Tag: How to earn profit from intraday trading?

Stock market today: After hitting fresh record highs, Indian stock market benchmarks, the Nifty 50 and the Sensex, closed flat on Monday, July 29, due to profit booking at higher levels as investors continued their strategy of buying cheap and selling at higher prices keeping elevated valuation in mind.

The Nifty 50 almost touched the coveted 25,000 mark as the index hit a fresh record high of 24,999.75 during the session. The 30-share pack Sensex also hit a fresh all-time high of 81,908.43 in intraday trade.

Eventually, the Nifty 50 closed just 1 point higher at 24,836.10, while the Sensex closed 23 points higher at 81,355.84.

Shares of Larsen and Toubro, Reliance Industries, and Mahindra and Mahindra contributed the most to the gains in the Nifty 50 index. On the other hand, shares of HDFC Bank, Bharti Airtel, and ITC ended as the top drags on the index.

“While benchmark indices hit fresh intra-day lifetime highs and the Nifty almost touched the 25k mark, most of the gains were lost, and markets ended off their highs amid profit-taking in IT and telecom stocks. Going ahead, global market direction and corporate earnings will dictate the trend”.

Global peers were largely positive while investors await the policy meeting outcomes of the UD Federal Reserve, Bank of England (BoE), and Bank of Japan (BoJ) this week.

“An ease in the US personal consumption expenditure to 2.5% and the subsequent drop in the US 10-year yield have fuelled optimism that the Fed might cut rates in September, leading to a global rally. However, profit-booking was triggered in the domestic market given trading in the overbought territory and closed flat”.

The US Fed is expected to keep interest rates steady on Wednesday, July 31, but it may hint at a cut at its next policy meeting in September, considering easy inflation and a resilient economy.

BoJ, on the other hand, may increase rates by 10 basis points to 0.2 percent on Wednesday. The BoE may go for a 25 bps rate cut on Thursday, August 1.

“Policy meeting is scheduled for the Fed, BOJ, and BOE this week, and investors are closely monitoring the developments. It is anticipated that the BOE may implement a 25-bps rate cut in response to easing inflation”.

While the benchmarks ended flat, the mid and small-cap segments continued witnessing strong gains. The BSE Midcap index rose 0.80 percent, while the Smallcap index jumped 1.17 percent.

Thanks to the gains in the second-rung indices, the overall market capitalization of the firms listed on the BSE rose to nearly ₹460 lakh crore from nearly ₹457 lakh crore in the previous session, making investors richer by nearly ₹3 lakh crore in a single session.

As many as 404 stocks, including Infosys, NTPC, Sun Pharma, Tata Motors, TCS, and Tech Mahindra, hit their fresh 52-week highs in intraday trade on BSE.

25 stocks ended in the green and the same number of stocks ended in the red in the Nifty 50 index.

Shares of Divi’s Labs (up 2.93 percent), BPCL (up 2.92 percent), and Larsen and Toubro (up 2.58 percent) closed as the top gainers in the Nifty 50 index.

On the flip side, shares of Bharti Airtel (down 2.08 percent), Titan (down 1.95 percent) and Cipla (down 1.40 percent) ended as the top losers in the index.

Most sectoral indices ended with gains. Nifty PSU Bank rose 2.25 percent, followed by the Media (up 1.80 percent) index.

Nifty Realty (up 1.43 percent) and Oil and Gas (up 1.04 percent) also clocked strong gains.

The Nifty Bank index ended 0.22 percent higher, while the Private Bank index climbed 0.28 percent.

The market today found it difficult to hold gains. Shrikant Chouhan, the head of equity research at Kotak Securities, pointed out that the market opened on a positive note, but due to profit booking at higher levels, it failed to sustain above 24,950/81,750 levels.

“From the day’s highest level, the market shed over 200 /750 points. However, the short-term market texture is still on the long side. We are of the view that the intraday market texture is non-directional; hence, buying on intraday correction and selling on rallies would be the ideal strategy for day traders,” said Chouhan.

“For traders now, 24,700-24,650/81,000-80,800 would be the key support areas while 24,950 -25,000/81,750-82,000 would act as crucial resistance areas for the bulls. On the flip side, below 24,650/80,800, the uptrend would be vulnerable,” said Chouhan.

