Index Trend and Stocks in action September 29, 2015

After a truncated week, the Indian Benchmark Indices started the fresh week on a muted note; first half of the trading session was choppy, however, in the second half bear’s dominated and took the Nifty index below important psychological mark of 7800 ahead of RBI policy meet. On the daily chart the index has formed a bearish engulfing candlestick pattern and this pattern indicates that bears are in dominating mood. In the past five trading sessions, this was the second time we have seen this bearish candlestick pattern. Now this indicates that there is not strength in the market and every rise has been used to create a fresh short position and exit longs. Now going forward the all eyes are glued on important economic event of the RBI’s mid quarter policy review and the outcome of the meeting will decide the fate of the market. Technically, the index has resistance around levels of 7840 and next resistance is around levels of 7930. On the downside important support is around levels of 7760 and 7700. The Market participants are expecting a rate cut, however, we feel only if there is a rate cut by 50bps market will see some northward movement and if there is no rate cut we could see high volatility and this could trigger a huge sell-off which is likely to take nifty towards level of 7650 and lower.

ITC and Godfrey Phillips: Graphic health warning on the packages of tobacco products will become larger from 1st April, 2016. An announcement was issued by the Health Ministry saying that all the tobacco products will carry warnings covering 85 per cent of the package area from 1st April, 2016, up from 40 per cent at present.

Nestle: Nestle has ended its contract with the sole third party producer of its Maggi instant noodles, SAJ Food Products, which means the Swiss food giant will no longer outsource production of the popular snack brand that was recently recalled on safety concerns.

Maruti Suzuki: Following a wage hike for its permanent workers last week, the company is planning to do the same for its temporary and contractual employees.

Larsen and Toubro: L&T InfoTech a subsidiary of engineering & construction major L&T has filed draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for initial public offering.