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Hans India
30-06-2025
- Business
- Hans India
Global trends to drive near-term market mood
A bottom-up strategy focused on margin mean-reversion and undervalued laggards is advisable MARKET KHABREIN Stock selection should favour low-margin, low-valuation names with potential for cost-driven earnings recovery. Caution persists regarding potential tariff escalations, with US tariffs scheduled to resume from July 9 and focus will shift to trade agreements Quote of the week Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas —Paul Samuelson Buoyedby easing geopolitical tensions, supported by improving global sentiment, renewed buying interest from FIIs and sharp pullback in international crude oil prices; markets finally broke out of their five-week-long consolidation phase. The rebound followed a cautious start, with broader participation seen from midweek as sentiment turned positive. For the week, the Sensex index rose 1,650.73 points or 2 percent to end at 84,058.90, and the Nifty added 525.4 points or 2.09 percent to close at 25,637.80. Mild exuberance was evident in the broader market with both the BSE Mid-cap and the BSE Small-cap indices gaining more than 2 percent and 3.5 percent respectively. Reversing the four-week losing streak, the IndianRupee ended 110 paise higher at 85.49 per dollar. FIIs extended their buying in second week with purchases worth Rs 4,423 crore. DIIs continued their buying in tenth consecutive week buying equities worth Rs 12,390.17 crore. Nine of the top-10 most valued firms together added Rs 2,34,565.53 crore in market valuation last week, with Reliance Industries emerging as the biggest gainer, in line with a buoyant trend in equities. With progress of monsoon a bit tardy, high frequency data points IIP and PMI figures will be in focus. A significant volume of pre-IPO shareholder lock-ins worth $ 1,860 million is set to expire in July 2025, potentially reshaping the shareholding structure of several recently listed companies. Such expiries are closely watched by market participants, as they can lead to changes in liquidity, free float, and shareholding patterns in the post-IPO phase. Corporate India's profitability is currently hovering near decade-high levels, and with scope of margin expansion muted, some experts believe sustaining this momentum may prove challenging. Post-Covid profits were led by restructuring, but margins are now peaking, and demand remains weak. Valuations are expensive across sectors despite slowing earnings, posing downside risks say observers. A bottom-up strategy focused on margin mean-reversion and undervalued laggards is advisable. Stock selection should favour low-margin, low-valuation names with potential for cost-driven earnings recovery. In the near term, global cues will continue to drive market direction. Despite improved sentiment expect the unexpected speed breakers from Trump tantrums. Caution persists regarding potential tariff escalations, with US tariffs scheduled to resume from July 9 and updates on trade agreements will remain in focus. The passage of Trump's massive tax and spending bill in the Senate, moving the legislation one step closer to final approval may cast its shadow on US equities. Despite noise in social media that US-China trade deal is on cards, China has reiterated opposition to any trade deals at its expense. Watch developments on this front. If you think investing is gambling, you're doing it wrong. The work involved requires planning and patience. However, the gains you see over time are indeed exciting. FUTURES & OPTIONS / SECTOR WATCH Tracking the cease fire news in the Middle East, the Indian market rallied during the week ended. Both Nifty and Bank Nifty registered weekly gains of more than 2%. On the expiry day, the Nifty futures finally staged a decisive breakout from the recent prolonged consolidation phase and ended the June series above the 25,500 mark, registering a healthy gain of 2.69%. This breakout not only signals a potential shift in short-term sentiment but also sets a positive tone for the July series. The Nifty rollover rate remains steady at 79.53%, nearly unchanged from last month's 79.10% and slightly above the three-month average of 78.09%, indicating similar momentum for the July series. In contrast, Bank Nifty rollover stands at 75.75%, lower than last month's 79.29% and below the three-month average of 77.11%, suggesting weaker momentum compared to the previous series. Nifty rollovers indicate that positions were carried forward around the 25,200–25,300 futures range, while the Bank Nifty rollover range is 56,600–56,700 level. In the options segment, the highest Call open interest was seen at the 26,000 and 25,900 strike levels, whereas Put writing was prominent at the 25,500 strike. Implied volatility (IV) for Nifty's call options settled at 11.87%, while put options concluded at 12.57%. The India VIX, a key indicator of market volatility, concluded the week at 12.59%. The Put-Call Ratio Open Interest (PCR OI) stood at 1.28 for the week. Failure to sustain the 25,200-25,300 level on Nifty and 56,600-56,700 level on Bank Nifty may lead to a decline in both indices. For the upcoming sessions, Nifty has support at 25200 level whereas resistance is placed at 26000 level. Stocks looking good are Kotak Bank, IRCTC, JSW Steel, MGL, Naukri, Shriram Finance, Tata Steel and Unominda. Stocks looking weak are Blue Star, IREDA, KPIT, Lodha, Mannapuram, Nykaa and NTPC. (The author is a senior maket analyst and former vice-chairman, Andhra Pradesh State Planning Board)
