Trade Setup: Top 15 things to know before market opens on February 25, 2022

Indian market benchmarks fell sharply for the seventh consecutive session on Thursday, losing over 5% as growing tensions between Russia and Ukraine frightened sentiment. The major indexes opened in the red and remained in the red for the duration of the trading day.

The Nifty50 has formed a long bear candle on the daily chart with a huge gap-down, with a violent breach of crucial support at 16,800-16,700 levels, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

“An immediate sharp recovery is not expected. Going by the daily chart, the downside breakout of the triangle pattern could open a potential downside of 15,900 levels in the near term,” he said.

Indian Indices

Sensex declined 2,702.15 points or 4.72% to 54,529.91 and Nifty was down by 815.30 points or 4.78% to 16,247.95 in the previous session. Sensex touched high and low of 55,996.09 and 54,383.20, respectively. All the 30 stocks declined on the index. Nifty traded in a range of 16,705.25 and 16,203.25 with all the 50 stocks declining on the index.

Broader Indices

The broader indices ended in red with the BSE Midcap index falling 5.53%, while the Small cap index was down by 5.77%. The top losing sectoral indices on the BSE were Realty down by 7.27%, Telecom down by 6.48%, Auto down by 6.05%, Industrials down by 5.79% and Basic Materials down by 5.65%, while there were no gainers on the BSE sectoral front.

Support and Resistance levels

Key support levels for the Nifty are placed at 16,066, followed by 15,883. If the index moves up, the key resistance levels to watch out for are 16,568 and 16,887, according to pivot charts.

SGX Nifty

The trends on SGX Nifty indicate a positive opening for the index in India with a 180-points gain. The Nifty futures were trading at 16,600.80 on the Singaporean Exchange around 06:45 hours IST.

Asian Markets

Asian markets finished sharply lower yesterday with shares in Hong Kong leading the region. The Hang Seng was down 3.21% while Japan’s Nikkei 225 was off 1.81% and China’s Shanghai Composite was lower by 1.70%.

US Markets

The S&P 500 rose 63.20 points, or 1.5%, to 4,288.70.

The Dow Jones Industrial Average rose 92.07 points, or 0.3%, to 33,223.83.

The Nasdaq rose 436.10 points, or 3.3%, to 13,473.59.

The Russell 2000 index of smaller companies rose 51.91 points, or 2.7%, to 1,996.

European Markets

European markets finished sharply lower yesterday with shares in Germany leading the region. The DAX was down 3.96% while France’s CAC 40 was off 3.93% and London’s FTSE 100 was lower by 3.88%.

SEBI has postponed the implementation of the F&O margin regulation until May 2, 2022

SEBI (Securities and Exchange Board of India) on February 24 issued an updated circular wherein it has extended the deadline to implement the new systems of compliance pertaining to segregation and monitoring of collateral at the client level. As per the original notice issued on July 20, 2021, the new compliance framework was supposed to come into force from December 01, 2021, but it had to be postponed due to the fiasco related to Karvy Stockbroking where clients’ shares had been pledged illegally as collateral against the loan. On November 23, 2021, SEBI had set the date of February 28, 2022, for implementation to happen but the regulator has decided to postpone it once again citing requests from various stakeholders for the postponement of the same. The new date for implementation has now been fixed as May 02, 2022.

Infosys introduces Metaverse Foundry, claiming to have already generated 100 use cases

Infosys launched Metaverse Foundry that will help its clients with adaptation, creation and also help scale the new technology. The company has already developed 100 use cases and is actively working with clients on the same, said a top executive. The move comes at a time when companies around the world are putting a huge focus on the metaverse. From Meta, formerly Facebook, and Microsoft, to IT services providers, the companies are investing significantly in the space. “Metaverse is no longer a buzzword and will play an important role as we enter a post-pandemic era where people probably want to live in the hybrid of physical and virtual worlds, Ravi Kumar S, President of Infosys told Moneycontrol. “The reason why we came up with the concept of Metaverse Foundry is that while some consumer businesses know what the use cases are, a large number of our clients are curious. So, the Foundry is this experimental infrastructure where you can discover, create and scale,” he said.

