Sensex skids 305 points to end at 38,031

During the early trade, IT index was the only one trading in the red. File Photo   -  BusinessLine

Nifty sheds 82 points to close at 11,337

 

3:40 pm

Closing bell

The benchmark indices, the BSE Sensex and the NSE Nifty, ended Monday's session on a weak note.

The Sensex closed 305 points or 0.80 per cent lower at 38,031, while the Nifty finished at 11,337, down 82 points or 0.72 per cent weaker.

The top gainers on the Sensex were YES Bank, Vedanta, Maruti, Asian Paints and Reliance, while the laggards were HDFC, Kotak Bank, HDFC Bank, Hindustan Unilever and Bajaj Finance.

Shares of the energy, metals, oil and gas, and telecom sectors propped up the BSE index, while finance, realty, banking, FMCG and consumer durables dragged it lower.

3:25 pm

European stocks gain as oil jumps on West Asia tensions

European stocks struggled higher on Monday, shrugging off dialled-down expectations for a big US rate cut this month, while escalating tensions in West Asia boosted safe-haven assets and oil prices.

MSCI's broad index of world stocks slipped 0.2 per cent, pulling further away from the near-year-and-a-half high reached earlier in June after falls in much of Asia.

Europe's regional STOXX 600 index gained 0.1 per cent, Germany's DAX and France's CAC rose 0.3 per cent and Britain's FTSE jumped 0.5 per cent. Click here to read in full the European markets report.

3:15 pm

Euro weakens to $1.12 as dollar gains on safe-haven demand

 

Foreign-exchange markets started the week waiting to see how much and how fast policy-makers might ease policy, beginning with the European Central Bank on Thursday.

The euro weakened to $1.12 in Asian trading as the dollar gained on safe-haven demand amid rising tensions in West Asia.

Positioning data published last week showed that investors remain net long of dollars, unchanged from the previous week. Click here for forex markets update.

2:55 pm

Oil rises more than 2% after Iran seizes British tanker

 

Oil prices rose more than 2 per cent on Monday on concerns that Iran's seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf.

Brent crude futures climbed $1.41, or 2.26 per cent, to $63.88 a barrel by 0840 GMT. West Texas Intermediate (WTI) crude futures were up $1.13, or 2.03 per cent, at $56.76 a barrel. Last week, WTI fell over 7 per cent and Brent lost more than 6 per cent.

Tensions surrounding Iran “have likely added to the already strong geopolitical risk premium”, JBC Energy said in a note. Click here to read in full the global oil markets report.

2:40 pm

Asia stocks dip on expectations of smaller Fed rate cut

File photo   -  REUTERS

 

Asia stocks fell on Monday as investors scaled back expectations of an aggressive Federal Reserve interest rate cut, while crude oil prices rose on heightened West Asian tensions following Iran's seizure of a British tanker.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.4 per cent. Japan's Nikkei closed down 0.2 per cent on the more tempered Fed easing views and caution ahead of the domestic earnings season, which starts this week. Click here to read in full the Asian markets report.

2:25 pm

Oriental Bank Q1 net profit at Rs 112.68 cr

 

Aided by lower provisioning on non-performing assets (NPAs), Oriental Bank of Commerce (OBC) on Monday reported a net profit of Rs 112.68 crore for the first quarter ended June 30, 2019. In the same quarter last fiscal, the public sector bank had recorded a net loss of Rs 393.21 crore.

Total income for the quarter under review was Rs 5,634.98 crore, higher than the Rs 4,729.58 crore recorded in the same quarter last fiscal. Click here to read in full the report on OBC results.

2:05 pm

Sensex, Nifty wallow in negative territory

The benchmark indices, the BSE Sensex and the NSE Nifty, continued to trade in the red in the afternoon session on the Sensex. The Sensex was down 300 points or 0.79 per cent at 38,036. The Nifty was at 11,344, down 75 points or 0.66 per cent weaker.

