Nifty forms Doji pattern ahead of F&O expiry

The Nifty50 on September 28 extended weakness for the sixth consecutive session to hit a two-month low, and closed below the psychological 17,000 mark with a nearly one percent loss, ahead of a day of monthly expiry of September futures and options contracts, tracking consistent nervousness in global counterparts.

The index has formed a Doji kind of pattern on the daily charts as the closing was near its opening levels, indicating the indecisiveness among bulls and bears about the future market trend. The index is near its crucial support level of 16,800-16,700, and if that gets broken then there could be further sharp selling in the market; otherwise, 17,000 is going to act as immediate resistance, experts said.

Banking and financial services, metal, oil and gas, and select FMCG stocks weighed down the market, while the broader markets also traded lower with the Nifty Midcap 100 and Smallcap 100 indices falling a third of a percent and half a percent respectively.

The Nifty50 opened lower at 16,870 and remained under pressure for a major part of the session to hit the day's low of 16,820. The index ended with 149 points loss at 16,859.

"Technically, we are of the view that 17,000 would act as an immediate resistance level, below which, the correction wave is likely to continue till 16,700-16,650," Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.

Inflation shifts investor attention away from China slowdown, says economist

A generational surge in inflation in advanced economies is stealing the attention of investors from a generational slowdown in China that is arguable of much greater importance for the long-term global outlook, according to the Group Chief Economist at Capital Economics.

"We recently lowered our forecast for this year's officially reported GDP growth rate to 3 percent from 4 percent – the government's 5.5 percent target set in March has been quietly abandoned – but in reality don't expect the Chinese economy to grow at all," Neil Shearing said in a note.

"The conventional response in Beijing to such weakness would be to loosen policy. But the past week has again revealed the constraints under which policymakers in China are operating."

China's zero-Covid policy has hurt growth in recent months even as a slowing global economy weighs on demand for its exports. Central banks across the world are also tightening monetary policy at a sharp pace to curb red-hot inflation, further exacerbating growth woes.

Financial markets have whipsawed. The S&P 500 sank to the lowest since December 2020 overnight and the US Treasury yields continued to rise, with the 10-year rate climbing to the highest since April 2010.

After a decade-long run of giddying expansion, mounting evidence of bad economic news from China reflects a structural slowdown that's now in full train. Investors can be forgiven for having more immediate concerns on their mind, but they should be paying attention."

Amid a surge in the dollar, the People's Bank of China is trying to prevent the renminbi from going much beyond the seven-to-a-dollar level. The Chinese central bank on Monday hiked the reserve ratio for currency forwards, a move aimed at deterring speculation against the renminbi.

While there is nothing sacrosanct about the seven-to-a-dollar level, it is the line in the sand that policymakers appear to have drawn amid concerns that an overt weakening of the currency could encourage capital outflows, which would, in turn, destabilize the domestic financial system, Capital Economics said.

Nse Expiry Express outlook

 Bank Nifty opened negative and moved in a negative to range bound manner for the first half of the session but then witnessed some strength in the latter half. Overall it moved in a consolidative manner with the pressure of bears at 41500 zones but support based buying was seen at lower zones. It formed a Doji sort of candle on daily scale and closed the day with losses of around 265 points. Now it has to hold above 41000 zones to continue the positive momentum towards 41500 and life time high of 41840 zones while on the downside support exists at 41000 and 40750 levels.

Expiry day point of view : Overall trend is likely to be volatile and now it has to hold above 41000 zones to witness an up move towards 41250 then 41500 zones while support exists at 41000 then 40750 zones

Trading Range : Expected wider trading range : 40750 to 41500/41840 zones

Option Strategy : Option traders can initiate Bull Call Ladder Spread (Buy 41200 CE, Sell 41500 and Sell 41800 CE) to play the positive with restricted upside

Option Writing : Option writers are suggested to Sell 42000/42100 Call & 39700/39800 Put in pair with double the SL

Weekly Change : Bank Nifty is up by 1.05% at 41203 on weekly basis. Bank Nifty VWAP of the week is near to 41230 levels and it is trading near same levels, indicates buying on declines but with restricted upside for expiry day point of view.

NIFTY: 17718

Nifty index opened negative and moved in a volatile way within a wider range of 175 points. It faced some weakness at higher levels but took support near 17667 zones and rebounded slightly to close with losses of around 100 points. It formed a small bodied candle on daily scale in between the broader trading range which indicates decisiveness. Even though buying interest was seen from lows but absence of follow up activity is seen at higher zones. Now, it has to hold near to 17667 zones, for an up move towards 17850 and 18000 zones whereas support exists at 17550 and 17442 zones.

Expiry day point of view: Overall trend is likely to remain volatile and now it has to hold above 17667 zones, to extend its move towards 17850 zones while on the downside support exists at 17550 then 17442 zones.

Trading Range : Expected wider trading range : 17442 to 17850/18000 zones

Option Strategy : Option traders can initiate Bear Put Ladder Spread (Buy 17700 PE, Sell 17600 PE and Sell 17450 PE) to play the downside bias

Option Writing : Aggressive Option writers can sell 18000 Call and 17250 Put in pair with double the SL due to higher volatility

Weekly Change : Nifty index is up by 1.07% at 17718 on a weekly basis. Nifty VWAP of the week is near to 17735 levels and it is trading around same levels, indicates buying on declines but upside is capped for expiry day point of view.

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Housing com to invest in technology, brand promotion

 Agarwala attributed the rise in revenue of both Housing.com and PropTiger.com to strong revival in housing demand after the second wave of the pandemic.
He highlighted that Housing.com’s revenue in the quarter ended June was for the first time higher than its closest competitor 99acres.com. On the outlook for the current financial year, Agarwala said REA India expects high double-digit growth but it would be difficult to match last year’s performance of 92 per cent increase in revenue. Losses will start reducing from 2023-24 fiscal year.
He attributed the growth in revenue to the company’s "brave" decision to keep investing in business, technology and brand during the pandemic, and that "paid off". "We never laid off anybody, we in fact, hired more people. We continued to invest in our product and technology, and also launched a new platform such as Housing Edge, which is doing very well for us. We continue to spend money on our brand and were the leading spender in terms of brand building during all of COVID," he observed.
Increased digital adoption in the real estate sector also helped Housing.com. "Third thing is, I think, residential real estate received a big boost in a funny way because of COVID. I think people’s relationship and equation with a home changed. Everybody realised that during a time like COVID, home was their only safe haven. That, I think, gives a renewed lease of life to residential real estate," Agarwala said.
Low interest rates on home loans and stamp duty cuts in a few states were also major demand drivers for residential properties. In December 2020, Australia’s REA Group acquired a controlling stake in Elara Technologies that owned these three portals. Elara Technologies has been renamed as REA India, which currently as 17 offices across India.
REA India assists consumers through their entire home seeking journey all the way from initial search and discovery to financing to the final step of transaction closure. Housing.com, which was founded in 2012, is a full stack proptech platform for homeowners/home seekers, landlords, developers, and real estate brokers. It offers listings for new homes, resale homes, rentals, plots, commercial spaces and co-living spaces in India.

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