Nifty 17026.45 (-2.91%)
Sensex 57107.15 (-2.87%)
Nifty Bank 36025.5 (-3.58%)
Nifty IT 34606.1 (-1.97%)
Nifty Financial Services 17614.7 (-3.56%)
Adani Ports 717.15 (-5.94%)
Asian Paints 3143.10 (-0.04%)
Axis Bank 661.75 (-2.67%)
B P C L 376.85 (-5.81%)
Bajaj Auto 3334.60 (-1.68%)
Bajaj Finance 6807.05 (-4.47%)
Bajaj Finserv 16682.55 (-3.95%)
Bharti Airtel 738.75 (-3.45%)
Britannia Inds. 3555.30 (-0.51%)
Cipla 966.70 (7.42%)
Coal India 155.90 (-1.67%)
Divis Lab. 4937.80 (2.88%)
Dr Reddys Labs 4750.90 (3.47%)
Eicher Motors 2433.90 (-3.43%)
Grasim Inds 1690.10 (-4.34%)
H D F C 2741.70 (-4.40%)
HCL Technologies 1110.05 (-1.31%)
HDFC Bank 1489.90 (-2.36%)
HDFC Life Insur. 670.65 (-2.64%)
Hero Motocorp 2529.40 (-2.52%)
Hind. Unilever 2335.10 (-0.59%)
Hindalco Inds. 417.00 (-6.72%)
I O C L 120.95 (-3.74%)
ICICI Bank 722.20 (-3.84%)
IndusInd Bank 901.80 (-5.99%)
Infosys 1691.65 (-1.79%)
ITC 224.00 (-3.16%)
JSW Steel 628.65 (-7.67%)
Kotak Mah. Bank 1964.30 (-3.48%)
Larsen & Toubro 1778.15 (-3.88%)
M & M 853.75 (-4.20%)
Maruti Suzuki 7170.50 (-5.31%)
Nestle India 19222.25 (0.23%)
NTPC 128.85 (-4.70%)
O N G C 147.10 (-5.16%)
Power Grid Corpn 202.00 (-1.10%)
Reliance Industr 2412.60 (-3.22%)
SBI Life Insuran 1130.35 (-2.51%)
Shree Cement 25945.80 (-2.72%)
St Bk of India 470.50 (-4.09%)
Sun Pharma.Inds. 767.30 (-1.99%)
Tata Consumer 766.70 (-5.09%)
Tata Motors 460.20 (-6.61%)
Tata Steel 1112.30 (-5.23%)
TCS 3446.85 (0.03%)
Tech Mahindra 1527.40 (-2.05%)
Titan Company 2292.30 (-4.40%)
UltraTech Cem. 7394.75 (-2.81%)
UPL 703.80 (-3.23%)
Wipro 621.45 (-2.40%)

Monetary policy normalization in progress

20/10/2021

Overall monetary policy was in line expecting no change in repo rate which is at 4%, and accommodative stance unchanged. RBI has reduced its inflation forecast to 5.3% for FY22 which was 5.7% earlier and expects it to be even lower for Q2 & Q3 of FY22. The inflationary expectations for 3 months as well as 1 year ahead have also fallen. RBI kept the FY22 GDP growth forecast unchanged at 9.5%, with Q2 and Q3 GDP growth numbers being revised up, focusing optimism about investment and consumer sentiment revival. The RBI has begun its gradual liquidity normalization process by the temporary stoppage of the G-Sap -2.0 program with the end of on-tap TLTRO liquidity the scheme by Dec21and reducing surplus liquidity by ~INR 6trn till Dec using VRRR and may keep surplus liquidity at ~INR 2-3trn. On the other hand, the 
US Fed is likely to delay their asset tapering announcement to Dec21 from the earlier anticipated Nov21with consecutive non-farm payroll data for the past 2 months averaging ~ 280k. This may give the RBI more space to adjust the system liquidity and push up the lower end of the yield curve by a) Increasing the reverse repo rate by 40 bps in FY22 to normalize the monetary policy corridor to 25bps; and b) 14-day VRRR auctions (and a possible 28-day VRRR later). Given the lower inflation trajectory for FY22, we 
expect the repo rate to be increased only in 1QFY23 as growth is likely to normalize and be broad-based by then. 

