Our call of the day suggests Nifty’s upside is likely to be capped. The four-negative catalysts…

 

*Morning Action @ 7 AM – Friday, October 11th 2024*

# Gift Nifty is seen trading cautiously after Wall Street struggled in overnight trade with consensus amongst traders that a half-point rate cut is cut off the table for the time being.

# *The trading theme revolves around the US consumer inflation numbers which slowed less than expected in September, raising concerns that further hot inflation data could force the Federal Reserve to skip a rate cut in December or January.*

# Investors now gear up for the US PPI (wholesale inflation) on Friday, October 11th

*7:00 AM GLOBAL UPDATE:*
# GIFT Nifty 🇮🇳: (-21, 25090)
# Dow Futures: (+5, 42459)
# Nasdaq 100 Futures (+41, 20282)

# Nikkei (+243, 39622)
# Hang Seng (Closed, 21252)

# Dow Jones (-57, 42454)
# Nasdaq (-10, 18282)
# Bovespa (+391, 130353).

MARKET TRENDS:
# Global: Neutral
# FII: Negative (-4926.61 Cr)
# DII: Positive (+3878.33 Cr)
# Sentiment: Bullish
# Market Breadth: Positive
# Technicals: Oversold conditions
# F&O: 24000 – 26000 zone.

# INDIA VIX 13.49 (-4.46%)
# Nifty PCR (31st Oct) 1.01
# Bank Nifty PCR (30th Oct) 0.89

# Nifty Outlook: An up-and-down session on card.

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

Nifty Technically:
Nifty (CMP: 24998)
SUPPORT: 24694/24413
RESISTANCE: 25301/25701
RANGE: 24900-25150
BIAS: Positive
21 DMA: 25476
50 DMA: 25051
200 DMA: 23208

Bank Nifty Technically:
BANK NIFTY (CMP 51530):
SUPPORT: 50881/50194
RESISTANCE: 52319/52900
RANGE: 51100-52100
BIAS: Positive
21 DMA: 52489
50 DMA: 51536
200 DMA: 49212

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

# Wall Street ends Thursday’s session amidst hot inflation print as economic data continues to complicate expectations for Federal Reserve rate cuts.

# The annual CPI inflation rate in the US slowed to 2.4% but traders were expecting a smaller 2.3% rate.

That exceeded economists’ forecast for a 2.3% rise in inflation. More importantly, core CPI, which excludes volatile food and energy costs and is considered to be a better indicator of future prices, rose 0.3%. That topped expectations for a 0.2% increase.

# At the closing bell, the blue-chip Dow Jones was off 0.1% at 42,454, while the broader S&P 500 fell 0.2% to 5,780. The tech-heavy Nasdaq Composite slipped 0.5% to 18,282.

# COMEX Gold bounce towards $2635 per ounce.

# WTI OIL prices inches up towards $75.53 a barrel.

 

NEED TO KNOW:

# In yesterday’s trade, Nifty after a higher open turned cautious as bulls refrain from placing any fresh aggressive bullish bets.

# Meanwhile, TCS Q2 missed street’s expectation after posting a 1.1% quarter-on-quarter (QoQ) fall in net profit to Rs 11,909 crore. India’s largest IT service firm’s Q2 FY24 revenue from operations rose to Rs 64,259 crore. Overall order book for TCS stood at $8.6 billion, a 23.2% decline YoY.

# Our call of the day suggests Nifty’s upside is likely to be capped. The four-negative catalysts:

1) In yesterday’s trade, FIIs turned out to be net sellers to the tune of Rs 4927 crores. This October month, FIIs have pulled out over Rs 54,200 crore from Indian equities.

2) Oil prices spike towards $76 a barrel on worries over the potential for a more direct confrontation between Israel and Iran that could threaten Middle East crude flows.

3) TCS Q2FY25 missed street’s expectation after net profit falls to Rs 11,909 crore.

4) The US CPI inflation came out higher than expected in September.

# On the international front, the focus will now be on:

The US PPI (wholesale inflation) on Friday, October 11th

# Nifty (CMP: 24998)
SUPPORT: 24694/24413
RESISTANCE: 25301
TRADING RANGE (24900-25150)

# Buzzing stocks:

1) Adani Enterprises is on spotlight on reports that the Adani Group is in advanced discussions with a Middle Eastern sovereign fund to raise up to $1 billion for its airports division.

These fundraising efforts coincide with Adani Enterprises’ launch of a qualified institutional placement (QIP) on Wednesday, aiming to secure up to Rs 4,200 crore ($500 million), which is lower than initially targeted due to global market fluctuations.

2) Defence-related stocks like Mazagon Dock Shipbuilder, Cochin Shipyard and HAL are in limelight after the government’s Cabinet Committee on Security cleared major deals for building two nuclear submarines indigenously, apart from buying 31 predator drones from the US.

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

Nifty (24998): Buy on dips between 24850-24900 zone. Stop at 24573. Zone. Targets 25151/25301. Aggressive targets at 25600-25750 zone.

Bank Nifty (51531): Buy between 51100-51300 zone. Stop at 49911. Targets 51500/51801. Aggressive targets at 52500-52900 zone.

# Our chart of the day is bullish on EXIDE and POLYCAB with an interweek perspective while stocks like DR REDDYS LAB, SAIL and TECH MAHINDRA.

# The 1 Stock to Sell Right Now:

Sell DR REDDYS LAB (CMP 6583): Sell at CMP. Stop at 6839. Targets at 6481/6301. Aggressive targets at 6188. (Interweek Strategy). Rationale: Weakening Momentum. Breaking down.

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