Post Market views - Sep 28, 2021 - Mr. Binod Modi, Head Strategy at Reliance Securities

Our domestic markets opened flat to negative as US stocks ended mostly lower, weighed down by weakness in tech, while government bond yields rose to the highest level in nearly three months after durable goods orders topped forecasts. Nasdaq Composite slipped half percent while Dow Jones Index gained 0.2%. The 10-year US Treasury yield climbed 3 basis points to 1.49%, the highest since June. Oil held steady after a five-day surge on signs that demand is running ahead of supply, depleting inventories amid a global energy crunch. Brent Crude is hovering nearly $80/bbl.

NIFTY50 traded volatile with rollover moves ahead of the monthly derivatives expiry, as the broader markets slump on profit selling and the breadth turned negative. High Beta sectors like Realty and Media declined by 2% average after a sharp outperformance in the last few days. Tech sector has also declined by 5% while Energy has balanced the up move to gain on the back of positive news flow. The NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 2.42% to 18.49.

Coal Shortage Deepens in India Amid Plunging Plant Inventories. Massive fleet of coal plants are running dangerously low on stockpiles, which may force the nation to buy expensive shipments of the fuel or else risk blackouts which could be positive for Coal India as expected price increase on e-auction. Most of the energy and energy related stocks like Coal India, NTPC, Power Grid, REC, PFC, BHEL, JSW Energy, NLC India gained 3-6% amid hefty volume today on account increased oil price and shortage of coal inventory.

NIFTY50 has recovered its partial loss from the support of 17,600 and closed down 106 points lower. We believe improved advance tax payment by corporates, strong economic recovery, sustained growth prospects and local fund buying interest will be positive for the market sentiment. Expects stocks specific action in the market and traders buy on decline strategy ahead of Thursday September series F&O expiry. The Nifty option chain for 30 September 2021 expiry showed maximum Call OI of 89.4 lakh contracts at the 18,000 strike price. Maximum Put OI of 59 lakh contracts was seen at 17,000 strike price.

Source : Equity Bulls

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