Month: May 2023

Infosys, Embassy REIT, Jubilant FoodWorks, Mahindra Logistics, Forbes & Co, Orient Bell stocks in focus

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Indian benchmark indices BSE Sensex and NSE Nifty 50 may open flat with a positive bias on Tuesday amid mixed global cues. SGX Nifty was up in green ahead of the session hinting at a flat to positive start for the domestic share market. “With no respite on the global front and a resumption of selling from foreign investors, we expect markets to remain under pressure and test the 16,800-16,900 zone in Nifty. Select pockets from FMCG, pharma and IT are showing resilience while the majority are reeling under pressure. Participants should align their positions accordingly,” said Ajit Mishra, VP – Research, Religare Broking.

Also Read: Sensex ends at 2-month low, Nifty support shifts to 200-day SMA at 16850; use volatility to buy quality stocks

Embassy REIT: Blackstone Inc is reportedly slated to sell 7.7 crore units of Embassy REIT worth Rs 2,650 crore via block deals on Tuesday (27 September). The offer price of the block deal stands at Rs 345 per unit, 1.82 per cent lower against Monday’s closing price of Rs 351.40 on the BSE. IIFL, BofA, and Morgan Stanley are brokers to the deal, according to media reports.

Jubilant FoodWorks: The Dominos operator informed in an exchange filing on Monday that it has acquired a 29.24 per cent stake on a fully diluted basis in Roadcast Tech Solutions Pvt Ltd. The acquisition of the remaining 10.58 per cent stake (on a fully diluted basis) is likely to be completed by October 26, 2022. Jubilant FoodWorks had entered into a share subscription agreement, shareholders’ agreement and share purchase agreement dated 28 July to acquire a 40 per cent stake in Roadcast.

Mahindra Logistics: The company has acquired the business-to-business (B2B) express unit of logistics startup Rivigo in a slump sale for Rs 225 crore. The deal is expected to close on or before 1 November. Under the agreement, Mahindra Logistics will acquire the express business through a business transfer agreement (BTA), including the customers, team, and assets of Rivigo’s B2B express business, its technology platform, and the overall brand.

Forbes & Company: The listed arm of Shapoorji Pallonji Group on Monday announced the demerger of its precision tools and machine parts business. According to the scheme of arrangements approved by the board of directors of the company, the new entity will be called the Forbes Precision Tools and Machine Parts Limited (FPTL). The new entity will be carved out of the existing company Forbes & Co.

Also Read: RBI MPC likely to raise repo rate 50 bps to tame inflation; may pause rate hike after Dec monetary policy

Amara Raja Batteries: The company said its board has given approval to the demerger of plastic component for battery business with the name of Mangal Industries. The turnover of the said business as of March 2022 was Rs 569.4 crore.

Orient Bell: The company announced completion of expansion at its Hoskote plant in Bengaluru district. This expansion involved a capex of around Rs 34 crore well ahead of schedule. With this, the total capacity of the company has increased from 32 MSM per annum to 33.8 MSM per annum including 10 MSM per annum of the associated entities.

Inflation remains higher, tightening cycle may last longer than expected; check investment strategy

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By Manish Jain

In the last two months, the Nifty has rallied around 17% and that seems to have alleviated almost all the concerns that the markets had. Inflation, Rural demand, rate hike, slowing earnings growth and commodity prices have all been put behind. From being all blue, we have very quickly gone to all roses. However, the hard truth is that in reality the Nifty is nearly 1.5% up on a CYTD22 basis. This essentially means that all that we have done in the last couple of months is to regain the losses for January – June ’22. A large part of this rally, albeit with improved fundamentals, has been driven by liquidity. The FPIs have come back and they have come back like never before and this, we believe, has been one of the major reasons for the resurgence.

