Markets succumbed to selling pressure on Monday after key indices opened with a gap below 50 DMA with the Nifty ending with losses of 2% while metals and financials suffered maximum because of the surge in USDINR beyond 81.5. The current corrective setup of BSE Sensex is similar in nature compared to the setup during 2018 and hence likely to be followed with quick recovery in the coming days.
During May-June 2018, the corrective took the formation of ‘Running Flat’ while this time around with BSE Sensex breaching lows of 26th Aug has led to ‘Expanded Flat’. Adding to it, the spread of India’s 10-yr-yield and US 10-yr yield has moved to lifetime lows of 375 bps breaching 2016 low and this would mean Indian Bonds have remained resilient in such volatile times.
For Sensex, assuming its corrective decline, we expect major reversal confirmation above 57,634 for regaining positive momentum and allowing indices to head to lifetime highs.
Sensex Chart
Stocks to watch
Positive Read through
- Vodafone Idea, EESL to install 50 lakh IoT-based smart meters in UP, Haryana.
- Reliance Jio to launch under Rs 12000 5G phone once 5G coverage expands.
- Axis Bank to tap into rural, semi-urban markets to expand credit card business.
- Zee Media case- Sebi levies Rs 4 lakh fine on 25FPS Media for disclosure lapses.
- Jindal Poly unit to consider minority investors’ demands.
- SBI Cards- Aug performance better than industry, gains market share.
- Hero Moto lines up new launches, easy financing in big festival push.
- Lupin launches generic Suprep Bowel Prep Kit in the United States.
- Exide’s Li-ion cell unit is likely to be ready in 2.5 yrs.
- HCL Tech- transformation partner of New York Giants, New York Jets, and MetLife Stadium.
- Amara Raja Batteries- Mangal Ind merger approved 65 shares of Co for 74 shares on Mangal Inds.
- HCC- completes debt resolution plan, debt will reduce to Rs 3575 cr.
- Power Grid- Govt rejects proposal to buy REC according to reports.
Negative Read through
- PFC- REC will continue to remain a PFC company.
- Embassy REIT – reports say Blackstone to sell 7.7 cr shares at Rs 345 a share.
- Nazara Tech- Tamil Nadu Cabinet approves ordinance to ban online gaming.
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