The top gainers on the Sensex were YES Bank, Vedanta, Maruti, ONGC and Sun Pharma, while the laggards were led by HDFC, which was down 5 per cent and HDFC Bank, which was down 3.5 per cent. Bajaj Finance, Hindustan Unilever and Kotak Bank were among the other stocks that dropped lower in the session

The BSE index was weighed down by losses of over 2 per cent each in the finance and realty indices, followed by banking, energy and FMCG.

On the other hand, the index was propped up by gains in the energy, metal, telecom and oil and gas indices.

1:55 pm

Gold ticks up on Iran tensions

Gold up nearly 0.6 per cent so far this week. File Photo   -  BusinessLine

 

Gold prices gained on Monday following a steep fall in the previous session as tensions in West Asia and weaker financial markets supported the metal, while a stronger dollar kept a lid on gains.

Spot gold was up 0.2 per cent at $1,427.31 per ounce, as of 0735 GMT. The metal hit $1,452.60 in the previous session, its highest since May 2013, before closing 1.5 per cent lower. US gold futures were up 0.1 per cent at $1,427.80 an ounce. Click here to read in full the gold report.

1:35 pm

Nifty call: Sell on rallies with fixed stop-loss at 11,375 levels

 

Extending last week's decline, the Sensex and Nifty commenced the session in negative territory, with a gap-down open. Both the key indices continue to trade in negative territory.

The Asian markets are also down; the Nikkei 225 has fallen 0.23 per cent to 21,416 and the Hang Seng Index has tumbled 1.2 per cent to 28,430 levels.  Click here to read in full the Nifty call report.

12:45 pm

Taxman to get fresh ammo in fight against evaders fleeing abroad

 

An amendment to the Income Tax Act, 1961, proposed by Finance Minister Nirmala Sitharaman in her maiden Union Budget speech could allow the Centre to recover income-tax dues from defaulters who have become residents of other countries. Click here to read in full the report on taxman to get fresh ammo against evaders fleeing abroad.

12:30 pm

Benchmark indices extend losses

The Sensex and Nifty extended their losses at mid-session on Monday. The Sensex was down 313 points or 0.82 per cent at 38,023, while the NSE slipped 88 points or 0.78 per cent at 11,330.

The top gainers on the Sensex were YES Bank, Vedanta, Sun Pharma, Maruti and Asian Paints, while the laggards were led by HDFC, which dropped 4.62 per cent, followed by HDFC Bank that was down 3.55 per cent, Bajaj Finance (-3.22 per cent), Kotak Bank (-2.78 per cent) and Hindustan Unilever (-1.68 per cent).

The metals, energy, telecom and technology indices propped up the BSE index gaining up to 1 per cent during the session, while realty, finance, banking and consumer durables dragged it down, falling up to 2 per cent.

12:20 pm

Circuit breakers trip, IPOs spiral up as China's Nasdaq-style bourse debuts

 

Trading hit a feverish pitch on China's new Nasdaq-style board for homegrown tech firms on its debut on Monday, with most stocks surging and drawing attention away from the main board.

All of the first batch of 25 companies - ranging from chip-makers to biotech firms - more than doubled their already frothy IPO prices on the STAR Market, operated by the Shanghai Stock Exchange. Click here to read more on China's Nasdaq-style bourse debuts.

 

12:10 pm

DHFL falls in choppy trade ahead of audited results

DHFL stock continued to rally for second day in a row. File Photo   -  Reuters

 

Shares in troubled mortgage lender DHFL down 2 per cent at Rs 52.40 amid a broader sell-off in shares.

The stock had earlier risen up to 4 per cent after opening.

According to reports, AION Capital is to pick up majority stake in DHFL in a $1.5-billion capital infusion; and the deal is likely to be announced on Monday.

The stake of DHFL's promoter family would fall to 10 per cent, and the deal may not involve haircut for lenders, the report said.

A DHFL representative did not immediately respond to Reuters' calls seeking comment.

DHFL, the country's fourth-largest housing finance company, warned this month that its financial situation was grim and business had ground to a halt.

Separately, the company is expected to report audited March-quarter results on Monday. Shares in DHFL have slid 78 per cent this year. - Reuters

12:05 pm

Mahindra CIE sees worst day since Feb 2016 on Q1 profit drop

 

Shares of Mahindra CIE Automotive Ltd fell as much as 11.8 per cent to Rs 182.3, their biggest daily percentage loss since Feb 2016.

