Bears' party continues as Nifty closes weak at 23,450
Welcome to Aftermarket Report, a newsletter where we do a quick daily wrap-up of what happened in the markets—both in India and globally.
Market Overview
Nifty opened higher at 23,605 but quickly began to decline, hitting a low near 23,350 before recovering to the 23,570 range. It then slipped back into the 23,410-23,450 range, eventually closing down 0.33% at 23,453.80.
The broader market sentiment was weak, with 1,100 stocks advancing and 1,732 declining on the NSE. The decline was primarily driven by IT and pharma stocks, following remarks from Fed Chair Jerome Powell indicating that the U.S. economy does not yet signal an urgent need to lower rates.
Meanwhile, metals saw the most gains due to China's export rebate cancellation, while banks, FMCG, and auto stocks provided marginal support to the index.
Note: The above numbers for Commodity futures were taken around 4 pm.
Change in OI for the day
The following is the change in OI for Nifty contracts expiring on 21st November;
The maximum CE OI is at 23500 followed by 23700 and Put OI is at 23000 followed by 23500.
The addition of fresh 38.44 lakh contracts to the 23500 CE, and 33.73 lakh to the 23,700 CE indicates a strong resistance on the higher levels.
Immediate support on the downside can now be seen at 23000 which saw an addition of 28.65 lakh fresh contracts and has the maximum OI for contracts expiring on 21st November.
Please note that we have a trading holiday on Wednesday this week on account of the Maharashtra Assembly elections. Markets may be looking forward to Assembly election results later this week.
Note: This is subject to multiple interpretations but generally, in a falling market if there is an increase in the call OI, it indicates resistance.
Source: Sensibull
Tijori is an investment research platform, and they have constructed niche indices for various themes and sub-sectors. They help you get a sense of the market performance of narrow slices of the market.
What’s happening in India
Metals gained the most in today’s session with stocks like NALCO and Hindalco surging 9% and 4% respectively after China's Ministry of Finance announced on November 15, 2024, that it will cancel export tax rebates for aluminum and copper products, effective December 1, 2024.
This policy change aims to address global concerns about overcapacity and trade imbalances in these sectors. The immediate impact of this decision has been a significant increase in aluminum prices, with futures in London rising sharply following the announcement. - Dive deeper
Following the Indian government's announcement of a 20% cut in the allocation of Administered Price Mechanism (APM) gas to city gas distribution (CGD) companies, shares of CGD companies saw sharp declines, with Indraprastha Gas Ltd. (IGL) falling by up to 20% and Mahanagar Gas Ltd. (MGL) by 14.5%.
Effective from October 16, 2024, the reduction compels these companies to rely on more expensive alternatives like imported liquefied natural gas (LNG), raising operational costs and potentially impacting profitability.
This cost hike is expected to be passed on to consumers, likely leading to an increase of around ₹5 per kilogram for Compressed Natural Gas (CNG), which could reduce its cost advantage over traditional fuels. - Dive deeper
On November 17, 2024, India's domestic aviation sector reached a significant milestone, transporting 505,412 passengers in a single day and surpassing the 5 lakh mark for the first time. This surge in air travel demand was driven by the festive and wedding seasons, resulting in flight occupancy rates exceeding 90%. - Dive deeper
The Consumer Affairs Ministry reported on November 17, 2024, that retail tomato prices have decreased by 22.4% month-on-month due to improved supplies nationwide. As of November 14, the all-India average retail price of tomatoes was ₹52.35 per kilogram, down from ₹67.50 per kilogram on October 14. - Dive deeper
ONGC Green Limited (OGL) and NTPC Green Limited have partnered to form a 50:50 joint venture called ONGC NTPC Green Private Limited (ONGPL). This new venture will focus on developing and acquiring renewable energy projects and assets, including offshore wind projects, to promote clean energy.
It will support both parent companies’ renewable energy goals, explore storage, e-mobility, and ESG-compliant initiatives, and work on carbon and green credits for a low-carbon transition. Additionally, ONGPL may acquire renewable energy assets in India and abroad, adhering to all relevant guidelines and regulations. - Dive deeper
In the first half of the fiscal year 2024-25 (April to September 2024), Real Estate Investment Trusts (REITs) in India distributed a total of ₹2,754 crore to investors, reflecting a 14% year-over-year growth. This increase underscores the expanding role of REITs in India's real estate sector, offering investors consistent returns through rental income from commercial properties. - Dive deeper
Honasa Consumer Limited, the parent company of Mamaearth, experienced a significant decline in its share price, dropping 20% to ₹297.25 on November 18, 2024 primarily due to weak results and growing competition clouding doubts on future growth prospects. This marks the company's most substantial single-day loss since its stock market debut.
What’s happening globally
Federal Reserve Chair Jerome Powell has recently indicated a cautious approach toward reducing interest rates, emphasizing the strength of the U.S. economy and persistent inflation concerns. In a statement on November 14, 2024, Powell remarked, "The economy is not sending any signals that we need to be in a hurry to lower rates." - Dive deeper
Oil prices increased on November 18, 2024, as escalating tensions between Russia and Ukraine added uncertainty to the market. Brent crude futures rose 0.4% to $71.33 per barrel, while U.S. crude futures gained 0.3% to $67.20 per barrel.
Over the weekend, Russia launched its most extensive airstrike on Ukraine in nearly three months, severely impacting Ukraine's power infrastructure. In a significant policy shift, the U.S. authorized Ukraine to use American-made weapons for deep strikes into Russia, intensifying geopolitical risks. - Dive deeper
Management chatter
In this section, we pick out interesting comments made by the management of major companies and policymakers of the Indian Economy.
George Alexander Muthoot, MD of Muthoot Finance on future outlook
The last 2 quarters have seen a cautious approach by regulators on unsecured loans. Seeing a pick-up in gold loans with more regulations on unsecured loans. Gold loan NPA is 4.3% but it's secured against loan. Microfinancing has plateaued in the last 2 quarters, not aggressive on microfinance. Expect to see low to nil growth in microfinance for some time. - Link
Sivaramakrishnan Ganapathi, MD of Gokaldas Exports on potential higher import duties
The U.S. already has high import duties, with tariffs on cotton products ranging from 15% to 20% and on synthetic materials even higher, around 25% to 30%. This means that goods produced in India are subject to these duties when entering the U.S. By contrast, when exporting to Europe, we face an import duty of around 12%.
The import duty regime is generally similar across most countries, meaning we are not at a disadvantage compared to other exporters. If a new policy introduces additional or differential import duties and applies broadly to most or all exporting countries, it would not necessarily place us at a relative disadvantage.
However, higher import duties could raise garment prices for end consumers, potentially causing inflationary effects. Predicting these ripple effects is complex, as it depends on various factors influencing inflation and the timeframe it takes for these changes to manifest. Therefore, these aspects are better analyzed by economists. If there are no unique tariffs disadvantaging India, and if there happens to be a differential tariff between India and China in our favor, then we are not likely to be worse off - Link
Ghazal Alagh, CEO of Mamaearth on earnings and future outlook
Inventory was one reason. The second, we had a certain expectation in terms of how Mamaearth growth will pan out which has not panned out in line. We’re relooking at the investment allocation playbook, and more, to understand how the brand will move from here to what we had originally planned…those are the two main factors that did not go our way, The company is working on solutions that will bring the brand back to its original pace in a few quarters. - Link
Calendars
In the coming days, We have the following major events and corporate actions:
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