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.

Harsha Engineers makes a bumper listing with 36% premium

Harsha Engineers International clocked gains on listing as expected before rising further but most analysts advise booking profits amid market turmoil. The stock started off the first day's trade with a whopping 36 percent premium over issue price despite nervousness in equity markets. It climbed further six percent as the day progressed to take total gains to 43 percent over issue price.

Analysts said high premium at listing is justified with the IPO generating stronger than expected demand as qualified institutional investors' portion got subscribed over 178 times. Also, the ask price is fairly valued compared to industry peers.

"We recommend booking partial profits while remaining can be kept for the long term as the company is a comprehensive solution provider offering diversified suite of precision engineering products across geographies and end-user industries and has long-standing relationships with leading clientele," said Astha Jain, senior research analyst at Hem Securities.

Rajnath Yadav, research analyst at Choice Broking, urged investors to exit given the market volatility. Although Prashanth Tapse, senior vice president of research at Mehta Equities, sounded "very optimistic" on Harsha Engineers with its dominant position, he too advised booking profits in the current market scenario. "Risk takers can hold with a long-term perspective," he added.

Santosh Meena, head of research at Swastika Investmart, termed the company as a proxy play on India becoming a global manufacturing hub: "Those who applied for listing gains can maintain a stop loss at Rs 400. Our recommendation for investors is to hold the allotted shares and long-term investors can accumulate the stock on dips."

Harsha Engineers, which is the largest manufacturer of precision bearing cages in India, raised Rs 755 crore from the public issue with a strong 74.70 times subscription during September 14-16. Of the total issue size, Rs 455 crore was raised through fresh issuance which will be used in repayment of debts, capital expenditure towards the purchase of machinery, and existing production facilities.

Sensex was down 860.62 points or 1.48 percent at 57,238.30, and the Nifty down 285.50 points or 1.65 percent at 17041.80 following weak global cues. This is the fourth straight day of selling on Dalal Street.

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KNR Construction Annual Report Update

 KNR Construction | Annual Report Update: Robust order book places KNRC on a strong footing
-       KNRC witnessed a strong execution in FY22, with revenue growing 21% YoY to INR32.7b, and a healthy EBITDA margin of ~21%. Its order book currently stands at INR93.5b (2.8x FY22 revenue).
-       Around 76% of the order book comprises of Road projects, and the balance consists of Irrigation projects. The order pipeline is decent, with the management expecting INR30-40b of project wins in FY23. It is looking at bidding in other regions within India.
-       Due to the monsoon and delays in receivables from the Irrigation segment, the pace of execution is likely to be slow in the near term. As additional projects move into execution in the later part of FY23, the pace of execution is expected to improve in FY24.
-       We expect margin to remain stable, with a reduction in input costs and execution of some high-margin irrigation projects. We maintain our Buy rating on the stock with a SoTP-based TP of INR310.
The Tata Group has started an exercise to evaluate options to consolidate AirAsia India and Vistara under Air India to bring operational synergies among the three airlines under its umbrella, sources said. Air India, which the group had taken control of in January after winning the bid to acquire the national carrier for Rs 18,000 crore in October last year, has set up a team under its Director of Operations, R S Sandhu, sources familiar with the development said. The team will evaluate synergies in operations between Air India Express and AirAsia India as well as between Air India and Vistara, they said.

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FPIs pump in Rs 8,600-crore in September

 After infusing more than Rs 51,000 crore last month, foreign investors have slowed down the pace of equity buying in India in September so far, as they invested a little over Rs 8,600 crore, on sharp depreciation in rupee. Going forward, Foreign Portfolio Investors (FPIs) are unlikely to buy aggressively amid rising dollar, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
Indication of further rate hike by the US Federal Reserve, fears of a recession, depreciating rupee and continued tensions in Russia and Ukraine will affect FPI flows, Basant Maheshwari, smallcase manager and Co-founder, Basant Maheshwari Wealth Advisers LLP, said. The latest inflow comes following a net investment of Rs 51,200 crore in August and nearly Rs 5,000 crore in July, data with depositories showed.
FPIs turned net buyers in July after nine straight months of net outflows, which started in October last year. Between October 2021 till June 2022, they sold Rs 2.46 lakh crore in the Indian equity markets. According to the data, FPIs have bought equity to the tune of Rs 8,638 crore during September 1-23.
However, FPI activity has turned highly volatile with alternate bouts of buying and selling. They have sold on seven occasions in this month so far. In fact, in the last two trading sessions, they have pulled out Rs 2,500 crore from the Indian equity markets. Vijayakumar has attributed increased FPI selling in recent days to rising dollar and rising bond yields in the US.
In addition, the 75 basis points (bps) rate hike by the US Fed for the third consecutive time to control rising inflation and the surging dollar have impacted FPI buying, Wealth Advisers LLP's Maheshwari said. "The US Fed's hawkish tone on interest rates and the fear of a global recession fuelled pessimism among investors," Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities, said.

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