The auto components supplier on Friday posted a 9 per cent fall in June-quarter profit to Rs 126 crore ($18.25 million).

The stock has an estimated PE of 12.51, below the sector average of 16.90.

The stock is at its lowest since January 2017. Up to the last close, the stock had fallen 19.6 per cent this year, while peer Minda Industries Ltd was down 11 per cent. - Reuters

11:50 am

HDFC Bank falls on hit to asset quality, loan growth

 

Shares of HDFC Bank Ltd, India's biggest lender by market capitalisation, fell as much as 3.1 per cent per cent to Rs 2,301, their lowest since May 16.

The bank on Saturday reported a 21 per cent rise in June-quarter profit, but said gross NPAs, a measure of asset quality, rose to 1.4 per cent vs 1.36 per cent in the previous quarter. Click here to read in full the HDFC Bank share price report.

11:35 am

Future Perfect: Consider calendar put-spread strategy on Maruti

 

The short-term outlook remained negative for Maruti Suzuki (₹5,768.9). The long-term outlook will turn positive only if Maruti Suzuki breaks ₹6,513 comfortably. If the stock maintains the current downtrend, it could reach ₹5,144, where it finds major support. A break below this level could trigger a heavy fall for Maruti Suzuki. Click here to read in full outlook for Maruti.

11:25 am

Benchmarket indices undertone weak

The Sensex and Nifty maintained their weak undertone in the morning session on Monday. The BSE benchmark was trading at 38,055, a fall of 281 points or 0.73 per cent. In early trading, the Sensex dropped more than 300 points.

The Nifty was quoting at 11,345, down 74 points or 0.65 per cent weaker.

The top gainers on the Sensex were YES Bank, Vedanta, Sun Pharma, Asian Paints and HeroMotoCorp, while the laggards were HDFC, Bajaj Finance, HDFC Bank, Kotak Bank and Hindustan Unilever.

The healthcare, telecom, metals and energy indices helped prop up the BSE in the morning session, rising 0.7-1 per cent higher, while realty, banking, consumer durables and FMCG dropped between 0.8-2 per cent lower.

 

11:15 am

Asia stocks dip on likely smaller Fed rate cut, oil gains

 

Asia stocks eased on Monday as investors reduced expectations of an aggressive interest rate cut by the Federal Reserve, while heightened West Asia tensions following an Iranian seizure of a British tanker lifted crude oil prices.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1%.

South Korea's KOSPI shed 0.3%, Australian stocks lost 0.2% and Japan's Nikkei fell 0.5%. Click here to read in full the Asian markets report.

11:05 am

Crisil clarifies it has never rated IL&FS, Financial Services or any debt issued by the cos

 

Ratings agency CRISIL today clarified that it has never rated IL&FS Ltd, IL&FS Financial Services Ltd, or any debt issued by these companies. Click here to read in full the report on Crisil clarifies it never rated IL&FS.

10:55 am

Oil gains as Gulf tanker seizure raises tensions

 

Oil prices rose on Monday amid high tensions in the Middle East after a British tanker was seized by the Iranian military at the end of last week.

Brent crude futures were up 51 cents, or 0.8%, at$62.98 a barrel by 0042 GMT. The international benchmark rose to as high as $63.47 earlier.

West Texas Intermediate (WTI) crude futures were up 15 cents, or 0.3%, at $55.78. WTI fell over 7% and Brent fell more than 6% last week. Click here to read in full the global crude oil markets report.

10:45 am

Dollar clings to gains as Gulf tensions support safe-haven bid

 

The dollar held recent gains on Monday as investors tempered some of their expectations for deep US interest rate cuts this month and heightened Middle East tensions supported safe-haven assets.

While currency market focus will mostly centre on global central bank decisions scheduled for the next two weeks, investors are also watching for any developments in US-China trade negotiations. Click here to read in full the global forex market report.

