17,500 to be a Support? - Pre Market Analysis

Here are some of the major updates that could move the markets today:

Stocks

One97 Communications (Paytm) on Sunday denied any link with the merchants that are under the Enforcement Directorate scanner in the Chinese loan app case.

Vodafone Idea has prepaid a short-term loan of about Rs 2,700 crore to SBI in a bid to shore up lenders' confidence as it urgently seeks fresh bank funds to tie up equipment supply deals for 5G networks and also clear some of its near ₹15,000-crore trade payables, comprising dues to tower companies, network gear vendors and other suppliers.

Mahindra Lifespace Developers is targeting a 2.5-fold jump in its annual sales bookings to Rs 2,500 crore in the next three years on better housing demand, its MD and CEO Arvind Subramanian has said.

Petronet LNG will invest Rs 40,000 crore in the next five years for expanding import infrastructure as well as foraying into new business to boost profitability to Rs 10,000 crore. Petronet, which operates two LNG import facilities at Dahej in Gujarat and Kochi in Kerala, is looking to foray into the petrochemicals business, according to the firm's latest annual report.

SpiceJet has received an extension of up to three months for conducting its annual general meeting for the financial year ended March 2022. Now, the Annual General Meeting (AGM) for the last financial year will be held on or before December 31, 2022.

What to Expect? 

NIFTY opened with a small gap-up at 17,603 and had a range-bound day on Friday. Support was taken near 17,500 and the open price acted as resistance. NIFTY closed the day at 17,539, flat.

BANK NIFTY opened flat at 39,433. There was an initial attempt to move higher but selling pressure took the index to 39250 from where a bounce happened to end the day range-bound. BNF closed at 39,421, up by 20 points or 0.3%.

IT dropped by 0.4%.

The US markets closed in the red whereas the European markets shot up.

The Asian markets are trading in the red. The U.S. Futures are trading in the green and European futures are trading lower.

SGX NIFTY is trading at 17,500 indicating a flat opening.

NIFTY has supports at 17,500, 17,470 and 17,400. We can expect resistances at 17,590, 17,620, 17,690 and 17,800.

BANK NIFTY has supports at 39,000, 38,760 and 38,500. Resistances are at 39,670, 40,000 and 40,300.

Foreign Institutional Investors net sold shares worth Rs 8 crores, neutral. Domestic Institutional Investors net sold shares worth 670 crores.

INDIA VIX  is at 19.6.

The US Jobs report said that 315K jobs have been added last month, which is strong, though less than July. But the unemployment rate is at 3.7% against an expected 3.5%. The US markets are on holiday today on account of Labour day.

The European markets had shot up on Friday upon news regarding the resumption of the Russian gas pipeline. However, the latest update is that the pipeline will remain shut. Nord Stream was running at 20% capacity earlier and now, even this will be halted inciting fuel fears in Europe.

FIIs are building short positions in derivatives. This is a serious concern as it was liquidity infusion by FIIs that helped our markets sail across global negativity.

G7 nations are planning a price cap on Russian gas. You know that Russia had a windfall gain when the gas prices shot up. The price cap to be effective, will require the coordination of several nations. Russia in reply said that this will lead to destabilisation of the global market and they will supply oil to those countries which do not support price cap.

Though the Russian pipeline issue may not affect our markets, the price cap issue will affect us as it has a direct correlation with the crude oil prices.

I will be watching 17,500 on the downside and 17,590 on the upside.

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