The second reason has been the strong foreign policy stand taken by our government. The swapping of Middle-eastern crude with more inexpensive Russian crude has been instrumental in keeping inflation in control and also saving precious US Dollars. The third thing that stands out is how India has been completely decoupled in the whole global recession scenario. The US & EU slowing down has actually had a bit of silver lining. This has pushed the global crude and commodity prices and also helped bring the FII flow back into the country. Last, but not least, The Indian central bank – RBI, has played a key role in managing the economy. At a time when most central banks have been in a reaction mode, RBI has been proactive in tightening and which has helped in containing the inflation situation.

So, the question is – have we all missed the bus? Is the rally over? What should be the strategy now? The simple answer to the above-mentioned questions is – No. The markets will likely give us more chances to build positions. There are some concerns that continue to linger on. The first one is food inflation, particularly rice, which has been a cause of concern. This could mean that inflation continues to remain higher and that in effect means that the tightening cycle can last longer than expected.

Also read: Adani buy of Holcim’s assets triggers next wave of consolidation

The second concern is the Balance of Payment which has been caused by stagnant exports and rising imports. Dare I say that the danger of getting into a 2012-14 kind of situation now seems very real? This could also be a major cause of worry for the markets. So, the moot point is that markets will give us opportunities to build positions, so rather than lamenting, be watchful and don’t miss the bus a second time coming. However, when you do buy, always remember – Buy quality, buy long term. Stay invested and create wealth. Invest in good & clean companies.

(Manish Jain is a Fund Manager at Coffee Can PMS, Ambit Asset Management. The views expressed in the article are of the author and do not reflect the official position or policy of FinancialExpress.com.)

Sensex, Nifty fall for 2nd straight day on weekly F&O expiry; Bank Nifty looks bullish, use buy on dips

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Domestic equity market benchmarks BSE Sensex and NSE Nifty 50 ended in the red for the second straight day on Thursday, a day of weekly F&O expiry. BSE Sensex fell 412 points or 0.7 per cent to end at 59,934, while NSE Nifty 50 slipped 126 points or 0.7 per cent to finish trade at 17,877.40. Index heavyweights such as Infosys, Reliance Industries Ltd (RIL), Axis Bank, HDFC Bank, and Kotak Mahindra Bank, among others contributed the most to the indices loss. Broader markets outperformed equity frontliners. S&P BSE MidCap index gained 82 points to end at 26,307, while S&P BSE Smallcap index was up 19 points to settle at 29,911.

Also read: Tata’s 5-year plan to make Air India great again: 30% market share, ‘fixing the basics’, other key focus areas

The Bank Nifty index witnessed some profit booking at higher levels which indicates 41,800-42,000 will act as an immediate hurdle on the upside. The lower-end support stands at 40,000 levels where one of the highest open interests is built up on the put side. The undertone remains bullish and once should keep a buy-on-dip approach as long as it holds the support of 40,000 on the downside.

Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty corrected once again from above 18000 level and underperformed the other markets for a change. Broad markets continues to lag while largecaps seemed to be under mild selling pressure. 18096-17771 could be the band for the Nifty in the near term.

Also read: WPI inflation may ease off to single digit by Oct; RBI MPC may hike repo rate by 50 bps in Sep

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

We saw markets rallying sharply over the past week, so profit-taking was on expected lines. Volatility would continue due to concerns of a hawkish stance on rate hikes from the central banks amid rising inflation. In an uncertain market, stock & sector-specific buying activity could gain momentum. Nifty has formed a bearish candle on daily charts and a double top formation on intraday charts indicating continuation of weakness in the near future. The trading set up suggests that a fresh round of selling is possible only after the dismissal of the 17800 support level. If the index trades above 17800 then it could retest the level of 18100- 18150. On the flip side, below 17800, a quick intraday correction is not ruled out. Below which, it could slip till 17700-17650.