10:30 am

Rupee slips 26 paise to 69.06 versus $ in early trade

The rupee opened strong at 69 at the interbank forex market.   -  Reuters

 

The rupee opened on a cautious note and fell 26 paise to 69.06 against the US dollar in early trade on Monday amid heavy selling in domestic equities and rising crude oil prices.

Forex traders said strengthening of the greenback vis-a-vis other currencies overseas and foreign fund outflows weighed on the local unit.

At the Interbank Foreign Exchange, the rupee opened at 68.95 then fell to 69.06 against the US dollar, showing a decline of 26 paise over its previous closing. Click here to read in full the rupee report.

 

10:20 am

A floater plan for your family

 

Family floater health insurance plans, as the name suggests, cover your entire family under one policy (and one sum insured). It is similar to individual plans in its features and benefits. It has a waiting period, and deductible clauses, wherever applicable. Why should you opt for family floater? How is it better than individual plans? Click here to read in full the report on why go for a floater plan for your family.

10:10 am

A ‘duty’ to fight dumping of steel products

 

Imports of flat rolled products of steel, plated or coated with alloy of Aluminium and Zinc (Al-Zinc), might attract anti-dumping duty (ADD) soon, as recommended by the Directorate General of Trade Remedies (DGTR), an investigation arm of the Finance Ministry.

The alloy of Al-Zinc resists corrosion and is used in the infrastructure, solar power, white goods and appliances, and real estate (for roofing, walling, decking, cladding and framing) sectors. Click here to read more on a 'duty' to fight dumping of steel products.

10:00 am

Sensex, Nifty down 0.8%

The Sensex and Nifty both lost around 0.80 per cent in early trading on Monday. The Sensex was down 328 points or 0.86 per cent at 38,008, while the Nifty was at 11,325, down 94 points or 0.82 per cent.

The top gainers on the Sensex were Vedanta, YES Bank, Asian Paints, Tata Motors and Sun Pharma, while the laggards were HDFC, HDFC Bank, Bajaj Finance, Kotak Bank and IndusInd Bank.

Among the sectoral indices, auto and metals were the top gainers, rising more than 1 per cent each, while finance, banking and realty fell more than 1 per cent each.

According to an agency report, the Sensex plunged in early trade amid heavy foreign fund outflow and weak domestic as well as global cues.

In the previous session, the 30-share index cracked 560.45 points or 1.44 per cent to settle at 38,337.01. Similarly, the broader NSE Nifty sank 177.65 points or 1.53 per cent to 11,419.25. This was the second-biggest fall for the Sensex in 2019. The index had plunged 792.82 points on July 8 following the Budget.

In early trade, HDFC Bank was among the top losers in the Sensex pack, cracking up to 3 per cent, after the lender reported a rise in non-performing assets (NPAs).

During the quarter, gross NPAs rose to Rs 11,768.95 crore, which is 1.40 per cent of the total advances, compared with Rs 9,538.62 crore, which was 1.33 per cent in the same quarter 2018-19 fiscal.

On a net basis, foreign institutional investors sold equities worth Rs 950.15 crore, while domestic institutional investors purchased shares to the tune of Rs 733.92 crore, provisional data available with stock exchanges showed Friday.

According to experts, the sell-off by foreign funds was due to the government’s reluctance to tweak foreign portfolio investors (FPIs) income tax surcharge.

The deficiency in monsoon rain and weak corporate earnings have also impacted the risk sentiment, they said.

With domestic investors already battling concerns of a slowing economy, markets are witnessing broad-based selling, said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.

“The market reaction post the BJP victory in 2019 is in stark contrast to the bullish tenor in 2014, and market participants expecting a repeat of 2014 are clearly disappointed, he added.

Meanwhile, the Indian rupee depreciated 22 paise (intra-day) to 69.02 against the US dollar.

The global oil benchmark Brent crude futures were trading 1.34 per cent higher at 63.31 per barrel.

Elsewhere in Asia, Shanghai Composite Index, Hang Seng, Nikkei and Kospi were trading in the red in their respective early sessions. (With inputs from PTI)

9:55 am

Infosys: Back in business (Hold)

 

After some rough weather owing to a churn in the top management, Infosys appears to be finding favour with investors. The stock has rallied in the past few days and touched its 52-week high, drawing comfort from a good deal pipeline and revenue visibility.