Business confidence improves steadily and reaches the highest since 2009 


RBI's business assessment index improved from 89.7 in 1Q to 116.7 in 2Q. This is higher than the pre-Covid level and achieved an LTA of 108 which is the highest since the start of the index in 2009. The expectations index has improved from 124.1 in 2Q to 135.7 in 3Q. This is also significantly higher than providing an LTA of 116 and the highest level since the start of the index in 2009. RBI's current consumer base has also improved from 48.6 in Jul21 to 57.7 in Sep21. But this is significantly lower than LTA of 9). The future expectations have improved from 104 to 107 during the same time when compared to the LTA of 116. The improved sentiments are in sync with the pickup in high-frequency indicators like railway freight traffic, cement production, electricity demand, e-way bills, and GST collection. 

GFCF likely to revive, robust export growth, resilient agriculture 

The FY22 GDP growth forecast is constant at 9.5%, Q2FY22 growth increased by 60 bps to 7.9%, and also the Q3FY22 GDP increased by 50 bps to 6.8%. RBI expects a CAPEX recovery cycle in semi-annual monetary policy statements due to the following reasons. Improvement in the interest coverage ratio of manufacturing units, PLI nurturing private investment, mega schemes like National Infrastructure Plan & National Monetization Plan to increase infrastructure spending; and Central governments assistance to remain robust likely to reach $400bn in FY22 as the mobility restrictions subside, export of labor-intensive sectors (apparel, leather products, tea) is likely to rise. In the agricultural sector, the Kharif foodgrain production in FY22 grew by 0.6% which was helped by good monsoon rainfall and increased MSP prices. Rabi production is likely to grow as reservoir levels are currently at 80% of the full reservoir level.GDP growth for FY22 and FY23 is likely to be at 9.8% and 9.4%, respectively. In Q2FY22 and Q3FY22 the economy is likely to grow by 6.7% and 7.7%, respectively. The downside risks to growth are supply constraints semiconductor and coal shortage, high cost of raw materials, uncertainty around COVID. 

RBI’s steps for Liquidity Normalisation 

The liquidity normalization process had started in Aug21. This was further scaled up in the Oct21 monetary policy meeting with the announcement of the fortnightly calendar for the 14-day VRRR auctions till the 1st week of Dec21. Apart from this the RBI also temporarily halted the G-Sap -2.0 program and announced the end of the On-tap TLTRO liquidity scheme by Dec21. All these measures may reduce the surplus liquidity in the system by ~INR 6trillion till Dec along with maintaining surplus liquidity at ~INR 2-3trillion. The RBI also proposed an introduction of the 28-day VRRR in the future. Starting with a short tenure (14-day VRRR) and moving forward with instruments with longer tenure will push up the cost of liquidity gradually. The RBI reiterated that policy normalization will be a gradual process based on evolving domestic conditions. It does not make any drastic change immediately as the situation is under control. 

Repo rates to hike in early Q1FY23 

From the policy stance and commentary which is provided later, it is clear that growth remains the top priority of the RBI at the present juncture. RBI is following the best practices of the other economies step-by-step with stoppage of measures like Quantitative Easing by halting G-SAP 2 temporarily, by normalization of liquidity (RBI auction of VRRR), and finally by normalization of policies. We expect a delay in the US Fed asset tapering announcement to Dec21 which has been anticipated in Nov21 due to low non-farm payroll data for the past 2 months averaging 280k, which will give the RBI more headroom to adjust the system liquidity before normalizing the policy rates. An increase in the reverse repo rate by 40 bps in FY22 to normalize the monetary policy corridor to 25bps is expected. Any hike in the repo rate is only likely in early 1QFY23 as growth is likely to normalize and be broad-based by 1QFY23.