Vinod Nair, Head of Research, Geojit Financial Services

Defying the positive trend of global markets, domestic indices shed its early gains, dragged by losses in IT and pharma sectors, while mid & small caps outperformed. Fears of a recession in the global economy exacerbated selling pressure in IT and pharma stocks. Mid & small caps are expected to continue their trend in the short to medium term as they are trading reasonably well compared to large caps and at a discount to their historic valuation. Globally, in light of the elevated inflation in the US, investors are on an edge, assessing the possibility of a higher magnitude of a rate hike in the next Fed policy meeting.

Sensex, Nifty end in red for 7th straight day amid volatility on F&O expiry; all eyes on RBI MPC meet decision

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BSE Sensex and NSE Nifty 50 settled lower after a volatile trade on the day of monthly F&O expiry. BSE Sensex fell 188 points or 0.3 per cent to end at 56,410, while NSE Nifty 50 slipped 40.50 points or 0.24 per cent to settle at 16818. Investors will keenly watch RBI MPC meet outcome on Friday. Index heavyweights such as Asian Paints, TCS, Kotak Mahindra Bank, ICICI Bank, Bajaj Finance, Reliance Industries, among others contributed the most to the indices’ loss. Broader markets outperformed the equity frontliners. S&P BSE MidCap index gained 0.3 per cent or 75 points to end at 24513, while S&P BSE SmallCap added 0.6 per cent or 176 points to finish at 28,047. India VIX, the volatility index, fell 3.6 per cent to end at 21.30 levels.

Also read: India a ‘bright spot’ in car sales, even as Moody’s cuts global outlook to ‘negative’; Europe weakest

Market was extremely volatile on the F&O expiry day, and traders preferred to cut their position in some of the rate-sensitives ahead of the credit policy announcement. The market is already in an oversold position and if the rate hike is above the estimate, then we could see bouts of intra-day volatility with a negative bias for some more time. Technically, despite a solid start, the benchmark Nifty failed to sustain above the 200-day SMA (Simple Moving Average) or 17000 level. In the intraday time frame, the index has formed a double top formation and conversely it is consistently taking support at 16800. As long as the index trades above 16800, the chances of a quick pullback rally is bright. Above the same, the index could retest 16950-17000 levels. However, below 16800, the index could slip till 16700-16650.

Vinod Nair, Head of Research at Geojit Financial Services

The initial upticks of the domestic market were short-lived due to its weak global peers and declining rupee. As the yield differential between India and the US fell to a multi-year low of 348 bps, foreign investors are still departing from the Indian market. Amid the ongoing global trend of aggressive rate hikes, markets are braced for a 50 bps increase by RBI. Investors eagerly await the central bank’s intervention to aid bank liquidity, curb currency depreciation, and provide updates on its monetary stance & GDP outlook.

Also read: RBI MPC may go with 35-50 bps repo rate hike in Sep monetary policy; may lower GDP growth forecast

Mohit Nigam, Head – PMS, Hem Securities

Investors can accumulate quality stocks in this sector for good return in the medium term. We believe investors should remain cautious ahead of the RBI’s monetary policy meeting later this week. a 50 bps interest rate hike is expected from RBI. On the technical front immediate support and resistance in Nifty 50 are 16700 and 17200 respectively. Immediate support and resistance in Bank Nifty are 37250 and 38250 respectively.

Palak Kothari, Senior Technical Analyst, Choice Broking

On the call side, the highest OI was witnessed at 17000 while on the put side was at 16500 level. The hourly momentum indicator RSI bounced from the oversold zone as well as bullish divergence has been seen which points out some upside correction can be seen. The support for Nifty has shifted around 16700 levels while on the upside 17050 may act as an immediate hurdle. On the other hand, Bank Nifty has support at 37000 levels while resistance at 38500 levels. Overall, the Nifty is trading in the range of 16750-17050 level and either side breakout will show the direction. Pharma & media sector stocks are looking good for trade. One can add on dips.