The board’s approval of a new capital allocation policy that would return 85 per cent of cumulative free cash-flows to investors (against 70 per cent earlier) over five years has also cheered them. Click here to read more on prospects for the Infosys stock.

9:50 am

Commodity Analysis: Short-term outlook is bullish for gold

 

Gold began the week on a stable note and turned volatile towards the end of last week. After oscillating between $1,400 and $1,430 per ounce in the initial part of the week, the global spot gold prices surged to a high of $1,446 on Friday. However, the yellow metal came-off from its high, giving back most of the gains, and closed at $1,425.37 per ounce, up 0.7 per cent for the week.

Silver, on the other hand, outperformed gold last week. The global spot silver prices sky rocketed over 6 per cent last week. The global silver prices breached the key resistance level of $14.50 per ounce and surged to a high of $16.59. However, it gave back some gains and closed the week at $16.20 per ounce. Click here to read in full the Commodity Analysis on short-term outlook for gold bullish.

9:40 am

What will the harvest be?

 

In her maiden Budget presentation, Finance Minister Nirmala Sitharaman introduced the ‘zero budget farming’ concept. In many ways, it was a ‘zero’ budget for agriculture this time — the sector had nothing to show for itself — but in fact what she was referring to was a farming method where there is no external input of any sort — no hybrid/GM seeds, no fertilisers, no pesticides — and no loans.

Successive governments have over five decades been incentivising farmers to adopt chemical farming, so what accounts for this about-turn? Click here to read in full What will the harvest be.

9:35 am

Your first steps to investing

 

You’ve bagged a plum offer, and salary credits from your employer have just begun to fatten up your bank balance. What should be your first steps into the world of investing? Here’s a game-plan. Click here to read in full the report on the first steps to investing.

9:30 am

Big Story: Be alert! Taxman’s watching

 

With the Finance Bill passed by the Lok Sabha, the dust may have settled on most budget announcements. But there are few things worth a deeper look. Every year, in the recent past, the Budget has been incrementally taking steps to ensure that high-value transactions don’t escape the taxman’s notice. This year is no different. Be it TDS (tax deduction at source) on cash transactions above a certain limit or the bringing under the TDS netpayments to contractors or professionals, the interchangeability of PAN (permanent account nmber) and Aadhaar or the addition to list of persons expected to file tax returns, the first Budget of the new government has continued to take steps to widen the tax base. It would help if taxpayers pay attention to all what’s on the government’s radar and keep their dealings clean. Click here to read in full the Big Story on Taxman's watching

9:15 am

Opening bell

The benchmark indices, the BSE Sensex and the NSE Nifty, opened the session on a weak note.

The Sensex was at 38,147, down 189 points or 0.50 per cent lower, while the Nifty dropped 36 points or 0.32 ber cent to quote at 11,383/

 

9:10 am

Index Outlook: Index Outlook: Near-term outlook is bearish

 

Last week, the benchmark indices breached key support levels and fell sharply. Tax-related Budget proposals that had spooked foreign portfolio investors (FPIs), continued to weigh on the market. Finance Minister Nirmala Sitharaman, standing firm on the proposals, despite pleas by FPIs, triggered a significant fall in indices on Friday.

Domestic corporate earnings, rupee action and progress of the monsoon are key factors to watch in the July month derivatives expiry week. On the global front, ECB rate action and US GDP data release are key events to note.

 

Nifty 50 (11,419.2)

Following an initial rally, the Nifty index encountered a key resistance at 11,700 and declined 133 points or 1.2 per cent for the previous week. On Friday, the index had tumbled 1.5 per cent, breaching a key support at 11,500 . This fall has strengthened the downtrend that has been in place from the June high of 12,103. The index trades well below the 21- and 50-day moving averages. The daily relative strength index has entered the bearish zone from the neutral region and the weekly RSI features in the neutral region with a downward bias.

