Trade Setup: Top 15 things to know before market opens on March 3, 2022

Automobiles, banking, and financial sectors dragged on Indian equity benchmarks, which closed over a per cent down on Wednesday after a two-session rally. Furthermore, the escalating Ukraine situation, combined with rising crude oil prices, impacted market sentiment.

The Nifty50 has formed a bullish harami candlestick pattern on the daily chart, supporting a pullback rally, according to Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

However, he said the short-term texture appears to be weak, which suggests that a fresh rally will be possible only after the 50-scrip index crosses 16,680. Beyond that level, the Nifty could rally up to 16,750-16,800 levels, but as long as it is below 16,650, there are high chances of a slump to 16,550-16,500 levels, he added.

Indian Indices

Sensex fell 778.38 points or 1.38% to 55,468.90 and Nifty was down by 187.95 points or 1.12% to 16,605.95 in the previous session. Sensex touched high and low of 55,755.09 and 55,020.10, respectively. There were 7 stocks advancing against 23 stocks declining on the index. Nifty traded in a range of 16,678.50 and 16,478.65. There were 16 stocks advancing against 34 stocks declining on the index.

Broader Indices

The broader indices ended in red with the BSE Midcap index falling 0.17%, while the Small cap index was down by 0.12%. The top gaining sectoral indices on the BSE were Metal up by 4.58%, Energy up by 1.73%, Utilities up by 1.52%, Power up by 1.38% and Basic Materials up by 1.07%, while Auto down by 2.87%, Bankex down by 2.25%, Finance down by 2.07%, Consumer Discretionary down by 1.73% and Telecom down by 1.62% were the top losing indices on BSE.

Support and Resistance levels

The key support level for the Nifty is placed at 16,497, followed by 16,388. If the index moves up, the key resistance levels to watch out for are 16,697 and 16,787, according to pivot charts.

SGX Nifty

The trends on SGX Nifty indicate a flat opening for the index in India with a 0-points loss. The Nifty futures were trading at 16,657.80 on the Singaporean Exchange around 07:00 hours IST.

Asian Markets

Asian markets finished broadly lower yesterday with shares in Hong Kong leading the region. The Hang Seng was down 1.88% while Japan’s Nikkei 225 was off 1.68% and China’s Shanghai Composite was lower by 0.13%.

US Markets

The S&P 500 rose 80.28 points, or 1.9%, to 4,386.54.

The Dow Jones Industrial Average rose 596.40 points, or 1.8%, to 33,891.35.

The Nasdaq rose 219.56 points, or 1.6%, to 13,752.02.

The Russell 2000 index of smaller companies rose 50.37 points, or 2.5%, to 2,058.87.

European Markets

European markets finished broadly higher yesterday with shares in France leading the region. The CAC 40 was up 1.59% while London’s FTSE 100 was up 1.36% and Germany’s DAX was up 0.69%.

NSE lets Indian investors trade in specific US stocks from March 3

Investors in India will be able to trade in certain US stocks beginning March 3 through the NSE International Exchange (NSE IFSC), a wholly-owned subsidiary of the National Stock Exchange (NSE). Investors can purchase NSE IFSC receipts on US stocks in the form of unsponsored depository receipts (DRs). The NSE IFSC is situated in Gujrat’s, Gujarat International Finance Tec-City (GIFT City). To begin, this will feature DRs from 50 US companies, including Apple, Alphabet, Amazon, Tesla, Microsoft, Morgan Stanley, Nike, P&G, Coca-Cola, and Exxon Mobil, reported Business Standard. Indian retail investors would be permitted to transact on the NSE IFSC platform under the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS) limits, which presently stand at $250,000 per year. Domestic investors will be required to open a Demat account with the IFSC, and stock receipts will be treated as foreign assets when filing income tax returns. Short-term capital gains will be taxed at the slab rate, whilst long-term capital gains will be taxed at 20% with indexation.

OPEC+ leaves output increase plan unchanged

Despite appeals to raise output to reduce spiralling crude oil prices, the Organization of Petroleum Exporting Countries (OPEC) and its producing partners, known as OPEC+, have opted to stick to their plan to increase output by 400,000 barrels per day (BPD) in April. The group has been gradually rolling back the historic production cuts that were undertaken when global demand plummeted due to the pandemic. While there are concerns that the escalating conflict between Russia and Ukraine could potentially disrupt demand, OPEC+ had signalled that it may stick to its production increase plan ahead of the meeting on March 2.  “Based on internal consultation held exclusively by the OPEC and participating non-OPEC oil-producing countries in the Declaration of Cooperation (DoC), it was noted that current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market and that current volatility is not caused by changes in market fundamentals but by current geopolitical developments,” OPEC+ said in a statement. Global benchmark Brent hit $113 a barrel on news that OPEC+ will stick to its plan of small and gradual increase in output.  The group has scheduled its next meeting for March 31. 

