Dalal Stree
Dalal Street Week Ahead: MPC Minutes, Jio Financial Listing, and Powell Speech Among 10 Factors Driving Action.
S&P BSE Sensex and Nifty50 fell almost 0.60% during the holiday week due to IT and metal stock selling. Know what the stock markets will do this week amid major domestic and worldwide events.
The Indian equity market declined for the fourth week in a row for the first time in 15 months. Sensex, Nifty, and Nifty Bank declined roughly 1% each with 31 Nifty stocks losing. Profit booking in the Nifty metal sector and foreign institutional investor selling caused this. Midcap and smallcap markets have remained bullish despite this slump, which is noteworthy.” Senior Technical Analyst Pravesh Gour.
Gour said macroeconomic indicators, global stock market trends, and Foreign Institutional Investors (FIIs) activities will shape market trends in the coming days, highlighting the rupee’s movement against the dollar and Jio Financial Services’ listing on Monday, August 21.
Next week’s top 10 factors
US market
Wall Street benchmark indices ended down on Friday due to inflationary concerns and the longevity of the high interest rate regime. Dow 30 closed at 34,500.70, up 25.83 points 0.07%, S&P 500 at 4,369.71, down 0.65 points 0.01%, and Nasdaq Composite at 13,290.80, down 26.16 points 0.20%.
Indian markets will follow the Friday US market close on Monday. They will follow Dow and GIFT Nifty futures on Monday. The latter indicates Nifty50 and Monday action early.
Global Macros
US to release S&P Global Services, manufacturing, composite PMIs, and initial unemployment claims. UK PMI Manufacturing, S&P Global, and CIPS statistics will be released. The week will see Eurozone S&P Global Services and Manufacturing PMI and consumer confidence statistics.
China will set 1- and 5-year loan prime rates. The Street will also watch Federal Reserve Chair Jerome Powell’s Jackson Hole Economic Policy Symposium speech on Friday, August 25.
Jio Financial Services Listing
The much-anticipated listing of Jio Financial Services (formerly Reliance Strategic Investments), the entity demerged from billionaire Mukesh Ambani-led Reliance, on August 21 will focus market attention on index heavyweight Reliance Industries (RIL).
The financial services unit of Reliance is worth Rs 261.85 a share after the spin-off last month.
Jio Financial Services will retain its FTSE Indices membership and join MSCI Global Standard Index on August 23.
Minutes of MPC
The MPC’s August 10 meeting minutes, published on August 24, will also be examined. After the Reserve Bank of India raised its FY24 CPI inflation forecast to 5.4 percent from 5.1 percent due to food price spikes, experts expect the rate cut cycle to be delayed until FY25. July CPI inflation rose to 7.44 percent, beyond street predictions, from 4.87 percent in June.
Jackson Hole Symposium
Global attention will be on Fed Chair Jerome Powell’s remarks at the Jackson Hole economic policy symposium on August 24-26. Powell will appear at the August 25 Kansas City Fed event. After July’s 25 bps fed funds rate hike, Powell hinted at one more rate hike in upcoming policy meetings as the Fed is strongly committed to bringing inflation back down to its 2 percent goal and continues to take a data-dependent approach in determining the extent of additional policy firming. July CPI inflation was 3.2 percent and core CPI 4.7 percent.
The essential things to watch out for in his comment are the strong signal about the conclusion of the rate hiking cycle and the likely start of the rate decrease cycle.
FIIs Feeling
After three months of buying, FIIs sold in August due to the rising US dollar index to 103.43 (from below 100 in mid-July) and US 10-year treasury yields to 4.25 percent (from 3.8 percent in mid-July). Despite DIIs’ efforts to counteract the FII outflow, many expect the selling to continue.
FIIs sold Rs 3,379 crore worth of shares last week, bringing their monthly cash outflow to nearly Rs 11,000 crore. DIIs bought Rs 3,892 crore in shares last week, bringing their monthly net buying to around Rs 9,250 crore.
Indian Rupee
Market investors will also closely monitor the Indian rupee, which touched an all-time low of 83.42 versus the US dollar and closed at a record closing low of 83.12 last week due to rising oil prices and the US dollar index. The rupee continued to weaken for a fourth week due to equity market profit taking and FII outflow, and experts predict it to continue.