Also, the daily price rate of change indicator hovers in the negative territory, implying selling interest. Inability to move beyond the near-term resistance level of 11,700 has strengthened this barrier. Going forward, an emphatic break-out of this level is needed to bring back bullish momentum. Such a break can witness a corrective up-move to 11,800 and then to 11,850 levels in the short term. A further break above the vital resistance in the 11,850-11,900 band will reinforce the bullish momentum and push the index higher to 12,000, which is a key psychological resistance.

However, the index currently tests next crucial support at 11,426, the floor of the gap created in mid-May this year with a negative bias. A strong plunge below this base will further strengthen the short-term downtrend and drag the index lower to the subsequent supports at 11,250 and 11,150 levels in the ensuing weeks. With the recent fall, investors with a medium-term perspective can book profits and re-enter at lower levels.

Medium-term trend: Last week, the index had breached a key base at 11,500 and continued to trend down. Next key medium-term support is at 11,200. The medium-term uptrend will stay in place as long as the index trades above the support band of 11,000-11,100. But a decisive fall below this base level will alter the uptrend and drag the index down to next key medium-term support level of 10,800 and 10,600 over the medium term. Conversely, an emphatic break-out of the resistance at 12,000 is required to bring back bullish momentum. Such an upmove will strengthen the uptrend and take it northwards to 12,500 in the medium term.

Sensex (38,337)

The Sensex extended the down-move and declined 399 points or 1 per cent last week. After an initial rally above 39,000, the index failed to sustain and resumed its downtrend. Subsequently, it breached the key support at 38,600 and extended the downtrend. Since marking an all-time high at 40,312 in early June, the index has been in a short-term downtrend. It hovers way below the 21- and 50-day moving averages. The indicators and oscillators in the daily chart hover in the bearish zone. The index can continued to trend downward and test support at 38,000 in the coming week.

A strong tumble below this base will strengthen and drag the index down to the next supports at 37,500 and 37,000 levels. On the other hand, the key resistances at 38,600 and 39,000 can limit the upside. An emphatic rally beyond 39,000 can witness a corrective up-move to 39,500 and 40,000 levels. However, only a strong break-out of the key barrier in the 40,000-40,200 band will underpin the medium-term uptrend and take the index higher to 40,400 and 40,800 levels over the medium term.

Nifty Bank (29,770.3)

Last week, the Nifty Bank index plummeted 831 points or 2.7 per cent, breaking below a vital support level of 30,500, decisively. The index continues to underperform the bellwether indices. With the recent fall, the daily RSI has entered the bearish zone and the weekly counter-part has entered the neutral region from the bullish zone. Besides, the daily as well as the weekly price rate of change indicators hover in the negative territory, implying selling interest. The Nifty Bank trades well below the 21- and 50-day moving averages. The near-term outlook is bearish for the index. It can find support at 29,500.

A conclusive fall below this level can pull the index lower to 29,000 and 28,600 over the medium term. Key immediate resistances are at 30,000 and 30,300. Traders with a short-term view can go short in rallies with a stop-loss at 30,150 levels. On the upside, only a strong rally above 30,500 can bring back bullish momentum and take the index higher to 31,000. Subsequent resistances are placed at 31,500 and 31,700 levels.

Global cues

The Dow Jones Industrial Average retreated marginally by declining 177 points or 0.6 per cent to close at 27,154 levels. Key supports are at 27,000 and 26,500 levels. Near-term resistances are pegged at 27,360 and 27,500

The Nikkei 225 had declined 218 points or 1 per cent to close at 21,466 amid volatility. Resistances are at 21,750 and 22,000. Supports to note are placed at 21,000 and 20,700 levels.

9:00 am

Weekly trading guide for week beginning July 22, 2019

SBI (₹356)

SBI began the week on a strong note and surged over 2 per cent, but failed to sustain higher. The stock reversed sharply lower from the high of ₹373, giving back all the gains and closed 2 per cent lower for the week. The daily chart indicates the formation of a double-top reversal pattern. The neckline support of this pattern is at ₹350, which can be tested in the early part of the week. If SBI manages to bounce back from this support, a rise to ₹365 and ₹370 is possible again. In such a scenario, SBI can continue to trade sideways between ₹350 and ₹373 for some more time. Also, a decisive close above ₹373 is needed to bring back the bullish sentiment and take the stock up to ₹395 and ₹400. But if SBI breaks decisively below ₹350, it can come under pressure. Such a break will confirm the double-top pattern. In such a scenario, SBI can fall initially to ₹345. A further break below ₹345 will then increase the likelihood of the stock extending its fall to ₹335 thereafter.