Vedanta declares its third interim dividend for the fiscal year 2022

Vedanta Ltd has declared an interim dividend of Rs 13 per equity share, which will lead to an outgo of Rs 4,832 crore for the mining major. This was the third interim dividend for the fiscal year 2021-22. The Board of the company, which met on March 2, approved the interim dividend, which translates to 1,300 % on the face value of every equity share worth Rs 1, according to a stock exchange announcement. The record date for the purpose of payment of the dividend is March 10, it added. In September 2021, Vedanta announced an interim dividend of Rs 18.50 a share and in December 2021, it gave Rs 13.50 a share dividend. Clubbing all the three dividends, its dividend yield comes to around 11.62% of its closing price as of March 2. The dividend outgo in September was Rs 6,876.82 crore while that in December was Rs 5,018.22 crore.

Union Bank of India raises Rs 1,500 crore through bond issuance

Union Bank has raised Rs 1,500 crore by issuing Basel III compliant bonds to investors. The bank has allotted unsecured, subordinated, non-convertible, taxable, perpetual, fully paid-up Basel III compliant additional tier-I bonds in the nature of debentures, aggregating to Rs 1,500 crore. The bonds are eligible for inclusion in the tier-I capital of the bank. To comply with Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes. These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks. Tier-I capital is the core capital of a bank’s reserves and it is primarily used to fund business activities. Banks are required to hold certain levels of tier 1 and tier 2 capital as reserves so that they can absorb large losses without threatening their stability.

India Inc to give 9.1% hike in 2022, up from 8% in 2021: Report

All of India Inc is gearing up for an increment in 2022 compared to 92% in 2021, said Deloitte Touche Tohmatsu India LLP ((DTTILLP). The consulting firm estimates increments to go up to 9.1%in 2022 from 8% in 2021. “According to the survey findings, almost all organisations are planning to give increments in 2022, compared with 92% in 2021 and only 60% in 2020. Average India 2022 increment is expected to go up to 9.1% from 8.0% in 2021,” said DTTILLP in a statement on Wednesday. The 2022 projected increment is higher than the pre-covid-19 increment in 2019 by 50 basis points (BPS). “Corporate India reacted differently to each covid-19 wave. In 2020, the pandemic pulled the economy in a recession and lower increments, pay-cuts, and hiring freeze was common,” said Anandorup Ghose, Partner at DTTILLP. “In 2021, increments were higher, pay-cuts were reversed, and covid-19-specific benefits were introduced. However, in 2022, in line with the pick-up inactivity, as well as hiring and attrition, companies have surpassed pre-pandemic levels of increments, with a sharp focus on retention of talent through rewards,” he added.

Bulk Deal data

PRADEEP KUMAR SONTHALIA bought 68,000 shares in Aarti Surfactants Limited at Rs 788.26 per share on the NSE.

PIYUSH KUMAR THUMAR sold 2,49,000 shares in Bright Solar Limited at Rs 5.74 per share on the NSE.

MAHABIR TRADEVENTURES LLP bought 1,86,000 shares of Jalan Transolu. India Ltd at Rs 13.86 per share on NSE.

JASMINE CAPITAL INVESTMENTS PTE. LIMITED sold 184,39,702 shares of Dhani Services Limited at Rs 77.01 per share on NSE.

BEELINE MERCHANT BANKING PRIVATE LIMITED bought 79,035 shares in Megastar Foods Limited at Rs 136.55 per share on the NSE.

NAYNABA DEVENDRASINH CHUDASMA sold 2,26,000 equity shares in Shree Ram Proteins Ltd at Rs 115.56 per share on the NSE, the bulk deals data showed.

HARSHA RAJESHBHAI JHAVERI bought 80,000 equity shares in Vaishali Pharma Limited at Rs 60.50 per share respectively on the NSE.

LALITA JAYKUMAR PATHAREI sold 10,24,480 shares in Vip Clothing Ltd at Rs 23.64 per share on the NSE.

DAMAN ISHWARDAS GUPTA bought 4,05,000 shares in Shalimar Paints Ltd at Rs 134.64 per share on the NSE.

DII and FII data

Foreign institutional investors (FIIs) sold shares worth a net Rs 4,338.94 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 3,061.70 crore in the Indian equity market on March 2, 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 March 3. 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.