A sea of red: Sensex crashes 1,000 pts at open, Nifty below 17,800; all sectors in the red
Mohit Nigam, Head – PMS, Hem Securities
The US markets ended sharply lower on Tuesday after the latest inflation data in the world’s largest economy showed a less-than-expected moderation in the price-rise index, that’s at a multi-decade high. Asian markets are trading in red on Wednesday as a white-hot US inflation report dashed hopes for a peak in inflation and fuelled interest rate hike bets.
On the technical front, the key resistance level for Nifty is 18,000 and on the downside 17,500 can act as strong support. Key resistance and support levels for Bank Nifty are 40,500 and 39,500 respectively.
Rupee Check | Rupee opens at 79.60/$ versus Tuesday’s close of 79.15/$
Morgan Stanley on SBI:
-Overweight call, Target at Rs 675 per share
-Loan growth momentum remains strong
-Asset quality remains benign
-Expect margin improvement to resume from Q2FY23
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services
The 4.32 percent and 5.12 percent cut in S&P 500 and Nasdaq on Tuesday reminds us that there is more uncertainty about inflation and growth and more volatility ahead for markets. The worse-than-expected CPI inflation data in the US, despite cooling gas prices, was a surprise. Now the market fears that inflation is getting entrenched and an ultra-hawkish Fed might trigger a hard landing for the US economy.
The ‘buy on dips’ strategy has been working very well in India for more than a month now. Investors should watch out whether this strategy continues to work. Aggressive buy on dips is better avoided.
Domestic-economy facing stocks like high quality financials, capital goods, autos, segments of FMCG and telecom are relatively safe now. Global economy-facing stocks like IT and metals are likely to be under pressure.
Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities
Local share indices are likely to see a negative opening on Wednesday on the back of a sea of red across the global equity markets, after US August inflation data came above estimates. With stronger inflation, the US Federal Reserve’s hawkish stance could continue in this month’s policy meeting, leading to worries of a growth slowdown in key economies. Besides, the US 2-year/10-year yield curve remained inverted at around 33 basis points, which is again a key recession warning.
Nomura on IT stocks:
-More evidence of revenue slowdown ahead
-Slowing revenue & high inflation to dampen IT tech budgets
-Cross-currency to limit currency-led margin gains in the near term
-Retain ‘cautious’ view on the sector
-Infosys and Tech Mahindra are preferred ‘Buys’ in large caps
-Reduce ideas: TCS in large cap and L&T Infotech in mid cap
Jefferies on Adani Ports:
-Buy rating, Target raised to Rs 1,100 from Rs 850 per share
-Company aims to leverage its strong balancesheet to benefit from gradual volume recovery
-Raise FY23-25 volume estimates by 3-7 percent and EPS by 5-11 percent
-Medium-term double-digit growth should continue
U.S. 2-year and 10-year Treasury yields shoot higher:
US Treasury rocketed higher after a hot inflation reading. The 2-year Treasury yield surged above 3.79 percent, highest since 2007. Yield on the benchmark 10-year Treasury note surged 6 basis points, trading at 3.42 percent.
Fund Flow on September 13
Foreign institutional investors (FIIs) net bought Indian equities worth Rs 1,956.98 crore, whereas domestic institutional investors (DIIs) net sold shares worth Rs 1,268.43 crore, as per data available on the NSE.
OPEC sees pre-pandemic oil demand in 2023
OPEC has stuck to its forecasts for robust global oil demand growth in 2022 and 2023. Demand growth seen at 3.1 mln bpd in 2022, 2.7 mln bpd in 2023, according to OPEC. Forecasts suggest demand will top pre-pandemic level in 2023.
Oil prices inch higher as OPEC sticks to demand forecast
Oil prices were slightly higher in early trade on Wednesday as OPEC stuck to forecasts for robust global fuel demand growth. Brent crude futures rose 3 cents to $93.20 a barrel by 0116 GMT, after settling 0.9 percent lower on Tuesday. U.S. West Texas Intermediate crude was at $87.41 a barrel, up 10 cents, or 0.1 percent.