Moody’s increases India’s GDP growth forecast for 2022 to 9.5% from 7%

Moody’s Investors Service has raised its GDP growth forecast for India for the current calendar year to 9.5% from 7%, citing a stronger-than-expected economic recovery from the national lockdown of 2020 and the second wave of the COVID-19 pandemic in mid-2021. The  GDP growth forecast for 2023 has been retained at 5.5%. The calendar year forecasts translate into a projection of 8.4% growth for FY23 and 6.5% for FY24. The FY23 projection is 60 basis points higher than the Reserve Bank of India’s (RBI) forecast of 7.8%. However, the central government’s Economic Survey for 2021-22 estimated a real GDP growth rate of 8-8.5% for the next financial year, with the 2022 Budget assuming a nominal GDP growth rate of 11.1%.

India refunds Rs 7,900 crore to Cairn to settle a retro tax dispute

The Indian government has paid Cairn Energy Plc Rs 7,900 crore to refund taxes it had collected to enforce a retrospective tax demand, ending a seven-year-old dispute that had tarred the country’s image as an investment destination. The company, which is now known as Capricorn Energy PLC, in a statement, said it has received “net proceeds of $1.06 billion”, of which nearly 70 per cent will be returned to the shareholders. The tax department had used a 2012 legislation, which gave it powers to go back 50 years and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India, to seek Rs 10,247 crore in taxes from Cairn. Cairn had in 2006-07 reorganised its India business, which comprised operations of prolific Rajasthan oilfields, prior to its listing on stock exchanges. While the company sold majority holding in the India unit to Vedanta in 2011, it was in 2014 slapped with the tax demand notice over alleged capital gains made on the reorganisation.

PC Financial Services’ registration certificate has been cancelled by the RBI

The Reserve Bank of India (RBI) has cancelled the certificate of registration issued by PC Financial Services Pvt Ltd, according to an official statement. “In exercise of the powers conferred under Section 45-IA (6) (iv) of the Reserve Bank of India Act, 1934, the Reserve Bank has cancelled the Certificate of Registration (CoR) issued to M/s P C Financial Services Private Limited, New Delhi,” RBI said in a statement. Accordingly, PC Financial Services will not be able to transact the business of an NBFI (Non-Banking Financial Institution). The CoR of the company has been cancelled on account of supervisory concerns such as gross violations of RBI directions on outsourcing and Know Your Customer (KYC) norms. The company was also found to be charging usurious rates of interest and other charges to its borrowers in an opaque manner apart from indulging in unauthorized use of logos of Reserve Bank and Central Bureau of Investigation (CBI) for recovery from the borrowers in gross violation of the Fair Practices Code.

Bulk Deal data

SIRAJ VIRJI JARIA sold 3,82,500 shares of Crown Lifters Ltd at Rs 24.05 per share on NSE.

MOTILAL OSWAL MUTUAL FUND bought 5,42,000 shares in Barbeque Nation Hosp. Ltd at Rs 1,150.00 per share on the NSE.

PURVI PRABHATCHANDRA JAIN sold 57,400 equity shares in Focus Lightg at Rs 104.05 per share on the NSE, the bulk deals data showed.

POLAR CAPITAL LLP A/C POLAR CAPITAL FUNDS PLC – EMERGING MARKET STARS FUND – POLAR CAPITAL FUNDS PLC picked up 8,07,602 equity shares in Sunteck Realty Limited at Rs 442.79 per share respectively on the NSE.

EURO PACIFIC SECURITIES LIMITED sold 635,52,590 shares in Indus Towers Limited at Rs 226.84 per share on the NSE.

MANISH MAHESH GUPTA bought 2,00,433 shares of Jagsonpal Pharma Ltd. at Rs 235.33 per share on NSE.

VAAYU INFRASTRUCTURE LLP sold 6,17,403 shares in Vishal Fabrics Limited at Rs 103.85 per share on the NSE.

DII and FII data

Foreign institutional investors (FIIs) sold shares worth a net Rs 6,448.24 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 7,667.75 crore in the Indian equity market on February 24, as per provisional data available on the NSE.

NSE F&O Ban

No stock or security has been put under the F&O ban for February 25. 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.