Youngsters should work 12 hours a day: Murthy

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Indian youngsters need to work 12 hours a day to ensure India can compete with economies that have made tremendous progress in the last 25-30 years, said Infosys co-founder NR Narayana Murthy.

In an interaction with former Infosys CFO Mohandas Pai for a 3one4 Capital’s podcast, The Record, Murthy said India’s work productivity is among the lowest in the world and that in order to compete with countries like China, the country’s youngsters must put in extra hours of work as Japan and Germany did after World War II.

Speaking about youth and productivity, he said, “Somehow our youths have the habit of taking the not so desirable habits from the West and not helping the country.”

Murthy, added, “Unless we reduce corruption in the government at some level… unless we reduce the delays in our bureaucracy in taking decisions, we will not be able to compete with those countries that have made tremendous progress.”

“So, therefore, my request is that our youngsters must say, ‘This is my country. I want to work 70 hours a week.” German leaders made sure that every German worked extra hours for a certain number of years. Murthy said every government is as good as the culture of the people.

Emphasising the need for India to grow, he shared two anecdotes. Murthy said 13-14 years ago, he was on the board of a bank in London. Over a period of five years, he found that in 2007-8, when they mentioned China three times, they mentioned India once, and they mentioned US four times. Five years later, they mentioned China 30 times and they didn’t mention India even once.

And in 2023, last month, during an intellectual discourse in Europe, he heard the name of China six times while that of US three times. No one took the name of India even in 2023.

Giving another anecdotal record in 1994, he said Infosys commissioned a study on IITs and Regional Engineering Colleges and found that no student passing out from those colleges mentioned Infosys as a job destination.

Five years later, a fresh survey revealed that 18% students mentioned Infosys as their possible employer. That’s because the founders spent little but worked very hard to make sure every investor would know Infosys.

Israel’s Innovative ‘Sponge Bombs’: Unveiling a Unique Tool to Counter Gaza’s Underground Tunnels

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Israel is on the verge of introducing a groundbreaking tactical tool, referred to as the “sponge bomb,” in its ongoing efforts to counteract the complex network of underground tunnels used by Hamas in Gaza.

These specialized devices are encased within a protective plastic container featuring a precisely engineered metal barrier that divides two distinct liquids. When the moment arises, a trained soldier activates the “sponge bomb,” allowing these liquids to merge as it advances towards its intended destination.The Israel Defense Forces (IDF) have ingeniously designed these “sponge bombs” to serve a very particular purpose. Unlike traditional explosive devices, they do not inflict harm through explosions. Instead, they work by promptly sealing any gaps or tunnel openings that might be exploited by hostile combatants.

To address this intricate challenge, the IDF has formed specialized tunnel reconnaissance units within the engineering corps. These units are equipped with an array of cutting-edge tools, including ground-penetrating radar, both aerial and ground sensors, and advanced drilling systems.Recent reports indicate that IDF personnel have been furnished with specialized equipment to facilitate underground visibility. Given the absence of natural light in the underground environment, troops are now reliant on thermal technology for night vision, supplemented by specially designed radios capable of reliable communication in these challenging conditions.In addition to these measures, Israel is actively exploring the use of drones and robots to navigate the complex tunnel network. However, deploying these technologies underground has posed significant technical challenges.The introduction of the “sponge bomb” and these highly specialized tools represents a concerted effort by Israel to adapt and respond effectively to the evolving threats posed by underground tunnel networks. These endeavours are part of a broader strategy to ensure the safety and security of Israeli soldiers as they confront the complex and perilous reality of the “Gaza Strip.”

Yields rise to 7.312% on hawkish Fed stance

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Bond yields went up to 7.312% on Thursday, a level last seen on August 8. Dealers said the markets were somewhat nervous after the US Fed hiked the funds rate by 75 bps and sounded more hawkish than expected.