Hans India
23-06-2025
- Business
- Hans India
Middle East flares may weigh down markets
Pumped up by US President Trump's statement about decision of US direct involvement in the Israel-Iran conflict in next two weeks, the strong rally on Friday helped market erase previous few sessions losses to close on optimism. For the week, the BSE Sensex index added 1,289.57 points or 1.58 per cent to finish at 82,408.17, and on the NSE, the Nifty gained 393.8 points or 1.59 per cent to end at 25,112.40. Broader markets underperformed benchmark indices, the BSE Mid-cap Index was down 0.4 per cent and the BSE Small-cap index shed nearly 2 per cent. Sector wise, Nifty Private Bank index rose 1.6 per cent, Nifty Auto index added 1.5 per cent, Nifty Information Technology index rose 1.3 per cent. However, Nifty Media index shed 3 per cent and Nifty Pharma index fell 1.7 per cent, Nifty Metal and PSU Bank indices shed 1.3 per cent each. FIIs snapped four week selling with purchases of equities worth Rs 8,709.60 crore in current week. DIIs continued their buying for ninth straight week with purchases of equities worth Rs 12,635.58 crore. Domestic factors such as a decline in India's wholesale inflation and the RBI's relaxation of lending norms supported the market's upward momentum amid Middle East concerns. The rupee witnessed a sharp fall last week. The fall to 86.60 on the Indian rupee (86.59) has happened much faster than expected. Rise in crude oil prices on the back of the ongoing Israel-Iran conflict is weighing on the domestic currency. The US Federal Reserve meeting last week largely turned out to be a non-event for the markets. The Fed kept the rates unchanged at 4.25-4.5 per cent. It also retained its forecast for another 50-basis points rate cuts for the rest of the year. However, the central bank had revised its inflation forecast higher. The higher revision has been attributed to the uncertainty prevailing over the impacts of higher tariffs. Weekend factors like US B-2 Bombers making incursions into Iran and with Israel and Iran continuing to exchange missile strikes will cast shadow on markets when markets open in the coming week. Looking ahead, traders may brace for heightened volatility as geopolitical tensions remain elevated. Iran has launched a retaliatory wave of missiles toward Israel, hours after U.S. airstrikes targeted its nuclear facilities in Fordow, Natanz, and Isfahan; and Iran's foreign minister stated that Tehran is willing to consider diplomacy only once Israel halts its aggression. Watch carefully the developments because of its impact on international crude oil prices. IPO Corner: After a long time, the primary market is going to see some intense action in a 'energetic week' with 13 (IPOs) hitting the D-Street. The companies will be raising nearly Rs 16,000 crore during the week, with five mainboard public issues up for grabs. The positive broader picture of the equity market, despite near-term concerns led by the Middle East and tariff-driven volatility, appears to be the reason for strong primary market action. Mumbai-based real estate developer Kalpataru is slated to raise Rs 1,590 crore via IPO. The IPO price band has been set at Rs 387 to Rs 414. New Delhi-headquartered EPC company Globe Civil Projects plans to garner Rs 119 crore through IPO. The IPO price band has been set at Rs 67 to Rs 71. Industrial gases provider Ellenbarrie Industrial Gases plans to mop up Rs 852.53 crore via the public issue. The IPO price band has been set at Rs 380 to Rs 400. Electric resistance welded steel pipes and structural tubes maker Sambhv Steel Tubes plans to raise up to Rs 540 crore. However, the biggest public issue of the current year will be from HDB Financial Services with a size of Rs 12,500 crore. The IPO price band has been set at Rs 700 to Rs 740. This remains the most anticipated issue among the pack. The SME segment will also see top action with 7 IPOs opening for subscription. Reports indicate that Tata Capital is closing in on a blockbuster Rs 17,200 crore IPO, after receiving regulatory clearance for its confidential draft prospectus. Expect some shift in fund flows from both retail investors and institutions from secondary market to IPO segment. The fresh wave of equity supply via initial public offerings (IPOs) can be a key risk to Indian stock market. If you think investing is gambling, you're doing it wrong. The work involved requires planning and patience. However, the gains you see over time are indeed exciting. FUTURES & OPTIONS / SECTOR WATCH With the broader indices Nifty and Bank Nifty locked in a tight range, derivative segment witnessed mild bouts of alternate buying and selling in stock futures. Despite ongoing tensions between Iran and Israel, indices ended the week on a positive note. In the options market, prominent Call open interest for Nifty was seen at the 25,500 and 25,300 strike, while the