A morning walk down Dalal Street | Market teeming with positive sentiment, but consolidation likely in coming sessions.

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The recent measures by the government, including the reduction in the corporate tax rate, the abolition of enhanced tax surcharge and updated norms of FDI and CSR spending, are seen as long-term positives by most foreign brokerages.



Key benchmark indices surged for the second straight session on September 23 as investor risk appetite was rekindled after Finance Minister Nirmala Sitharaman delivered a cut in corporate tax rates which would boost corporate earnings significantly.
Both key indices, Sensex and Nifty jumped over 8 percent in the last two sessions.
Strong gains of the last two sessions have made investors richer by Rs 10.35 lakh crore as the cumulative market capitalization of BSE listed firms jumped to Rs 1,48,89,652.44 crore from Rs 1,38,54,439.41 crore on September 19. On September 23 alone, investors' wealth increased by Rs 3.52 lakh crore.
The recent measures by the government, including the reduction in the corporate tax rate, the abolition of enhanced tax surcharge and updated norms of FDI and CSR spending, are seen as long-term positives by most foreign brokerages.
Morgan Stanley has raised the target for Sensex to 45,000 by June 2020, saying that it sees green shoots in the offing.
Citi has raised March 2020 target for Sensex to 40,500 from 39,000. Goldman Sachs has raised Nifty50 target to 13,000 from 12,500 while JP Morgan has raised Nifty's target to 12,200. Nomura has also raised March 2020 Nifty target to 12,545.
While the market is riding the wave of positivity, analysts state that there is a risk of consolidation as well.
"The Indian market is trading near peak valuations so we would remain cautious on the markets and expect it to consolidate in the near term. However, the recent announcements made by the FM are definitely positive for the Indian economy from a long-term perspective. Hence, investors should focus on accumulating fundamentally sound stocks," said Ajit Mishra, Vice President - Research at Religare Broking.
The Indian rupee erased the day's losses to settle almost flat at 70.93 against the US dollar on September 23.
On the institutional front, foreign institutional investors (FIIs) bought shares worth Rs 2,684.05 crore, while domestic institutional investors (DIIs) too bought Rs 291.95 crore worth of shares in the Indian equity market on September 23, as per provisional data available on the NSE.
Big News: Tax cut gives a new lease of life to banking, financials
Banking and financials emerged as the biggest sectoral gainers in two consecutive sessions ending September 23 as the sector could benefit the most from corporate tax cuts.
"This clearly benefits domestic banks, NBFCs, and rating agencies. Banks in the higher tax bracket, such as HDFC Bank, SBI, Kotak Mahindra Bank, DCB Bank, Federal Bank, and RBL Bank, will gain due to the move," Joindre Capital Services said.
Prabhudas Lilladher retained its overweight rating on NBFC and increased the weight on Bajaj Finance.
"Bajaj Finance is expected to be one of the key beneficiaries of the anticipated demand recovery in the festive season, bountiful monsoons and improving operating leverage. BAF continues to maintain an edge over others owing to less than 2 percent GNPA and 65-70 percent provision coverage ratio across cycles, 40 percent positive ALM gap in short maturity buckets and diversified liability mix," the brokerage explained.
Technical View:
Nifty formed a bullish candle which resembles a Spinning Top kind of pattern on daily charts on September 23 as the difference between opening and closing price was only one-fifth of today's gains.
A spinning top is often regarded as a neutral pattern that suggests indecisiveness in the market. It can be formed in an uptrend as well as a downtrend.
Experts feel the consolidation is likely in coming sessions especially after the solid rally was seen in the previous two consecutive sessions, hence traders are advised to avoid taking fresh longs.
Three levels of Nifty:
Intraday low- 11,471.3 | Intraday high- 11,694.8 | 200-DMA- 11,234
Max Call OI: 11,600, 11,700
Max Put OI: 11,500, 11,400
Stocks in news:
Wipro: The company collaborated with FEBRABAN to develop Loomis, an online platform for the financial services industry in Brazil.
Manappuram Finance: The board of the company has approved raising up to Rs 465 crore via NCDs.
Indosolar: Promoter IDBI Capital has cut stake to 0.88 percent from 2.88 percent.
NCC: Promoter released a pledge on 1 lakh shares (0.02 percent equity) on September 17.
Zensar Technologies: The company has expanded operations in Cape Town, South Africa.
Technical Recommendations:
We spoke to Rajesh Palviya, Head- Technical & Derivatives Research at Axis Securities and here’s what he has to recommend:
Siemens: Buy | LTP: Rs 1,445.10 | Target: Rs 1,490-1,530 | Stop Loss: Rs 1,350
State Bank of India: Buy | LTP: Rs 313.60 | Target: Rs 335-345 | Stop Loss: Rs 295
IGL: Buy | LTP: Rs 354.80 | Target: Rs 385-395 | Stop loss: Rs 335
Source by- Moneycontrol
Professional Advisory For Help And Support- AllianceResearch

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