 

ITC (₹268.4)

ITC fell for the second consecutive week and was down 2.4 per cent. The fall last week has taken the stock below the crucial support level of ₹270, which was holding well over the last few weeks. ITC is under pressure now. As long as it trades below ₹270, the outlook is bearish. Immediate support is at ₹267. If ITC manages to bounce back from this support, an intermediate upmove to ₹270 is possible. But the upside is likely to be capped as fresh sellers are likely to emerge at higher levels. There is a strong likelihood of the stock falling to ₹260. A corrective rally to ₹268-270 cannot be ruled out from ₹260. However, the outlook will continue to remain negative. An eventual break below ₹260 will increase the possibility of the stock extending its fall to ₹250 or even ₹240 over the medium term. The region between ₹250 and ₹240 is a strong long-term support zone, which can halt the fall and trigger a reversal. So, such a fall to ₹250-240 will be a good buying opportunity from a long-term perspective.

 

Infosys (₹785.6)

 

Infosys surged to record highs and was up over 8 per cent last week. Sanguine Q1 earnings triggered this sharp rise last week. The rise has brought the prolonged sideways move between ₹695 and ₹775 to an end. The stock has been stuck in this range since mid-January this year. It needs to be seen if Infosys sustains above ₹775; this will give a confirmation of the range breakout. As long as the stock remains above ₹775, the outlook is bullish and a retest of ₹800 is possible in the near term. Infosys has to rise past ₹800 decisively to gain fresh momentum. A strong break above ₹800 will see the stock rallying to ₹850 and ₹870 in the coming weeks. On the other hand, if Infosys remains below ₹800 and breaks below ₹775, a fall to ₹765 or ₹750 is possible. In such a scenario, the stock can remain range-bound between ₹750 and ₹800 for some time. However, the bias will continue to remain positive. A further fall below 750 looks less likely at the moment.

RIL (₹1,249)

 

RIL retained its ₹1,245-1,315 sideways range. The stock has been stuck inside this range over the last four weeks. Within this range, the stock tumbled 2.5 per cent last week and hovers at the lower end of the range. If RIL manages to bounce back, the sideways range will remain intact and a rise to 1,300 is possible. A breakout on either side of ₹1,245 or ₹1,315 will then determine the direction of the next move. If RIL breaks the range below ₹1,245, it can fall initially to ₹1,220 and then to ₹1,210 and ₹1,200. The region around 1,200 is a strong long-term support and a break below it, is less probable. But if RIL declines below ₹1,200, it will signal the end of the long-term uptrend that has been in place since 2017. In such a scenario, RIL can tumble to ₹1,150 and ₹1,100 on profit-booking. On the other hand, if RIL breaks above ₹1,315, an upmove to ₹1,350-1,360 is possible. It will also bring back the possibility of the stock revisiting ₹1,400 levels thereafter.

Tata Steel (₹458.1)

Tata Steel tumbled over 3 per cent last week. It has declined below the crucial support at ₹460. As long as it trades below ₹460, the outlook would be negative. Next support is at ₹445. A bounce from there can take the stock up to ₹480. In such a scenario, Tata Steel can remain range-bound between ₹445 and ₹480. The bias will remain negative. An eventual break below ₹445 will indicate the resumption of the long-term downtrend that has been in place since 2018. Such a break below ₹445 will drag the stock lower to ₹400. The region around ₹400 is a key support. As such a corrective bounce to ₹450 from ₹400 cannot be ruled out. However, investors should remain cautious as the current leg of down move may have the potential to take the stock to ₹350 or even lower levels in the medium- to long-term.

The writer is a Chief Research Analyst at Kshitij Consultancy Services

 

Published on July 22, 2019