The Reserve Bank of India (RBI) meets next week to review the monetary policy. The markets are expecting a 50-bps hike in the repo which would take it to 5.9% from 5.4% at present. The central bank’s commentary on liquidity is keenly awaited given that the banking system liquidity has slipped into a deficit.

Meanwhile, the RBI received bids worth Rs 94,267 crore for the overnight variable rate repo auction on Thursday, nearly twice the notified amount of Rs 50,000 crore. The cut-off rate was 5.58%, a little lower than the Marginal Standing Facility (MSF) rate of 5.65%.The auction was ostensibly aimed at helping ease the liquidity deficit which had gone up to Rs 21,873 on Tuesday.

On Wednesday the net injection of funds was much smaller at Rs 11,886.4 crore. The weighted call money rate which had gone up to 5.64% on Tuesday, remained steady on Wednesday. The money supply data from the central bank revealed that currency with the public stood at Rs 2.3 trillion as on September 9, up 8% year-on-year.

Nifty has to hold above 15,150 to continue bullish trend; HDFC Bank among 4 technical stocks to buy

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By Shrikant Chouhan

The market continued to remain range bound, trading between 15150/51200 and 14900/50200 levels. However, towards the end, Nifty IT and Bank Nifty helped the broader market to move higher. To a greater extent, broad-based buying in the technology sector has helped the market to close higher compared to the financial sector. From the financial sector, private banks topped the day, while the PSU banks closed in the negative territory on Tuesday. The Nifty and Sensex have formed bullish reversal formation by closing at the highest point of the day. On the day of the weekly expiration of Index options, we could see a bullish continuation if these indices manage to hold above 15150/51200 levels. Above, 15150/51200 the market would face the biggest hurdle at 15270/51750. If the index falls below the level of 15000/50750, the bullish pattern would fail.

HDFC Bank 

BUY, CMP: Rs 1,562.5, TARGET: Rs 1,640, SL: Rs 1,530

Post correction from the multiple highs of around 1630 the stock was into a sloping channel formation, eventually, it has managed to reverse from support of its 50 day SMA and formed a bullish candlestick formation on the daily chart.

Tech Mahindra

BUY, CMP: Rs 988.15, TARGET: Rs 1,040, SL: Rs 965

On the weekly chart, after the vertical rally from the lows of 460 to 1080 stock had corrected and got stuck in a broader range for few weeks and currently a breakout from its inverse head and shoulder chart pattern along with closure above 50 day SMA is evident which indicates a new leg of the uptrend from current levels.

Escorts Ltd 

BUY, CMP: Rs 1,362.6, TARGET: Rs 1,430, SL: Rs 1,335

The stock had reversed sharply with a long bullish candle from its short term trend line on the weekly chart, and is into a rising channel pattern forming a higher top and higher bottom series with incremental volume activity on the daily chart.

Ambuja Cements

BUY, CMP: Rs 291.05, TARGET: Rs 305, SL: Rs 285

The stock is comfortably trading above the upper range of the parabolic SAR indicator which indicates a strong trending up move in the stock to persist. Moreover, the structure of the stock has a bullish continuation formation with a higher bottom series on the daily chart which specifies bullish momentum to continue over a period of time.

(Shrikant Chouhan is the Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)

Will bears drag Nifty below 18000 or bulls continue momentum? 5 things to know before market opening bell

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Indian equity markets are likely to open lower on Wednesday, hinted SGX Nifty. Nifty futures traded 298 points, or 1.65% lower at 17,794 on the Singapore Exchange, signaling that BSE Sensex, NSE Nifty 50 were headed for a gap-down start. “The current market buoyancy globally, including in India, is based on the expectation that inflation has peaked along with softening crude prices. We believe that, to an extent, the expectation of inflation peaking is right, but one will have to keep an eye on energy prices in Europe & US with the onset of winter, which can re-ignite the inflation fire. The current momentum in the equity markets can sustain, but we would advise investors to raise some cash at the current levels, which can be deployed if the markets correct on either rate hikes or energy prices moving up again,” said Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS.

