Nifty needs to negate formation of lower high pattern to head to 17700-17777; maximum call OI at 18000 By Shivangi Sarda Nifty 50 index opened negative on Wednesday but took support at 17500 marks and moved in a positive to range-bound manner throughout the session. It failed to surpass the previous day’s highs but declines were being bought to settle the day above 17600 zones. Buying was visible at support zones but lack of momentum and strength in heavyweight could not speed up the up-move and it closed with gains of around 27 points. It formed a small Bullish candle on the daily scale but continues forming lower highs from the last three sessions. Bank Nifty opened negative but witnessed a pullback move and after respecting 38550 zones, it moved above 39100 zones. It closed above 39000 zones with gains of around 340 points. It formed a Bullish candle on the daily scale and is forming higher highs from two sessions. For monthly Bank Nifty, Maximum Put OI is at 38000 then 38500 strike and maximum Call OI is placed at 40000 then 39500 strike. We have seen Call writing in 39200 with unwinding at 38500 while Put writing is witnessed at 39000 strike. Now it has to hold above 38888 zones for an up move towards 39250 and 39500 zones whereas supports are placed at 38750 and 38500 zones. On the sectoral front, apart from IT, Pharma and Auto stocks, all other sectors traded in the positive territory out of which the most strength was seen in Private Banks, Realty, Media and Metal. Now Nifty 50 has to negate the formation of lower highs of the last three sessions to continue the positive momentum towards 17700 and 17777 zones whereas support is intact at 17500 and 17442 zones. Traders are advised to buy on a decline with a positive stock-specific action in Can Fin Homes, Sun tv, Bandhan Bank, IDFC First Bank, Syngene, Federal Bank, Adani Enterprises, Indusind Bank, ZEEL, IGL, Ashokley, Cholafin, IRCTC, and Grasim while weakness in Hindpetro, Mphasis, BPCL, Divislabs, TCS and IOC. (Shivangi Sarda is an Analyst – Equity Derivatives & Technicals, Broking & Distribution, Motilal Oswal Financial Services Ltd. Views expressed are the author’s own. Please consult your financial advisor before investing.)
Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.
Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.
Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.
“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.
According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.