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Penny Stock Update: These Penny Stocks gained up to 14.29% on Wednesday.

Penny Stock Update: These Penny Stocks gained up to 14.29% on Wednesday.
by 5paisa Research Team 20/10/2021

On Wednesday, market closed in red for the second day in a row, the BSE Telecom is the top gainer while Consumer Durable is the top loser.

After a negative closing on Tuesday (19th October 2021), the market continued to close deep down in red in today's trade as well. Today all the indices were down except one sectoral index which closed with a green mark. Nifty 50 continues to fall and was down 152.15 points i.e., 0.83%. Besides, BSE SENSEX also continued the downward trend, which is down by 456.09 points i.e., 0.74%. Stocks that dragged the Nifty 50 down are Reliance, Bajaj Finserv, Infosys, HDFC Bank and Titan Company. Reliance has pulled the Nifty 50 Index by almost 30 points and closed at Rs 2700.40, and other stocks also pulled down the index in double digits. Moreover, stocks dragging the SENSEX were Reliance, Infosys, HDFC Bank, Titan Company and Bajaj Finserv.

BSE Telecom is the only sectoral index that closed positive in today’s trade. Telecom stocks such as Idea, Bharti Airtel, Sterlite Technologies and Indus Towers closed in green. Idea and Bharti Airtel closed up by 6.40% at Rs 10.70 and 4.03% at Rs 708.45 respectively.

BSE Consumer Durables, SME IPO, CPSE and S&P BSE IPO are top losers in today’s trade. Consumer Durables tripped down by 3.36%. Consumer Durables stocks such as Dixon Technologies, Titan, VIP Industries were top losers pulling the index down in today’s trade. Dixon Technology is down by 8.77% at Rs 5214.30. The SME IPO is trading in red since Monday, today it is down by 3.15%.

Here is the list of penny stock that gained up to 15% on a closing basis on Wednesday 20th October 2021:

Sr No.  

Stock  

LTP   

Price Gain%  

1.  

Raj Rayon Industries Ltd  

0.4  

14.29  

2.  

Zenith Steel Pipes & Industries Ltd  

0.95  

5.56  

3.  

Gayatri Highways Ltd  

1  

5.26  

4.  

Eurotex Industries And Exports Ltd  

14.70  

5.00  

5.  

Digjam Ltd  

19  

4.97  

6.  

Hotel Rugby Ltd

3.20  

4.92  

7.  

Parenteral Drugs (India) Ltd  

3.20  

4.92  

8.  

Dish TV India Ltd

18.15  

4.91  

9.  

Rohit Ferro-Tech Ltd

12.85  

4.90  

10.  

Standard Industries Ltd

16.15  

4.87  

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Chart Busters: Top trading set-ups to watch out for Thursday.

Chart Busters: Top trading set-ups to watch out for Thursday.
by 5paisa Research Team 21/10/2021

The benchmark index, Nifty has continued its downward journey on Wednesday as well. The index has lost 152 points or 0.83% and it has slipped below the 18300 mark. In the last two trading sessions, the Nifty index has lost nearly 2%. While Nifty Midcap 100 and Nifty Smallcap 100 has lost over 5% in the last two trading sessions. For the second consecutive trading session, the overall advance-decline was largely tilted in the favour of the decliners. The India VIX has surged by over 5%.

Here are the top trading set-ups to watch out for Thursday.

