Street signs: Nifty at crucial juncture, JSW Infra's port of call, and more

Nifty forms bearish candle with long wick

Since reaching its record closing high of 20,192, the benchmark National Stock Exchange Nifty50 has experienced a decline of 518 points, equating to a 2.6 per cent drop over four consecutive sessions of losses. The index most recently closed at 19,674, a level deemed crucial by technical analysts. “On the weekly charts, the Nifty has formed a long bearish candle, indicating weak sentiment in the near future. However, due to temporary oversold conditions, we could expect a quick pullback rally in the near future. For short-term traders, the 50-day simple moving averages of 19,600 and 19,500 would be the key support zones, while 19,800 and 19,900 could serve as key resistance areas,” remarked Amol Athawale, vice-president of technical research at Kotak Securities.

JSW Infra’s port of call: GMP over 10%

Shares of JSW Infrastructure, a company specialising in port-related infrastructure, have been trading at a premium of between 10 per cent and 15 per cent in the grey market. The company’s Rs 2,800-crore initial public offering, the second-largest of 2023, opened on Monday and is set to close on Wednesday. Already, shares worth Rs 1,260 crore have been allotted to 65 anchor investors at Rs 119 each, valuing JSW Infrastructure at Rs 24,990 crore. It is the second-largest port operator in terms of cargo handling capacity; however, analysts note that the company remains a smaller player compared to its listed peer, Adani Ports and Special Economic Zone, whose installed capacity and cargo handling volumes are nearly four times larger.

BSE: Once bitten, twice shy

In response to a freak trade at the beginning of the month, BSE has taken proactive measures to stave off similar incidents in the future. Effective October 9, stop-loss market (SLM) orders with market conditions will not be permitted in any of its segments. SLM orders, a tool employed by traders to limit excessive losses, are triggered when predefined criteria are met. On September 8, BSE’s equity derivatives segment witnessed unusual trades, with the price of the Sensex call option contract with a strike price of 67,000 skyrocketing nearly 50 times, from Rs 4 to Rs 200. Market participants have noted that SLM orders can lead to erroneous trades, especially in contracts with shallow liquidity. Although discontinuing SLM does not eliminate the possibility of erroneous trades, it introduces an additional safeguard. Sources suggest that BSE is considering further measures to prevent such errors.