Chandan Taparia, Vice President, Equity Derivatives and Technical, Broking & Distribution, Motilal Oswal Financial Services:
Nifty opened with a gap up but failed to hold at higher levels and drifted lower. On daily scale it has broken its important support zone of 15735 and is witnessing aggressive selling pressure. India VIX is up near 22 zones which indicates volatility likely to continue and it needs to cool down for stability in the market. Now as long as it is below 15500 zone we can expect lower levels of 15350 and 15000 whereas resistance is faced near to 15735 and 15888 zones. Market breadth is negative which indicates that the bears are dominating and facing resistance at higher levels.
Bank Nifty opened with a gap up in line with Nifty but couldn’t sustain at higher levels and drifted lower. It has breached the low of last 3 trading sessions and forming a bearish engulfing candle on the daily scale indicating aggressive selling pressure. Now as long as it holds below 32750 zones we can expect a move towards 32000 zones whereas resistance are placed at 33000 and 33500 zones.
Today, we are witnessing long built up in stocks like Maruti, ICICI Bank, UBL, Crompton and Deepak Nitarte etc. while short build-up is visible in counters like Coalindia, Navin fluorine, AuBank, Polycab, Ramcocem etc.
Nifty is expected to trade with negative bias and can utilise any bounce as a selling opportunity till it holds below 15735 zone. At current juncture, we are advising to be with selective stocks and one can look for selling opportunity in UltraTech, Voltas, JSW Steel, Laurus Labs etc.
Confident of bringing down price of round the clock renewable power to Rs 6.5-7/kWh. Looking to increase penalties for missing renewable purchase obligations, says Power Minister @RajKSinghIndia at India Energy Transition Summit pic.twitter.com/2PyxxKl0iA
— CNBC-TV18 (@CNBCTV18Live) June 16, 2022
Market update at 2 PM: Sensex is down 753.96 points or 1.43% at 51787.43, and the Nifty fell 241.10 points or 1.54% at 15451.10.
BSE Auto index slipped 1 percent dragged by Cummins India, Tata Motors, Hero MotoCorp
Madhavi Arora, Lead Economist | Emkay Global Financial Services
While we believe the money market may have largely baked it in, as we previously argued, the pain would likely linger for equities and credit markets. Our study also shows that historical precedent depicts how equities and credit struggle well after rates market peak.
Thus investors may brace ahead at best for occasional bear market rallies in coming months. 2023 will possibly, ironically, probably deliver recession but broadly positive returns across multiple asset classes, because 2022 will have front-loaded so much stagflation into valuations.
Nifty Metal index shed 4 percent dragged by the Vedanta, Welspun Corp, Jindal Steel:
Mohit Ralhan, Managing Partner at TIW Capital Group on US FED Reserve
The central banks across the globe are playing catch up with inflation and making efforts to race ahead of the curve. The 75-basis point increase by the Fed and more importantly the upward revision of 1.5% in the expected year-end rate indicates that the inflation is winning the battle as of now.
Fed also significantly cut its outlook for 2022 economic growth to 1.7% down from 2.8% in March. The risk of a recession in the USA has increased and the next two quarters will be extremely crucial.
Although Fed expects the inflation to move lower in 2023, the effect of the Fed’s actions on the broader economy remains uncertain. The markets are expected to remain quite volatile as it tries to find the balance between economic growth and high inflation.
Nifty touched its fresh 52-week low it down 254.80 points or 1.62% at 15437.40.
Over 150 stocks touched their 52-week low on the BSE. These included Wipro, UCO Bank, Tata Steel, RBL Bank, NBCC, Just Dial. Click Here to get a complete list of stocks that touched their 52 week lows during the day
UPL arm acquires Kudos Chemie for Rs 40 crore
UPL through its subsidiary USCL has acquired Kudos Chemie for Rs 40 crore, and to invest Rs 237 crore in Kudos over a period of 2 years as per resolution plan approved by NCLT.
Kudos manufactures speciality chemicals used as beverage and pharmaceutical ingredients and has manufacturing facility near Chandigarh.
UPL was quoting at Rs 693.70, down Rs 17.95, or 2.52 percent.
Market at 1 PMBenchmark indices extended the losses and trading at day’s low level.The Sensex was down 499.15 points or 0.95% at 52042.24, and the Nifty was down 175.50 points or 1.12% at 15516.70. About 704 shares have advanced, 2360 shares declined, and 107 shares are unchanged.
Motilal Oswal View on ITC
While valuations of global Tobacco peers have been restored to their pre-pandemic levels (Jan’19), ITC still trades at a 27% discount to its Jan’19 valuations of 25.4x one-year forward EPS.
We value ITC at 21x FY24E EPS, representing a 65% premium to its global peer average.
We believe the premium multiples are justified, given its strong visibility over the medium-term and the defensive nature of its business, especially in a volatile macro environment.
We value the stock at 21x FY24E EPS. We arrive at a target price of Rs 335 per share and upgrade our rating to Buy.