Indian Bank: The stock has given a breakout of Ascending triangle pattern as of October 12, 2021, and thereafter the stock has surged by over 12% in just four trading sessions. After registering the high of Rs 174.80, the stock has witnessed correction from higher levels as selling pressure emerged in the market. On Wednesday, the stock has taken support near the breakout point and recovered almost 6.44% from the day's low. The price action formed a hammer candle on the daily chart. The formation of the hammer pattern happens near the support zone, which indicates further bullish momentum in the stock. Currently, the stock is trading above its short and long-term moving averages. These averages are in a rising trajectory, which is a bullish sign. The momentum indicators and oscillators are also supporting the overall bullish structure. The leading indicator, RSI is in bullish territory. The daily MACD stays bullish as it is trading above its zero line and signal line. The MACD histogram is suggesting a pickup in upward momentum. Going ahead, the retesting of the breakout level gives an opportunity to build a fresh long position. On the downside, today's low of Rs 153.55 will act as strong support for the stock. While on the upside, the prior swing high of Rs 174.80 will act as minor resistance for the stock.

Polycab India: On Wednesday, the stock has given a neckline breakdown of Adam and Adam double top pattern. This breakdown was supported by above 50-days average volume. Additionally, the stock has formed three black crows candlestick pattern. The three black crows candlestick pattern is a bearish reversal candlestick pattern. This pattern occurs when bears overtake the bulls during three consecutive trading sessions. Currently, the stock is trading below its 20-day EMA. The 20-day EMA has started edging lower and the rising angle of 50-day EMA is slowed down considerably. Recently, the price has made a parallel high, but most of the indicators, including the RSI, have not reached the prior highs. The CCI has also supported the same phenomenon. This indicates limited upside. The fast stochastic is trading below its slow stochastic line. Technically, all the factors are currently aligned in support of the bears. Hence, we would advise the traders to be with a bearish bias. In case, the stock sustains below its 50-day EMA then it may touch the level of Rs 2229, followed by Rs 2130 level. On the upside, the 20-day EMA will act as crucial resistance for the stock.

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These small-cap stocks made a fresh 52-week high on Wednesday.

These small-cap stocks made a fresh 52-week high on Wednesday.
by 5paisa Research Team 21/10/2021

Some of the small-cap stocks made a fresh 52-week high for themselves, indicating relative strength when the overall market traded weakly.

The BSE smallcap index on Wednesday tumbled by more than 2% on the closing basis. Deepak Nitrate, Aarti Industries, IEX, Dixon Technologies and Navin Fluorine put together contributed the most to the BSE smallcap index losses.

The chemical sector stocks featured amongst the top losers in Wednesday's trading session. Speculators and investors started to doubt the quality of earnings of the so-called high growth chemical sector companies. The results of Navin Fluorine were disappointing and that led to investors discounting poor earnings for the rest of the chemical pack including Deepak Nitrate, which led to a frenzied sell-off in the counter- pushing the stocks down by more than 11% in a single session.

Deepak Nitrate single-handedly contributed to almost 40 points losses for the BSE smallcap index which slipped by more than 683 points on Wednesday.

While the advance-decline ratio was in favour of the declines with as many as 2428 stocks declining versus 887 stocks advancing, there were at least 178 stocks that made a fresh 52 week high in Wednesday's trading session. As many as 29 stocks made a fresh 52-week low in Wednesday's trading session. We find that at least 201 stocks hit the upper circuit on October 20, while at least 289 stocks hit the lower circuit.

Here is the list of some of the trending small-cap stocks that made a fresh 52-week high in Wednesday's trading session where the broader markets tanked more than the frontline indices:

Sr No   

Stock Name   

LTP   

Price Gain (%)   

1  

Transport Corporation of India   

561.15  

17.78  

2  

Paras Defence and Space Technologies   

990.4  

10  

3  

AMD Industries   

39.4  

8.09  

4  

Sangam (India)   

244.95  

4.99  

5  

CG Power   

136.85  

4.99  

6  

Bombay Metrics Supply Chain   

131.6  

4.99  

7  

Bodhi Tree Multimedia   

128.6  

4.98  

8  

Digjam   

19  

4.97  

9  

Jindal Poly Investments  

144.65  

4.97  

10  

DB Realty   

44.5  

4.95  

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Multibagger Update: CG Power locked in the Upper Circuit, makes a fresh record high on Wednesday, October 20!