Eqwires Research Analyst

Top-notch SEBI registered research analyst

Best SEBI registered Intraday tips provider

info@eqwires.com

Telegram | Facebook | Instagram

Call: +91 9624421555 / +91 9624461555

www.eqwires.com

Stock to buy on Monday: Borosil Renewables share price has been on an uptrend for the last five sessions. The solar glass stock witnessed strong buying on, before, and before the presentation of Union Budget 2024. In one week, Borosil Renewables shares surged from around ₹469.50 to ₹541 apiece on the NSE, logging a nearly 15 percent rise in this time frame.

According to stock market experts, Borosil Renewables’ share price is looking positive from the fundamental perspective after the Budget 2024. The Government of India has announced the installation of rooftop solar systems on 10 million homes as part of the Pradhan Mantri Suryodaya Yojana. On the technical chart pattern, Borosil Renewables’ share price looks strong and may become further bullish once it gives a fresh breakout at ₹570. So, the solar stock is on the cusp of providing a fresh breakout on the chart pattern.

Triggers for Borosil Renewables share price

Highlighting the fundamental factors that are fueling Borosil Renewables share price, Parth Shah, Research Analyst at StoxBox, said, “Most solar energy-related stocks across the value chain, including Borosil Renewables, have witnessed traction in the last few trading sessions on expectations of improved business performance in future after the government announced a 10% basic customs duty on solar glass imports starting 1 October 2024. The proposed government move would benefit domestic manufacturers by limiting the import of solar glass from other countries. Also, the government’s increased focus on implementing the PM Surya Ghar Muft Bijli Yojana is expected to improve the offtake of solar panels. We believe that the company is poised to benefit in the medium to long term from the sectoral tailwinds along with its focus on improving its capacity and financial performance.”

Echoing StoxBox’s views, Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, said, “The solar industry is experiencing positive momentum as solar installations have grown significantly. Moreover, the government has mandated using only ALMM-certified modules in new projects. This regulation boosts domestic module manufacturing and, consequently, the demand for solar glass. The company is well-positioned to capitalize on this demand.”

“Furthermore, the capacity for producing solar glass has reached 2,300 tons per day, with Borosil Renewables being the world’s largest non-Chinese-owned manufacturer. Demand will be further stimulated by the government’s goal of installing rooftop solar systems on 10 million homes as part of the Pradhan Mantri Suryodaya Yojana. Overall, Borosil Renewables is well-prepared to take advantage of these sectoral tailwinds and growth opportunities,” the Pace 360 expert said.

Breakout stock in making?

Speaking on stocks to buy on Monday, Sumeet Bagadia, Executive Director at Choice Broking, said, “Borosil Renewables’ share price is looking strong on the technical chart. The stock has been on an uptrend on the daily and weekly charts. The scrip may become highly bullish after giving a fresh breakout on the technical chart at ₹570 apiece. So, the stock is expected to remain under the radar of bulls as it is on the cusp of giving a fresh breakout.”

“If the stock breaks out above ₹570, Borosil Renewables’ share price may soon touch ₹600 per share. So, Borosil Renewables shareholders are advised to hold the scrip, maintaining a stop loss at ₹520 apiece. Fresh investors can also buy Borosil Renewables shares for a short-term target of ₹600, maintaining a strict stop loss at ₹520,” Bagadia said.

Eqwires Research Analyst

Top-notch SEBI registered research analyst

Best SEBI registered Intraday tips provider

info@eqwires.com

Telegram | Facebook | Instagram

Call: +91 9624421555 / +91 9624461555

www.eqwires.com

Shares of IDBI Bank crossed the ₹100 mark for the first time in 10 years during today’s intraday session, gaining 7%. This follows the previous session during which the stock surged by 13%. This recent rally has pushed the stock to gain 51% in the current year so far. 

The stock last reached the ₹100 mark in July 2014. It fell to an all-time low of ₹18 in April 2020. However, the stock began its upward trajectory in June 2022 and has since seen a remarkable gain of 226%.

Media reports indicate that the Reserve Bank of India’s (RBI) vetting process to identify potential bidders for the bank is nearing completion. Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), shared this significant update with Moneycontrol, indicating that the privatization efforts are progressing smoothly.

The bank has been slated for privatization for several years. In October 2022, the government invited Expressions of Interest (EoIs) for IDBI Bank, offering to sell a combined 60.72% stake, with 30.48% from the government and 30.24% from LIC, along with transferring management control.

