WEEKLY TRENDSETTER (Sept 30th,2022)
| 2022 | Sep 16 | Sep 23 | Ch % |
| NIFTY | 17531 | 17327 | -1.16 |
| BANK NIFTY | 40776 | 39546 | -3.02 |
| USD/INR | 79.74 | 81.05 | 1.64 |
MARKET REVIEW–The intra week recovery during the week was short lived as rate hike fears, weak global markets and FII selling dampened sentiments and the Nifty slipped below 17500.
INTERESTING CUES
1.Germany takes over Russian subsidiary without compensation
This comes on the heels of the decision to nationalize Uniper,the country’s largest natural gas importer as a part of efforts to keep it afloat amidst the energy crunch that Germany faces after Russia took a drastic step to cut off gas supplies to Europe which could cripple the continent with winter approaching.Geopolitical tension has escalated last week with Putin announcing partial mobilization of citizens to support his military expansion.While borders are still open,it is widely expected that sooner than later they could be sealed which would prevent locals from fleeing.
2.IT underperformance could add pressure on rupee
In the last 2 decades whenever the rupee has weakened,domestic markets invariably took refuge into IT and pharma shares which are the immediate beneficiaries of this.However,in the last 3 months despite the indices rising 20% ,IT shares notably have been laggards even as the rupee weakened by nearly 4% during the period.The IT services have significantly contributed to the forex basket and have a 43% share of forex revenues of listed companies,up from 22% a decade ago.
The Sept quarter results will be keenly awaited particularly for the IT pack where mixed newsflow has affected sentiments.Meanwhile Accenture which follows Sept-Aug fiscal posted 15% growth in revenue for the qtr.The growth guidance was at 8-11% constant currency for FY22-23 when compared to 26% in FY21-22 which indicates moderation of IT services albeit still above 5-8% for financial years 2017-20.Thus,while there appears to be a slowdown,the steep valuation of IT companies have undergone a good correction and the quarterly results will set the tone for a fresh review for the future.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-There was a forewarning before last week when the 17500-strike got broken making the put writers run for cover.Last week there was a recovery to levels of 17900 before a sharp sell-off took the index down to 17300.For the coming week levels of 17100 will be critical as a cluster of supports exist. On the upside 17400 and above should witness selling pressure.
BANK NIFTY-The index breached 40500 and following this the selling was intense and towards close of week closed just above 39500.The index still looks overbought and any attempt to go past 40200 could witness selling pressure.On the downside levels of 38500 could be seen.
SCRIPS TO WATCH OUT
Biocon (283)- The stock has seen persistent selling pressure in the past few weeks and has now breached the 300 mark on the downside which could act as a resistance in the coming days.Any rise to levels of around 290 could be sold into for a possible target of 270 in the coming days.
L&T FH (76)-The scrip saw some heavy selling pressure which broke critical short term support levels.Selling around 78-80 could be considered for a possible target of 70 in the coming weeks.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam