Our call of the day suggests turbulence and a rocky environment quite likely as the bears are everywhere!

*Morning Action @ 7 AM – Wednesday, October 23rd 2024*

# In early action, Gift Nifty is seen struggling to keep its head above water.

# *The trading theme revolves around the thoughts that the Federal Reserve may not need to be as aggressive in its rate-cutting cycle. A mixed batch of Q2 corporate earnings reports also are keep bullish sentiments in check.

*7:00 AM GLOBAL UPDATE:*
# GIFT Nifty 🇮🇳: (+20, 24545)
# Dow Futures: (-121, 42805)
# Nasdaq 100 Futures (-37, 20347)

# Nikkei (-12, 38402)
# Hang Seng (+26, 20525)

# Dow Jones (-7, 42925)
# Nasdaq (+33, 18573)
# Bovespa (-410 129951).

MARKET TRENDS:
# Global: Negative
# FII: Negative (-3978.61 Cr)
# DII: Positive (+5869.06 Cr)
# Sentiment: Negative
# Market Breadth: Negative
# Technicals: Weakening momentum
# F&O: 24000 – 25500 zone.

# INDIA VIX 14.39 (+4.58%)
# Nifty PCR (31st Oct) 0.90
# Bank Nifty PCR (30th Oct) 0.76

# Nifty Outlook: Upside likely to be capped.

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

Nifty Technically:
Nifty (CMP: 24472)
SUPPORT: 24350/23428
RESISTANCE: 24882/25149
RANGE: 24350-24750
BIAS: Negative
21 DMA: 25282
50 DMA: 25120
200 DMA: 23339

Bank Nifty Technically:
BANK NIFTY (CMP 51257):
SUPPORT: 50750/50194
RESISTANCE: 51713/52835
RANGE: 50700-52700
BIAS: Negative
21 DMA: 52235
50 DMA: 51700
200 DMA: 49621

*WHAT EXACTLY HAPPENED AT WALL STREET IN OVERNIGHT TRADE:*

# Wall Street mostly wavers in Tuesday’s choppy session as pessimists continue to bet the Fed will not cut interest rates as fast as initially anticipated amid strong economic data and prospects of a Donald Trump presidential win.

# The US Treasury yields were higher again on Tuesday following Monday’s surge, with the 10-year topping 4.2% for the first time since July before stabilizing around that level.

# Wall Street investors were still cautiously navigating the earnings season and gearing up for the presidential election.

# COMEX Gold improves further near $2743 per ounce.

# WTI crude oil futures trading firm near $71.50 per barrel as traders monitor rising tensions between Israel and Iran. The street is anxiously watching for Israel’s response to a recent missile barrage from Iran and subsequent attacks by Tehran-backed proxies.

NEED TO KNOW:

# There is a bright chance that Nifty could wobble again in today’s trade and probably end the day with negative bias.

# We say so because yesterday’s drubbing after a positive open could result in further profit-taking and may have invited Nifty bears back to the spotlight.

# That is in line with our call of the day which suggests turbulence and rocky environment quite likely and most importantly, we suspect, the bears are likely to be total control and aim to lay Dalal Street under siege.

# The key negative catalysts:

1) The pessimists continue to bet the Fed will not cut interest rates as fast as initially anticipated amid strong economic data and prospects of a Donald Trump presidential win.

2) US bond yields jump with the benchmark 10-year US Treasury note hitting 4.2% for the first time since late July.

3) Corporate India’s Q2 earnings disappointment.

4) Intense FIIs selling (This October month, FIIs have pulled out over Rs 86,458 crore from Indian equities).

5) WTI crude oil futures trading firm near $71 per barrel as traders monitor rising tensions between Israel and Iran. The street is anxiously watching for Israel’s response to a recent missile barrage from Iran and subsequent attacks by Tehran-backed proxies.

# Long story short: Caution should continue to be the buzzword.

# Buzzing stocks:

1) Shipbuilding shares sink: Mazagon Dock (-10%), GRSE (-12%), Cochin Ship locked at the 5% lower circuit at Rs 1,453.80.

2) Supreme Industries shares tanked up to 10% after the company delivered muted quarterly earnings for the second quarter of the financial year 2024-25 (Q2FY25). In Q2FY25, the company reported a revenue de-growth of 1.55% year-on-year, reaching Rs 2,272 crore, down from Rs 2,308 crore in Q2FY24. Sequentially, the revenue dropped 13.4%.

3) Shares of Cyient DLM slipped 4.6% despite a decent showing in quarterly earnings for the second quarter of the financial year 2024-25 (Q2FY25).

# Q2 earnings reports to trickle in today: Wednesday, October 23rd: ASIAN PAINT, ZOMATO, AU BANK, BAJAJ FINSERV, BSOFT, FINO PAYMENT BANK, GODREJ PROPERTY, HUL, IIFL, LAL PATH LABS, NAVIN FLUORO, PEL, PIDILITED, SYNGENE, THYROCARE, TVS MOTORS, UNITD SPIRIT.

# Now, here is our preferred trade on Nifty and Bank Nifty:

Nifty (24791): Sell between 24850-24900 zone. Stop at 25353. Targets 25567/24350. Aggressive targets at 22900-24100 zone.

Bank Nifty (51257): Sell between 51500-51700 zone. Stop at 52651. Targets 51000/50500. Aggressive targets at 50000-50100 zone.

 

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Our clients may have positions in the stocks mentioned in this note. Kindly note that our clients may receive additional information in real time not available to the viewers of this note.

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