Post-sale, the government and LIC will collectively retain a 34% residual stake in the bank.

Recently, the Reserve Bank of India issued a ‘fit and proper’ report on potential bidders, moving the divestment process forward. This evaluation by the RBI ensures that the bidders meet the necessary criteria to comply with regulations, enabling the privatization process to advance to the next stage, according to media reports.

To qualify, bidders for IDBI Bank must have a minimum net worth of ₹22,500 crore and have reported net profits in three of the last five years.

On the other hand, the bank reported a healthy set of numbers for the June quarter (Q1FY25), with a 40% YoY jump in its standalone net profit to ₹1,719 crore. 

In the same period last year, the bank reported a net profit of ₹1,224 crore. Seeing sequentially, the net profit improved by 5.50% as the bank in Q4FY24 recorded a net profit of ₹1,628 crore.

The bank’s net interest income during the reporting quarter dropped to ₹3,233 from ₹3,998 crore. The net interest margin of the bank came in at 4.18% in Q1, a drop from 5.80% in Q1 FY24.

In Q1-2025, the return on assets (ROA) increased by 34 basis points to 1.83%, compared to 1.49% in Q12024. The cost of deposits rose to 4.58% in Q12025, up from 4.12% in the same quarter of the previous year. Similarly, the cost of funds increased to 4.81% in Q12025, compared to 4.40% in Q12024.

On the asset quality front, the gross non-performing assets (NPA) ratio improved to 3.87% as of June 30, 2024, down from 5.05% a year earlier. The net NPA ratio also showed improvement, decreasing to 0.23% as of June 30, 2024, from 0.44% on June 30, 2023.

Additionally, the provision coverage ratio, including technical write-offs, rose to 99.34% as of June 30, 2024, up from 98.99% a year prior, according to the bank’s earnings filing.

Eqwires Research Analyst

Top-notch SEBI registered research analyst

Best SEBI registered Intraday tips provider

info@eqwires.com

Telegram | Facebook | Instagram

Call: +91 9624421555 / +91 9624461555

www.eqwires.com

Finance Minister Nirmala Sitharaman announced an increase in the securities transaction tax (STT) on futures and options (F&O) in the Union Budget 2024.

Analysts had anticipated this tax hike due to the strong participation of retail investors in the derivatives market. In recent years, derivative trading in India has grown significantly as investors seek quick profits. However, many of these investors face losses due to a lack of understanding of derivative trading.

Despite repeated warnings from SEBI, which has highlighted that 90% of active retail traders lose money in derivative contracts, the popularity of derivative trading continues to rise.

In the Union Budget, the Finance Minister proposed to increase the rates of STT on the sale of an option in securities from 0.0625% to 0.1% of the option premium and on the sale of a futures in securities from 0.0125% to 0.02% of the price at which such futures are traded.

Earlier in May, Nirmala Sitharaman and Chief Economic Advisor V. Anantha Nageswaran sounded caution about growing retail participation in the equity futures and options market.

The Economic Survey 2024, which was released a day before the budget, noted the increasing interest of these investors in derivative trading.

“Derivatives trading holds the potential for outsized gains. Thus, it caters to humans’ gambling instincts and can augment income if profitable. These considerations are likely driving active retail participation in derivatives trading,” the survey said.

The survey emphasizes the need for increased investor education and ongoing financial literacy to alert individuals about the potential for low or negative returns from derivatives trading.

“A significant stock correction could see losses that are more considerable for retail investors participating in capital markets through derivatives. Investors’ behavioral response would be to feel ‘cheated’ by unseen more considerable forces. They may not return to capital markets for a long time. That is a loss to them and the economy,” the survey noted. 

How big is the Indian derivatives market?

Derivative trading in India has gained significant momentum post-COVID-19 pandemic, attracting retail investors who view it as a quick way to earn returns on their capital.

This surge has propelled Indian equity derivatives volumes to the highest in the world. According to recent data, the monthly turnover in the F&O segment reached ₹8,740 lakh crore in March 2024, a sharp increase from ₹217 lakh crore in March 2019.

Simultaneously, the average daily turnover in the equity cash segment was ₹1 lakh crore, while the F&O segment saw an average daily turnover of approximately ₹330 lakh crore.