Also Read: JSW Steel, Infosys, Vedanta, Jet Airways, Future Lifestyle, Bharat Forge, KEC International stocks in focus

Nifty technical view: “A small positive candle was formed on the daily chart with minor upper and lower shadow and with opening upside gap. Technically, this market action signal a formation of spinning top type of candle pattern at the highs. Normally, a spinning top formation after a reasonable upmove or at the hurdle could be considered as a reversal pattern post confirmation. Hence, any weakness from here or from highs could confirm top reversal pattern. However, a sustainable move above this patterns high at 18088 levels is likely to negate the bearish implication. The short term trend of Nifty continues to be positive amidst a range movement,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Levels to watch for: The Nifty is trading with higher high & higher low formations from the last 5 trading sessions on daily charts suggesting strength in the counter. “The support for Nifty has shifted around 17900 levels while on the upside, 18180 may act as an immediate hurdle. On the other hand, Bank Nifty has support at 40000 levels while resistance at 41400 levels. Overall, till the time nifty holds the 18000 level, it’s looking strong on charts crossing above 18180 marks will open the gate for 18400-18500 levels. FMCG stocks look positive on charts; one can accumulate on dips,” said Palak Kothari, Senior Technical Analyst, Choice Broking

IPO watch: Harsha Engineers International garnered Rs 225.7 crore from anchor investors ahead of its IPO that opens for public subscription today, The company informed the bourses that it allocated 68,40,855 shares at Rs. 330 per share on Tuesday to anchor investors. American Funds Insurance Series Global Small Capitalization Fund, Goldman Sachs Funds – Goldman Sachs India Equity Portfolio, PineBridge Global Funds – PineBridge India Equity Fund, Abu Dhabi Investment Authority-Monsoon are among the investors that participated in the anchor book.

Also Read: Sensex, Nifty end at 5-month high, Nifty support at 18000, what do charts say? Investors eye US inflation data

Stocks under F&O ban on NSE: Indiabulls Housing Finance, Ambuja Cements, and Delta Corp remain the three stocks under the NSE F&O ban list for September 14. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.

Buy these two stocks for near term gains as Nifty’s intermediate uptrend remains intact

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While the Nifty has corrected from the high of 15,044, the index continues to hold above a rising trend line that has held the important lows of the last few months. This implies that the index remains in an intermediate uptrend. With the strong bounce-back seen on Wednesday, traders will need to watch if the Nifty can now hold above the crucial supports of 14,506-14,461 in the very near term. Further upsides are likely once the immediate resistances of 14,723 are taken out.

Stock picks

Buy Torrent Pharmaceuticals

On Wednesday, the stock moved up smartly and in the process took out its recent highs on the back of above-average volumes. This augurs well for the uptrend to continue.

Technical indicators too are giving positive signals as the stock trades above the 50 day SMA and short term momentum indicators like the 14-day RSI too have bounced back from lower levels and are now in rising mode and not overbought.

With the intermediate and long term technical setups looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the Rs 2600-2640 levels. CMP is Rs 2627.35. Stop-loss is at Rs 2500 while targets are at Rs 2890.

Buy Shipping Corporation of India

SCI has recently corrected from a high of Rs 134.65 tested in early March 2021. The stock found support at the Rs 97 levels before bouncing back in the last two weeks and consolidating in a range.

On Wednesday, the stock broke out of a narrow range on the back of above-average volumes. This augurs well for the uptrend to continue.

Technical indicators are giving positive signals as the stock trades above the 20-day SMA. Short term momentum readings like the 14-day RSI too are in rising mode and not overbought.

With the short term and intermediate technical setups looking attractive, we expect the stock to gradually move higher in the coming weeks. We, therefore, recommend a Buy between the Rs 114-118 levels. CMP is Rs 116.8. Stop-loss is at Rs 108 while targets are at Rs 138.

(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)