Government reduces windfall tax on crude, diesel, ATF-Daily Market Update- Equity 18 Oct 2023 | Globe Capital Market LTD.
Government reduces windfall tax on crude, diesel, ATF-Daily Market Update- Equity 18 Oct 2023

The Ministry of Finance has reduced the windfall tax on domestically produced crude, diesel and aviation turbine fuel. The windfall tax on crude oil will be decreased from Rs 12,100 per tonne to Rs 9,050 per tonne, according to a gazette notification issued on Tuesday. The export tax on petrol remains nil. The new tax rates will take effect on Oct. 18, the notification said. India first imposed windfall profit taxes on July 1 last year, joining a growing number of nations that tax the supernormal profits of energy companies.

Overview and Outlook

Global Stock Market Today

  • US equity markets ended on flat to negative note.
  • European markets  ended on a positive note.
  • Asian equity markets are also trading in red.
  • GIFT Nifty is little changed (as on 8:30AM), Nifty futures likely to open around 19792 levels.


News highlights from across the globe

  • Asian markets opened mixed after U.S. equities struggled following data reinforcing the case for the Federal Reserve to keep interest rates higher for longer. Oil climbed as the Israel-Hamas conflict intensified.
  • The S&P 500 erased gains on Tuesday, with Nvidia Corp. leading a slump in technology stocks as the U.S. restricts the sale of chips the company designed for the Chinese market.
  • Brent crude was trading at $91 a barrel and the yield on the 10-year US bond was trading at 4.83%.


Important news updates from the domestic front

  • HPCL updated on collaboration with Petromin Corp., Saudi Arabia, who will be setting up 1000 Petromin Express Stations (Quick Service Vehicle Care) at HPCL retail outlets across India in 5 years.
  • ICICI Bank, Kotak Mahindra Bank: The RBI imposed a penalty of Rs 12.19 crore on ICICI Bank and Rs 3.95 crore on Kotak Mahindra Bank for non-compliance with certain regulatory norms.
  • IDFC, IDFC First Bank: The Competition Commission of India approved the merger of IDFC with IDFC First Bank.
  • Tejas Networks partnered with FIbreConnect to deploy an end-to-end optical network in Italy. It is the sole supplier of optical networking and broadband access products for FIbreConnect.
  • Mazagon Dock Shipbuilders signed a contract with the Ministry of Defence for the construction and delivery of one training ship for the Indian Coast Guard at a cost of Rs 310 crore.
  • Exide Industries will invest Rs 100 crore in Exide Energy Solutions.
  • ITI: ITI’s Bangalore EMC lab gets NABL accreditation for electrical testing.
  • HUDCO: The government will sell up to a 7% stake in HUDCO via an offer for sale. The OFS includes an optional 3.5% additional stake sale. The floor price of OFS was set at Rs 79 per share, at a discount of 12.17% from the previous close.
  • Lemon Tree Hotels signed an agreement for a 45-room hotel in Vadodara, Gujrat.


Nifty Overview & Outlook

Benchmark Nifty index opened with a gap on the higher side and settled above 19800 levels after adding 79 points to its previous closing after a lackluster trading session.

Small cap index outperformed the broader market as it was up by 0.88% while Midcap index was settled on a flat note, up 0.20%.

All the sectoral indices, barring Consumer Durables, settled in green. Amongst them Oil & Gas index was at the top of the tally,  gained 0.72% followed by Financial Services, FMCG and PSU Bank index that rose nearly 0.5% each.

Going ahead, we reiterate our short term postive view on Nifty index and suggest traders to maintain buy on dip trading strategy till it is trading above 19650 levels.


Derivatives Overview & Outlook

Yesterday, long buildup was seen in Nifty futures with increase in open interest by 2.2%. Short covering was seen in Banknifty and Finnifty futures with decrease in open interest by 6.1% and 3.0% respectively.

On sectoral front, long buildup was seen in Automobile, Finance, Oil & Gas, Technology and Telecom stocks whereas short covering was seen in Banking, FMCG, Power and Reality stocks.

On options front, put writing was seen at multiple strikes along with call writing at multiple strikes and maximum positions are at 19700 PE and 20000 CE.


Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 264 Cr in the cash segment, bought stocks futures and index futures worth Rs 2188 Cr and Rs 465 Cr respectively. DIIs were net buyer in the cash segment to the tune of Rs 113 Cr.


Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 19885-19950; Supports 19660-19570

Banknifty – Resistances 44800-45050; Supports 44100-43900

Finnifty – Resistances 20060-20170; Supports 19850-19750






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