Multibagger Update: CG Power locked in the Upper Circuit, makes a fresh record high on Wednesday, October 20!
by 5paisa Research Team 21/10/2021

CG Power is one of the top multibagger stocks that has multiplied investors wealth several times in the past year.

The shares of CG Power were seen locked in the upper circuit on Wednesday even as the broader market saw a deep correction of over 2% and BSE Sensex corrected by more than 400 points.

CG Power is due to announce its Q2FY22 results today, October 21. The stocks saw an impressive price volume breakout in Wednesday's trading session when the market was clearly in the bear grip.

CG power has been one of the top-performing multibagger stocks of 2021. In fact, it is one of the most promising stories of a turnaround we have witnessed in the past one year.

The share price of CG Power is up by over 446% in the past year. In 2021 alone the stock price of CG Power is higher by 206.49%.

The share price of the company closed higher by 4.99% to lock itself in the upper circuit on Wednesday, to close at Rs 136.85 per share.

The shares of CG Power have been trending recently also due to the company signing a pact with Evie Real Estate to sell Kanjurmarg property for Rs 382 crore. As per the reports, the transaction is slated to be completed before March 31, 2022. As per the term sheet signed by the company it is expected to receive Rs 382 crore in addition to repayment of Rs 20 crore of deposit under dispute. The binding term sheet was signed on October 16.

In the past week alone, the stock is up by more than 17%. In one month, the stock has gained by more than 41%.

CG Power and Industrial Solutions Limited, previously known as Crompton Greaves Limited, is an Indian multinational company engaged in the design, manufacturing, and marketing of products related to power generation, transmission, and distribution. It is based in Mumbai and is a part of the Murugappa Group.

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Telecom Services on the growth track

by 5paisa Research Team 21/10/2021

Introduction of segmented tariff hikes introduced by Bharti would help in rise in revenue with steady margin whereas Jio's growth will be led by continued subscriber growth in 2Q.Bharti Airtel/Reliance Jio's mobile revenue growth to pick up QoQ to 5-7%.Subscriber and ARPU trends for Bharti and Jio may go inversely to each other. This is because Bharti achieve sharp ARPU increase with subscriber declines whereas Jio experience strong subscriber additions with steady ARPUs. Although margins may remain steady.
Indus may come up with profit growth due to margin expansion and higher exit penalties. Indian mobile revenues to grow in 2QFY22 due tariff hikes in the prepaid voice and corporate postpaid segments that were effective from August.subscribers may decline as there is a rise in minimum tariffs in prepaid voice segment. India mobile margins are likely to be up due to revenue growth. 

Subscribers inflow to Reliance Jio

According to Jeffreys Reliance Jio would report a revenue growth. subscribers additions would happen due to JioPhone. But ARPUs are likely to rise due to extra day in 2Q. So Profits are likely to rise.Importangs things to watch are the duration and the dates for further tariff hikes. 

Bharti with a positive outlook

Although Govt's recent moves favours the chances of Vodafone Idea's survival, it may not be able to to shift the market share from Vodafone Idea towards Bharti Airtel and Reliance Jio. This along with Bharti's hikes in July should keep revenue growth strong over the near to medium term. According to Jeffreys Bharti Airtel's market share may rise by 340bps to 39% in FY22-24, , driving a CAGR of 16/20% in its India mobile revenues and EBITDA.

Indus Towers to move along steady throughout the quarter

 Core rental revenues are expected to grow due to tenancy growth along with this EBITDA margins also may increase 200bps YoY resulting in 11% YoY growth in EBITDA. Profit also may increase by 21% YoY due to higher exit penalties when compared to that of 2QFY21. Tenancy growth and scale up of alternative revenue streams must be closely watched.

Conclusion

Telecom industry is gaining the momentum in India.It would be a great idea to invest in these stocks with thorough research and due diligations so that we can make our investment decisions wisely.

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