Trade Setup: Top 15 things to know before market opens on April 20, 2022

Indian market benchmarks fell on Tuesday for the fifth day in a row, pulled down by severe selling pressure in the IT, FMCG, and TECK sectors. Throughout the day, the domestic indices bounced between gains and losses before plummeting drastically in late trades.

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The Nifty50 has formed a long negative candle on the daily chart, and the display of violent declines in the last two sessions indicates a steep downtrend is on the way, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

The overall chart pattern of the index suggests a decisive downtrend, he said. 

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Indian Indices

Sensex fell 703.59 points or 1.23% to 56,463.15 and Nifty was down by 215.00 points or 1.25% to 16,958.65 in the previous session. Sensex touched a high and low of 57,464.08 and 56,009.07, respectively. There were 4 stocks advancing against 26 stocks declining on the index. Nifty traded in a range of 17,275.65 and 16,824.70. There were 6 stocks advancing against 44 stocks declining on the index.

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Broader Indices

The broader indices ended in red with the BSE Midcap index falling 1.20%, while the Small cap index was down by 1.21%. The few gaining sectoral indices on the BSE were Energy up by 1.20% and Oil & Gas up by 0.25%, while IT was down by 2.64%, FMCG down by 2.57%, TECK down by 2.54%, Power-down by 2.52%, Realty down by 2.46% were the top losing indices on BSE.

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India VIX Index

Nifty or India VIX, a gauge of the market’s expectation of volatility over the near term, rose 2.28% to 19.78 on Tuesday.

SGX Nifty

The trends on SGX Nifty indicate a flat opening for the index in India with a 0.30-points gain. The Nifty futures were trading at 17,051.80 on the Singaporean Exchange around 06:45 hours IST.

Support and Resistance levels

The key support level for the Nifty is placed at 16,764, followed by 16,569. If the index moves up, the key resistance levels to watch out for are 17,215 and 17,471, according to pivot charts.

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US Markets

The S&P 500 rose 70.52 points, or 1.6%, to 4,462.21.

The Dow Jones Industrial Average rose 499.51 points, or 1.5%, to 34,911.20.

The Nasdaq rose 287.30 points, or 2.2%, to 13,619.66.

The Russell 2000 index of smaller companies rose 40.63 points, or 2%, to 2,030.77.

Asian Markets

Asian markets finished mixed on Tuesday. The Nikkei 225 gained 0.69%, while the Hang Seng led the Shanghai Composite lower. They fell 2.32% and 0.05% respectively.

European Markets

European markets finished lower yesterday with shares in France leading the region. The CAC 40 was down 0.83% while London’s FTSE 100 was off 0.20% and Germany’s DAX was lower by 0.07%.

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Major News Headlines

ACC Q1 Results: Net profit dips 30% YoY, revenue rises over 3%

Cement maker ACC Ltd on April 19 reported a 29.5% decline in consolidated net profit to Rs 396.33 crore for the first quarter ended March 2022, compared to a profit of Rs 562.59 crore a year-ago period. It reported a 41% increase in consolidated net profit on a sequential basis from Rs 281 crore in the previous quarter. The company, which follows the January-December financial year, posted the total revenue from operations during the January-March quarter at Rs 4,426.54 crore, up 3.13% from Rs 4,291.97 crore in the year-ago period. Sequentially, it grew 5% from Rs 4,226 crore in the December 2021 quarter. ACC Ltd is a subsidiary of Swiss building material major Holcim group (Earlier LafargeHolcim). “The January to March 2022 quarter was impacted due to the global rise in fuel costs driven by the overall geopolitical situation,” said Managing Director and CEO Sridhar Balakrishnan.

SBI, Axis Bank hikes MCLR on loans, EMI’s to go up

Banks are increasing the marginal cost of lending rate, after Bank of Baroda last week, now SBI and Axis Bank have also increased their lending rates. India’s largest lender, the State Bank of India (SBI), has increased the marginal cost of lending rate (MCLR) by 0.1%. The new rate is effective from April 15, 2021. In 2016, the Reserve Bank of India (RBI) introduced MCLR in floating-rate loan systems so that end consumers could get better-priced loans. This is the minimum rate of interest at which any bank could lend loans to its clients who have their loans benchmarked to this rate. Axis Bank has increased its Marginal Cost of Lending Rate (MCLR) by 5 basis points (bps) or 0.05% with effect from April 18, 2022. The benchmark one-year tenor MCLR will rise to 7.35%. The overnight, one-month, three-month and six-month MCLRs have been raised to 7.20%, 7.30% and 7.35% respectively. Another private sector lender, Kotak Mahindra Bank, increased its one-year MCLR by 0.05% to 7.4%, from April 16. Last week, Bank of Baroda, a public-sector lender, increased its MCLR by 0.05%, with effect from April 12.