Technical View
For the fourth straight week, the Nifty50 recorded its lowest weekly closing level since June, but it still managed to defend 50-day EMA (exponential moving average), which coincides with 10-week EMA intraday, and 19,300 closing level. Thus, 19,300-19,250 is likely to be critical for additional fall into psychological 19,000, while 19,400-19,500 is the larger hurdle, experts added.
Nifty has respected the 50-day EMA twice recently, which is around 19,250, and its break could push the index to 19,100 first and then to 18,900,” said Religare Broking SVP-technical Research Ajit Mishra.
He expects a rebound to find resistance at 19,500 (20-day EMA) and 19,650.
F&O Hints
The Option data also showed that 19,400-19,500 will be important resistance in coming sessions, with support at 19,300-19,200.
We saw the greatest weekly Call open interest at 19,400 strike, followed by 19,500 strike, meaningful Call writing at 19,400 strike, then 19,300 & 19,600 strikes, and maximum Put open interest and writing at 19,300 strike, followed by 19,200 strike.
The India VIX rose 5.4 percent to 12.14 levels for the first time since the third week of May, indicating a continuation of volatility. Experts stated street caution may increase if volatility exceeds 13.5-14 levels.
IPO
Aeroflex Industries, a flexible flow solution products maker, will launch its Rs 351-crore IPO on April 22-24 at a price band of Rs 102-108 per share, and infrastructure company Vishnu Prakash R Punglia will launch its Rs 309-crore maiden public issue on August 24 at a price band of Rs 94-99 per share.
According to the IPO timeline, Pyramid Technoplast will finish its Rs 153-crore IPO on August 22 and TVS Supply Chain Solutions will debut on August 23.
Sungarner Energies, a power solutions company, will open its IPO for subscription from April 21 to 23 at Rs 83 per share. Shoora Designs will close its IPO on August 21, and Crop Life Science and Bondada Engineering will close on August 22. The next week, August 23, Shelter Pharma shares will be listed.
Bulk Deals
Norges Bank acquires Concord Biotech for Rs 80.92 crore; Morgan Stanley buys Repro India for 1.24%
Norges Bank :- In open market transactions on August 18, Norges Bank on behalf of the Government Pension Fund Global bought 0.86 percent ownership stake in Concord Biotech, an Indian biotech pharma business.
Norges Bank bought 8.99 lakh Concord Biotech equity shares at the day’s low price of Rs 900.05 a share, according to exchange bulk deals data. The share buy cost Rs 80.92 crore.
Despite equities market weakness, Concord Biotech rose 27% to Rs 942.8 on the NSE on its launch.
In other large acquisitions, Morgan Stanley Asia (Singapore) Pte bought 1.65 lakh shares, or 1.24 percent of paid-up equity, in print and publishing solutions provider Repro India at Rs 800 per share. The shares fell 0.6 percent to Rs 829.3.
Global Surfaces, an engineered quartz stone producer, rose 4% to Rs 182.70 on August 18. European financial services group Societe Generale acquired the company’s 0.6 percent interest, 2.5 lakh shares. The shares averaged Rs 177 each purchase.
Shriram Properties rose 5% to Rs 73.5, but Bangalore-based Sammy’s Dreamland sold 10.23 lakh equity shares or 0.6 percent of the real estate developer at Rs 73.46 per share.
Sammy’s Dreamland owned 1.33 percent of the company in June 2023.
SJS Enterprises gained 0.8% to Rs 639.65 despite daytime volatility. At Rs 640.01 per share, ace investor Ashish Kacholia sold 1.8 lakh shares, or 0.58 percent of the aesthetics solutions supplier.
Kacholia owned 4.34 percent of the company in June 2023.
Sterling and Wilson Renewable Energy rose 3% to Rs 372 despite promoter Khurshed Yazdi Daruvala selling 1.05 percent.
Khurshed sold 10 lakh shares at Rs 345.34 and 10 lakh at Rs 345.04. He owned 2.87 percent of the corporation in June 2023.
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