Fed Announces 75 Basis Points Hike! Sgx Nifty Trading Higher - Share Market Today


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


Promoter entities Peterhouse Investments Ltd and PACs have sold 63,000 equity shares in Usha Martin via open market transactions on June 14 and June 16. With this, their shareholding in the company stands reduced to 1.91 percent, down from 1.94 percent earlier.

Nalanda India Equity Fund bought 6.55 lakh equity shares in Jyothy Labs via open market transactions on June 14. With this, its shareholding in the company stands increased to 5.06 percent, up from 4.88 percent earlier.

Indian Overseas Bank said the board has approved the capital plan for FY23. The bank will raise up to Rs 1,000 crore by issuing equity shares and another Rs 1,000 crore by issuing bonds, in FY23.

HDFC Mutual Fund through its several funds acquired 50,000 equity shares in Voltamp Transformers via open market transactions on June 14. With this, its shareholding in the company increased to 5.25 percent, up from 4.91 percent earlier.

UPL through its subsidiary USCL has acquired Kudos Chemie for Rs 40 crore, and is required to invest Rs 237 crore in Kudos over a period of 2 years as per the resolution plan approved by NCLT. Kudos manufactures speciality chemicals used as beverage and pharmaceutical ingredients and has a manufacturing facility near Chandigarh.

What to Expect? 

NIFTY opened flat at 15,749 and was in a downtrend for a while before a ‘W’ breakout helped NIFTY reach 15,780. Selling pressure took NIFTY to the day-low and NIFTY closed at 15,692, down by 40 points or 0.25%.

BANK NIFTY opened flat at 33,359 and continued the trend of yesterday’s second half. There was a sell-off from 33,550 BNF closed at 33,339, up by 27 points or 0.08%.

IT moved down by 0.5%.

The US markets closed 1% in the green. The European markets also moved up yesterday.

The Asian markets are trading higher with NIKKEI 1.4% in the green. The U.S. Futures and the European futures are trading higher.

SGX NIFTY is trading at 15,792 indicating a gap-up opening.

NIFTY has supports at 15,670, 15,630 and 15,570. We can expect resistances at 15,730, 15,780 and 15,850.

BANK NIFTY has supports at 33,230, 33,120 and 33,000. Resistances are at 33,450, 33,510 and 33,600.

NIFTY has the highest call OI build-up at 16,000 followed by 16,200. The highest put OI build-up is at 15,500 followed by 15,600.

BANK NIFTY has the highest call OI build-up at 35,000 and the largest put OI build-up is at 33,000. This is just next to ATM.

INDIA VIX is at 21.9.

Foreign Institutional Investors net sold shares worth Rs 3,500 crores. Domestic Institutional Investors net bought shares worth Rs 2,600 crores. 

Fed has announced a 75 basis points hike. This was expected but was considered to be negative for the markets with the hope that a 50 basis points hike would move the markets higher. However, the markets moved higher though there was an initial down-move just after the hike was announced. Remember that this need not be the real reaction to the Fed. The actual reaction always comes the following day. Let us watch how the US markets move tonight.

Along with the 75 basis points hike, Fed also increased the inflation projection to 5.2% from 3.7% for 2022. Also, it will take much longer for the inflation rate to be within the normal range. Fed projected slower economic growth contradicting their own justification for the rate hike; which is higher GDP growth in the last quarter. The retail sales in May dropped for the first time this year and all the ingredients are perfect for recession. So, what we can understand from the Fed event yesterday is that the Fed is willing to risk recession for bringing inflation down. We can expect a 50 bps or 75 bps hike in the next meeting as well.

Though we may see an up-move in the morning, beware of FII selling! FIIs have been selling consistently and there has been a large candle towards the end on previous days due to heavy institutional activity.

I was surprised to see the huge put OI build-up at 33,000 which is just near the spot. There could also have been put long there, expecting a fall. 

I hope you remember the ATM straddle premium last week. It was 130. It has been between 120 and 150 for some weeks. Guess the sum this week? It is 250! That was the magnitude of uncertainty ahead of the Fed event. We will see an IV crush today.

I will be closely watching 15,690 on the downside and 15,800 on the upside.

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