notable Put open interest was at the 25,000 and 24,800 strike. For Bank Nifty, the prominent Call open interest was seen at the 57,000 and 56,500 strikes, whereas notable Put open interest was at the 56,000 strike. Implied volatility (IV) for Nifty's Call options settled at 13.51%, while Put options concluded at 14.06%. The India VIX, a key market volatility indicator, closed the week at 14.26%. The Put-Call Ratio Open Interest (PCR OI) for the week was 1.06. Nifty is currently trading near its resistance level of 25,200. A breakout above this level could lead to a further move towards 25,500. On the downside, immediate support is placed at the psychological level of 25,000, followed by strong support at 24,800. As long as Nifty holds above 24,800, the market can be considered a buy-on-dips. Watch out for breakout attempts near resistance and potential reversal signs around the key levels. As always, manage risk with discipline and stay anchored to price confirmation. Stocks looking good are Ashok Leyland, BEL, Bharti Airtel, Indus Towers, Trent, Kaynes and Wipro. Stocks looking weak are ATGL, Bluestar, RVNL, Shree Cements, Tata Chemicals, Unominda and Voltas. (The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)
Hans India
09-06-2025
- Business
- Hans India
RBI repo cut sparks rally; Benchmarks eye new highs
C Kutumba RaoDespite global headwinds and renewed FII selling; supported by strong DIIs buying and positive domestic GDP data and RBI cut of the repo rate by 50 bps to 5.50% and CRR by 100bps to 3%; markets closed the week ended on optimistic note. For the week, the Sensex added 737.98 points or 0.9 per cent to finish at 82,188.99, and the Nifty jumped 252.35 points or 1.01 per cent to end at 25,003.05. Broader markets outperformed the benchmark indices with both the BSE Mid-cap Index and the BSE Small-cap rising over 2 per cent. FIIs remained net sellers in the third consecutive week as they sold equities worth Rs 3,565.88 crore. On the other hand, DIIs continued their buying in the seventh consecutive week with purchases worth Rs 25,513.43 crore. The Indian rupee ended marginally lower against the US dollar as domestic currency finished at 85.63 per dollar. A dovish RBI surprised markets with a 50-basis point (bp) cut to the repo rate and a 100-bp reduction in the cash reserve ratio (CRR). This follows earlier repo rate cuts of 25 bps each in February and April. Bolstered by supportive macro indicators such as strong Q4 GDP, GST collection, and a favourable monsoon, market forecasters expect benchmark indices to cross historic highs well before Diwali. DIIs buying was focused on domestically oriented and interest-sensitive sectors such as Financials, Real Estate, Retail and FMCG. In the US markets, despite a mildly positive bias from strong US job data and expectations of easing US-China trade tensions; the big headline has been the spat or breakup between Elon Musk and Donald Trump. There are many things that could happen. Let us see how it pans out. Weakness in Tesla shares showcase vulnerability of 'politically tainted' stocks. With PM Modi accepting invite to attend the G7 Summit; and the summit expected to deliberate several key issues in the backdrop of Trump's tariff wars; it would be wise to track developments at G7 summit. Too many investors become obsessed with being right, even when the gains are small. Winning big and cutting your losses when you're wrong is more important than being right. FUTURES & OPTIONS / SECTOR WATCH Spurred by the RBI's 50 basis point rate cut, derivative segment witnessed spike in trading volumes. Nifty rose over 1%, while Bank Nifty outperformed with gains of around 1.5%. Among sectors, Realty, Capital Markets and NBFCs led the gains. In the Options segment, prominent Call open interest for the Nifty was seen at the 25,000 and 25,500 strikes, while the notable Put open interest was at the 25,000 and 24,800 strikes. For the Bank Nifty, the prominent Call open interest was seen at the 56,000 and 57,000 strikes, whereas notable Put open interest was at the 56,000 strike. Implied volatility (IV) for Nifty's Call options settled at 14.38%, while Put options concluded at 15.41%. The India VIX, a key market volatility indicator, closed the week at 15.08%. The Put-Call Ratio Open Interest (PCR OI) for the week was 1.03. Nifty is currently positioned at the upper band of the consolidation range of 24,400–25,100. Chartists expect the Nifty to move above the upper band of the range and head higher towards the immediate resistances of 25,250 and then 25,500 in the coming weeks. Any dips should be viewed as a buying opportunity, with key short-term supports placed at 24,700 and 24,400. A Traders in stock futures would do well to track the flurry of corporate actions lined up this week, including record dates for dividends, stock splits, rights issues, and bonus shares. Close watch is warranted in the five Tata Group stocks and five Adani Group stocks that will trade ex-dividend this week. Stocks looking good are Fortis, HDFC AMC, Indian Bank, PNB Hsg, PPL Pharma, Shriram Finance, and Unominda. Stocks looking weak are Biocon, BDL, Colgate, KPIT Tech, Kaynes, Mankind and Tata Technologies. (The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)
