Taking Stock | Market ends flat amid high volatility; all eyes on inflation data
Hindalco Industries, Sun Pharma, BPCL, UltraTech Cement and HDFC Bank gained the most on the Nifty, while losers included Bharti Airtel, Cipla, Divis Labs, Apollo Hospitals and HUL… Read More
Ajit Mishra, VP – Technical Research, Religare Broking
Markets traded volatile in a narrow range and ended almost unchanged, taking a breather after Tuesday’s decline. After the initial downtick, the Nifty oscillated in a range till the end and settled at 17895.70 levels. Meanwhile, most sectoral indices traded in line with the benchmark and closed marginally lower however rebound in banking and metal majors capped the damage.
Participants are having a tough time dealing with prevailing volatility amid the corrective phase and we do not expect any relief soon, citing the upcoming events & ongoing earnings season.
We thus reiterate our view to limit positions and prefer hedged trades. Investors, on the other hand, should see this decline as a buying opportunity and gradually accumulate quality stocks on dips.
Rohan Patil, Technical Analyst, SAMCO Securities:
Benchmark Index on 11th January, opened near its previous day close and traded with a super volatility through the day within the narrow range. If we consider last four trading sessions’ trading set up, we observe a bullish harmonic pattern near 17,800 levels and prices have respected the low of the pattern as for now.
On the 2 -hour chart, the triangle pattern is visible in the range of 18,150 – 17,750. We can expect a high level of volatility within this range as India VIX is also reading above 15 levels. Prices are expected to swing both ways until and unless they witness a break on either side of the triangle pattern.
Currently traders would be advised to wait patiently for the prices to break above 18,150 or below 17,800 levels to initiate next actionable move because presently market is in no trading zone.
Kunal Shah, Senior Technical Analyst at LKP Securities
The Bank Nifty index witnessed a volatile trading session but managed to hold the immediate support level of 42,000.
The index is likely to remain volatile in the coming session, and a break below 41,700 will accelerate the move on the downside.
The upper end of the intermediate resistance zone is seen at 42,350-42,400, and the short covering is expected towards the 42,700 level.
Vinod Nair, Head of Research at Geojit Financial Services
After a volatile session, the domestic market anchored near the flat line as investors remained cautious ahead of the release of inflation data, though positive sentiments from global counterparts attempted multiple recoveries in between. India’s CPI for December is projected to remain unchanged, while the US CPI is estimated to further cool down from November’s level of 7.1%. The relentless selling by FIIs as a result of the premium valuation of the domestic market is weighing on the domestic market.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty has been witnessing sharp swings in both the directions, which is a part of the short term consolidation process. In terms of the price patterns, the oscillations in the last few sessions have resulted in a triangular pattern formation.
The Nifty received support on the downside as it approached the lower end of the pattern. 17,800 is a key support on the downside. Unless that breaks on a closing basis, the index is expected to witness recovery once again.
On the higher side, immediate hurdle is at 18,000 beyond which it can test 18,100-18,150 in the short term.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
While the markets moved in a narrow range, select bouts of intra-day volatility continued to keep investors at bay. The latest US Federal Reserve chairman’s speech too didn’t signal any moderation in their rate hike approach going ahead, which has been hurting investors’ sentiment.
Currently the market is witnessing non directional activity and, perhaps, traders are waiting for the either side breakout.
For bulls 18,000 would be the important breakout level to watch out for and above the same, we can expect a quick uptrend rally towards 18,100-18,150 levels. On the flip side, trading below 17,800 may trigger further weakness up to 17,700-17,675.
Indian rupee closed 21 paise higher at 81.57 per dollar against previous close of 81.78.
Market Close: Benchmark indices ended flat in the highly volatile session on January 11.
At Close, the Sensex was down 9.98 points or 0.02% at 60,105.50, and the Nifty was down 18.50 points or 0.10% at 17,895.70. About 1830 shares have advanced, 1566 shares declined, and 142 shares are unchanged.
Hindalco Industries, Sun Pharma, BPCL, UltraTech Cement and HDFC Bank were among the top gainers on the Nifty, while losers included Bharti Airtel, Cipla, Divis Labs, Apollo Hospitals and HUL.
On the sectoral front, selling was seen in the FMCG, auto, pharma, power and oil & gas, while buying was seen in the bank, metal and information technology names.
The BSE midcap and smallcap indices ended on flat note.
Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas
Indian Rupee appreciated by 0.23% on Wednesday extending gains of the previous day on foreign inflows from bonds selling and positive domestic equities and overall weakness in crude oil prices. However, FII outflows and recovery in US Dollar capped sharp gains.
Dollar gained as traders are adjusting their positions ahead of US CPI inflation data due to be released tomorrow. Dollar also gained on safe haven appeal as World Bank trimmed 2023 global GDP forecast to 1.7% citing Russia-Ukraine conflict, inflation and higher interest rates as the main reasons.
We expect Rupee to trade with a positive bias amid risk-on sentiments weak crude oil prices. However, sustained outflows by foreign investors may cap sharp gains. Investors may remain cautious ahead of inflation data from US and India tomorrow. USDINR spot price is expected to trade in a range of Rs 81 to Rs 82.
Morgan Stanley View on Autos
-China reopening could be a positive for JLR/Tata Motors and Samvardhana Motherson International (SAMIL)
-But, do not see earnings upside for the sector now
-Keeps overweight rating on Tata Motors, target at Rs 502 per share
-Keeps Underweight rating on Samvardhana Motherson; target at Rs 70.67 per share
-High interest rate environment is a risk to global PV demand & SAMIL
Morgan Stanley keeps ‘Underweight’ rating on Cyient
-Underweight rating, target at Rs 730 per share
-Continue to see a potential partial divestment of the DLM biz as positive for Cyient
-It would provide greater flexibility to scale up the business
-May unlock shareholder value
-Some of this optimism may already be baked into stock price
Cyient was quoting at Rs 847.80, up Rs 7.55, or 0.90 percent on the BSE.