L&T Infotech Q4 Results: Net profit rises 17% YoY, declares final dividend

Larsen and Toubro Infotech Limited (LTI), a mid-cap IT services provider in the country, on April 19 reported a consolidated net profit of Rs 637.5 crore in the fourth quarter of fiscal 2022, up 16.8% year-on-year (YoY) from Rs 545 crore in the corresponding quarter of the previous year. Sequentially, it improved by 4.1% from the reported profit of Rs 612 crore in the December 2021 quarter. Consolidated revenue grew 31.6% at Rs 4,302 crore for the quarter from Rs 3,269 crore in the year-ago period, on the back of broad-based growth across verticals and geographies. Revenues during the quarter were higher by 4% from Rs 4,137.6 crore registered in the previous quarter. In US dollar terms the company’s revenue grew by 27.5% YoY and 3.1% QoQ to $570.4 million. Revenues for the financial year 2022 were higher by 26.7% at Rs 15,669 crore compared to Rs 12,370 crore last year. The company’s board has recommended a final dividend of Rs 30 per equity share for the financial year 2021-22.

IMF slashes India’s GDP growth forecast by 80 bps to 8.2% for FY23

The International Monetary Fund (IMF), in its latest World Economic Outlook report, has cut its growth forecast for India for FY23 by 80 basis points to 8.2%, saying that higher commodity prices will hurt private consumption and investment. This was one of the sharpest cuts for emerging economies compared to the IMF’s January WEO forecasts. IMF also slashed its global growth outlook for the calendar year 2022 to 3.6% from 4.4% saying that global economic prospects have worsened significantly due to commodity price volatility and disruption of supply chains caused by the Russia-Ukraine war. Both Russia and Ukraine could experience large GDP contractions, it added. Medium-term global growth is expected to decline to about 3.3% over the medium-term, compared to an average of 4.1% in the period from 2004 to 2013, and growth of 6.1% in 2021. Despite the sharp cut, IMF’s growth forecast for India for the current financial year remains significantly higher compared to other agencies including the Reserve Bank of India, which earlier this month cut its FY23 GDP forecast to 7.2% from 7.8%. For the financial year 2023-24, IMF sees the Indian economy growing at 6.9%, while the RBI has projected an expansion of 6.3%.

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Bulk Deal data

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED sold 5,74,726 shares in Ansal Housing and Construction at Rs 8.47 per share on the NSE.

DIGVIJAY SHIVSHANGBHAI CHAVDA bought 1,50,000 shares in Bang Overseas Limited at Rs 67.20 per share on the NSE.

RAJASTHAN GLOBAL SECURITIES PVT LTD bought 4,00,000 shares in Eveready Industries India at Rs 319.89 per share on the NSE. 

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BANYAN TREE GROWTH CAPITAL L.L.C. sold 22,26,702 shares in HBL Power Systems Limited at Rs 65.77 per share on the NSE.

ADHEESH KABRA HUF bought 1,00,000 shares in Jeena Sikho Lifecare Limited at Rs 165.10 per share on the NSE.

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RAMA KRISHNA VARMA PENMETSA bought 37,00,000 shares in KBC Global Limited at Rs 9.75 per share on the NSE. 

VINOD SONI sold 55,500 shares in Priti International Limited at Rs 70.52 per share on the NSE.

SHIVANG R VACHHETA sold 3,09,000 shares in Vaxtex Cotfab Limited at Rs 21.50 per share on the NSE.

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DII and FII data

Foreign institutional investors (FIIs) sold shares worth a net Rs 5,871.69 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 3,980.81 crore in the Indian equity market on April 19, as per provisional data available on the NSE.

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NSE F&O Ban

Tata Power is under the F&O ban for April 20. Securities in the ban period under the F&O segment include companies in which the security has crossed 95% of the market-wide position limit.