to fresh record high, gold is getting some support from outside markets as crude oil is up nearly 3% on the possibility of OPEC+ cutting its production target in a decision to be taken today. Elsewhere, China has shown strong reaction to the US approving arms deal worth $1.10 billion to Taiwan. The US and Canada markets are closed today as these countries observe Labor Day holiday.
Short-term clues for gold remain mixed. It is possible that the metal may consolidate for a while and may test resistance around $1730 in the wake of higher crude oil prices and risk-on sentiments. Support is around $1695. Overall, the yellow metal remains bearish, though occasional rallies aren’t ruled out.
Praveen Singh – AVP, Fundamental currencies and Commodities analyst at Sharekhan by BNP Paribas
Crude oil price trading strategy: $85 holds is strong support base
WTI Crude oil (October) CMP $89.15
Crude oil prices rebound to trade around $89/b, ahead of crucial OPEC+ monthly meetup, where they are expected to provide path of future oil production decisions for the group countries. OPEC+ may cut the output up to 100KBPD, to balance the market in case of additional supplies flows through Iran once they seal the nuclear deal with west. Last week WTI crude oil fell 6.7% amid economic slowdown in China and Eurozone hurting the demand outlook. The Eurozone recorded 37.9% reading of factory gate inflation in July, due to 97% jump in energy prices. US economy continued to give firm hope to lead the world economy ahead with Labour market hiring @315K beats the street consensus of 300K for August. Dollar index opened stronger today to hit fresh highs of 110.25 in Asian trading hours today. Oil prices have fallen over 25% in last three months giving up all the Ukraine-Russia war related gains. For the day we see wait and watch approach from the oil traders ahead of the OPEC+ decision, US market also remain close for trading on labour market holiday. Prices are likely to remain range bound to upwards bias with $92 remains the strong resistance for crude oil and $85 holds as the strong support base.
Mohammed Imran, Research Analyst at Sharekhan by BNP Paribas
TCS volume topper on BSE
TCS, HDFC Bank and PowerGrid were top three volume toppers on the BSE in afternoon trade on Monday. TCS total traded quantity stood at 2,16,801 shares worth Rs 68.03 crore. Similarly, as many as 4,00,155 HDFC Bank shares were traded to the tune of Rs 59.77 crore and 23,79,941 shares of PowerGrid exchanged hands at the exchange.
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Gold price outlook: Sideways trend in yellow metal may remain for sometime
Gold prices are trading in range bound zone on account of growth worries, geopolitical uncertainty, spiralling inflation, stronger dollar and bond yields. The sideways trend in gold may remain for sometime till any fresh trigger breaks the range. In the meantime, gold may remain under selling pressure this week.
Buy Zone Above - 50500 for the target of 50700
Sell Zone Below - 50200 for the target of 50000Dr. Ravi Singh-Vice President and Head of Research-
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Stock market opening 5 September, 2022
The Benchmarks opened flat with positive bias on Monday. In the broader market, Nifty Midcap and Small cap opened higher by 0.5% and 0.7% respectively. Sectorally, Auto, healthcare, FMCG and Pharma witnessed selling pressure in the morning session, while Metal gained the most supported by banking and Fianacial stocks.
Among stocks, Hindalco, JSW Steel, Tata Steel led the Nifty50 pack, while ICICI Bank, Tech Mahindra and Kotak Bank gained the most on the 30-share Sensex.
Apollo Hospitals, Nestle India and Dr Reddy’s were top laggards on the benchmarks in early trade.
Nifty outlook 5 Sepetember
The week opens with a modest downside objective of 17440-370, before allowing a chance for bulls to fight back. Inability to push beyond 17580, would however bring the 17000-16650 region again in play. - Anand James - Chief Market Strategist at Geojit Financial Services.
Pre-open Session
In the pre-opening, benchmark Sensex opened flat with marginal cuts, while the broader Nifty50 slipped below 17,500.
Asian trade mixed
A majority of the Asian markets were trading in the red in early trade on Monday. Japanese Nikkei 225 declined 0.3%, Hang Seng Index at the Hong Kong Exchange dropped 1.2%, while Chinese Shanghai Composite rose around 0.20% on Monday
SGX Nifty hints at negative start
The SGX Nifty, which indicates opening trend for the Indian market, fell around 40 points in early trade on the Singaporean exchange on Monday hinting at a weak opening today
US stock market holiday
The US market ended in the red on Friday despite robust employment data. Dow Jones declined 337 points, Nasdaq 154 points and S&P500 ended lower by 42 points ahead of holiday on Monday
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