Trade Setup: Top 15 things to know before market opens on May 9, 2022

Indian market benchmarks had a terrible day of trading on Friday, with leading indexes losing over a half per cent each as traders fretted that aggressive interest rate rises to manage growing inflation might slow global economic development in the future.

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The Nifty50 has formed a small body candle on the daily chart with almost identical opening and closing levels, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

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The 50-scrip index appears to have taken support at 16,350 before some intraday consolidation, he pointed out. “Normally, the formation of a Doji candle after reasonable weakness alerts suggests trend reversal. Confirmation in the form of a sustainable close above 16,500 could open up a bounce in the market,” he added.  

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Indian Indices

The Sensex dropped 866.65 points, or 1.56%, to 54,835.58, while the Nifty slid 271.40 points, or 1.63%, to 16,411.25 in the previous session. The Sensex reached a high of 55,070.12 and a low of 54,586.75, respectively. On the index, six stocks advanced while twenty-four declined. The Nifty traded between 16,340.90 and 16,484.20. On the index, 11 equities advanced while 39 stocks declined.

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Broader Indices

The broader indexes finished in the red, with the BSE Midcap index falling 2.06% and the Small-cap index down 2.10%. The only rising sectoral indexes on the BSE were Utilities, which rose 0.57%, and Power, which rose 0.57%, while Realty fell 3.53%, Metal fell 3.10%, and Basic Materials fell 2.80%, Consumer Durables fell 2.41%, and IT down 2.27%.

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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 4.72% to 21.25 on Friday.

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SGX Nifty

The trends on SGX Nifty indicate a negative opening for the index in India with a 153-points loss. The Nifty futures were trading at 16,235.00 on the Singaporean Exchange around 06:45 hours IST.

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Support and Resistance levels

The key support level for the Nifty is placed at 16,340, followed by 16,269. If the index moves up, the key resistance levels to watch out for are 16,483 and 16,555, according to the pivot chart.

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US Markets

The S&P 500 fell 23.53 points, or 0.6%, to 4,123.34.

The Dow Jones Industrial Average fell 98.60 points, or 0.3%, to 32,899.37.

The Nasdaq fell 173.03 points, or 1.4%, to 12,144.66.

The Russell 2000 index of smaller companies fell 31.58 points, or 1.7%, to 1,839.56.

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Asian Markets

Asian markets finished mixed on Friday. The Nikkei 225 gained 0.69%, while the Hang Seng led the Shanghai Composite lower. They fell 3.81% and 2.16% respectively.

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European Markets

European markets finished sharply lower on Friday with shares in France leading the region. The CAC 40 was down 1.73% while Germany’s DAX was off 1.64% and London’s FTSE 100 was lower by 1.54%.

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Major News Headlines

L&T Infotech, Mindtree announce merger to create large scale IT company

Construction and engineering major Larsen and Toubro (L&T) on May 6 announced the merger of its two software companies, Larsen & Toubro Infotech (LTI) and Mindtree. “The Boards of Directors of LTI and Mindtree at their respective meetings held today approved a composite scheme of amalgamation of both these independently listed IT services companies under the Larsen & Toubro Group,” the press release stated. The merged entity will be known as “LTIMindtree”. The transaction regarding the LTI and Mindtree merger is subject to shareholder and regulatory approvals, said LTI. Upon the merger becoming effective, all shareholders on Mindtree will be issued shares of LTI in the ratio of 73 shares of LTI for every 100 shares of Mindtree. “The new shares of LTI so issued will be traded on the NSE and BSE. Larsen & Toubro Limited will hold 68.73% of LTI after the merger,” said L&T Infotech. Both the companies will continue to operate independently. After the merger, the combined value of the combined entity will be around $3.5 billion.

Tata Power Q4 Results: Profit rises 31% to Rs 632 crore, revenue surges 15%

Tata Power reported a 31.4% year on year (YoY) rise in its consolidated net profit to Rs 632.37 crore in the March 2022 quarter, primarily on the back of higher revenues. The topline growth, other income, and operating performance supported the bottom line. In the March quarter of the fiscal year 2021, it had reported a consolidated net profit of Rs 481.21 crore. Consolidated profit before exceptional items grew by 76% YoY at Rs 775 crore in the March 2022 quarter compared with Rs 440 crore in the same quarter of fiscal 2020-21, the company said in the statement. The consolidated revenue grew 16% to Rs 12,085 crore in the March 2022 quarter from Rs 10,379 crore in the March quarter of fiscal 2021. For the full financial year 2021-22, the consolidated net profit rose to Rs 2,155.61 crore from Rs 1,438.65 crore in the previous financial year. The recommended dividend by the Board is subject to the approval of the shareholders at the upcoming 103rd annual general meeting (AGM) scheduled to be held on July 7, 2022.

Zomato’s Deepinder Goyal to donate Rs 700 crore ESOPs to Future Foundation

Online food delivery giant Zomato’s founder and CEO Deepinder Goyal will donate all his employee stock option plan (ESOP) proceeds worth Rs 700 crore to Zomato Future Foundation, according to an internal letter sent by Goyal to Zomato’s employees. This is one of the various other measures that the food tech company is taking to control the attrition of the delivery executives. “Right before we went public, I was granted some ESOPs by our investors/ board, basis my past performance and some of these ESOPs vested last month because there’s a minimum one-year vesting required as per law,” Goyal said in the letter. “At the average share price over the last month, these ESOPs are worth $90m or Rs 700 crore. I am donating all the proceeds from these ESOPs (net of taxes) towards the Zomato Future Foundation. The ZFF will cover the education of up to two children of all Zomato delivery partners, up to Rs 50,000 per child per annum on actual (above a certain service quality benchmark) who have been on our fleet for more than five years,” he added. Goyal further said that the amount will go up to Rs 1 lakh per child per annum if the delivery partner completes 10 years with Zomato.

Reliance Q4 Results: Profit rises 22% to Rs 16,203 crore, revenue grows 36%

Mukesh Ambani-owned oil to telecom conglomerate Reliance Industries Limited (RIL) reported a 22.5% growth in consolidated net profit at Rs 16,203 crore for the quarter ended March 31, 2022, following strong performance across its energy, telecom and retail segments. The company had posted a net profit of Rs 13,227 crore in the March 2021 quarter. On a sequential basis, the company’s profit declined 12.6% in March 2022 quarter from Rs 18,549 crore in the December 2021 quarter. RIL’s revenue from operations has come in at Rs 2,11,887 crore, up 36% from Rs 1,54,896 crore in the March quarter of the previous financial year. It has become the first Indian company to cross $100 billion in sales revenues. RIL’s EBITDA stood at record Rs 1,25,687 crore ($16.6 billion), up by 28.8% YoY. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. The company board has recommended a dividend of Rs 8 per equity share of Rs 10 each for the financial year ended March 31, 2022.

Bulk Deal data

SATHISH SRINIVAS NAYAK bought 4,97,980 shares in Asian Granito India Limited at Rs 74.52 per share on the NSE.  

AGARWAL RAHUL sold 1,10,717 shares in Nakoda Group of Ind. Limited at Rs 196.40 per share on the NSE.

PREETI JAIN sold 6,83,984 shares in Vaxtex Cotfab Limited at Rs 30.73 per share on the NSE.  

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DII and FII data

Foreign institutional investors (FIIs) sold shares worth a net Rs 5517.08 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 3014.85 crore in the Indian equity market on May 6, as per provisional data available on the NSE.

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NSE F&O Ban

No stock/security has been put under the F&O ban for May 9. 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.