RBI and SEBI raise concerns

Last week, Reserve Bank of India (RBI) Governor Shaktikanta Das expressed concerns about the widening gap between credit and deposit growth, noting a shift in household savings away from traditional deposit accounts.

Estimates suggest that a significant portion of stock market investments are now shifting towards derivative trading, raising alarms within the government.

At an asset management committee event last week, the SEBI Chairperson highlighted the substantial losses incurred by an increasing number of young investors involved in derivatives in recent years.

“It has now reached a scale where we believe that the micro-objective of protecting the individual investor has changed and morphed to thinking about the macro issue. Is this what our market is designed to do – facilitate a lot of speculative transactions?” she questioned.

From hedging tools to speculative investment

Derivatives were originally designed as hedging instruments to help investors minimize potential losses by entering into contracts such as futures and options. They were first introduced to protect farmers from crop losses and were later extended to stocks, currencies, and bonds.

However, derivatives are now widely used as speculative tools globally. Investors aim to generate substantial profits with a relatively small capital investment compared to stocks. This lower initial investment in futures and options has particularly attracted many young investors to trading.

Will there be a shift towards long-term investing?

Commenting on the recent developments, Vipul Bhowar, Senior Director, Listed Investments, Waterfield Advisors, said, “The decision to raise taxes comes amid a dramatic increase in derivative trading volumes, which have grown significantly since 2020.”

“Retail investor participation in the derivatives market has surged from 2% in 2018 to 41% in 2023. Regulators have expressed concerns that this surge in trading is leading to speculative behavior that could be detrimental to individual investors and the broader economy.”

Vipul Bhowar said that the change in tax policy should encourage retail investors to shift their focus from speculative trading to long-term investments. This shift could potentially reshape market dynamics in the near term, leading to a more stable and sustainable market environment.

“The government’s tax adjustments demonstrate a proactive approach to managing the risks associated with the rapid growth of retail participation in the derivatives market. The aim is to foster a more stable trading environment. The increase in taxes may have a significant impact on trading volumes, potentially affecting market liquidity and dynamics. High-frequency trading firms, which operate on narrow margins, are particularly sensitive to changes in transaction costs, and this sensitivity could lead to significant changes in the market landscape,” he noted.

Eqwires Research Analyst

Top-notch SEBI registered research analyst

Best SEBI registered Intraday tips provider

info@eqwires.com

Telegram | Facebook | Instagram

Call: +91 9624421555 / +91 9624461555

www.eqwires.com

Budget 2024: ITC share price soared by more than 5% on Tuesday after Finance Minister (FM) Nirmala Sitharaman announced no changes to tobacco taxation in her budget address, providing comfort to businesses like ITC, which rely heavily on cigarettes for income. The rates remained unchanged following a 16% hike in National Calamity Contingent Duty (NCCD) last year. ITC was among the top performers on the benchmark indices, Nifty 50 and Sensex.

ITC’s share price today opened at ₹467.05 apiece on the BSE. The stock touched an intraday high of ₹489.80 apiece and hit an intraday low of ₹466.55. Nifty FMCG gained 2.7%, with ITC at the top of the index.

According to Ruchit Jain of 5paisa, the ITC share price has recently seen an up-move with good volumes, which is a positive sign. The immediate support for the stock is placed around 460.

Jain added that the broader trend for the FMCG index is positive, and stocks from this sector have been witnessing good price-volume action. We expect a relative outperformance from FMCG stocks in the near term.

Another advantage for ITC is the expected revival in rural demand, which would benefit the company’s non-tobacco businesses, such as FMCG and Agri. The Finance Minister boosted the Union Budget’s rural allocation by 12%.

Furthermore, T Manish, Research Analyst at SAMCO Securities, stated that the revised tax rates and higher standard deduction help FMCG firms.

Manish added that FM announced higher tax rates under the New Tax Regime, in addition to the mentioned slab modifications, and increased the standard deduction from 50,000 to 75,000 for those opting for the New Tax Regime. This will result in net tax savings of roughly Rs. 17500 for individuals. This will immediately benefit corporations in the FMCG market, including HUL, ITC, Dabur, and Nestle.

Eqwires Research Analyst

Top-notch SEBI registered research analyst

Best SEBI registered Intraday tips provider

info@eqwires.com

Telegram | Facebook | Instagram

Call: +91 9624421555 / +91 9624461555

www.eqwires.com