In this week’s newsletter:
- Markets this week
- Market Outlook: Nifty & Bank Nifty Outlook
- Stock Recommendations
- Quick bites: Key News Last Week
- Electric Vehicles and Sustainability Weekly Update: Latest news
- Gold Bond Issue
The key benchmark indices rallied in the first week of the New Year. the 50-share Nifty index gained 458.65 points, or 2.64%, to 17,812.70 for the week ended January 7 while BSE Sensex advanced 1,490.83 points, or 2.56%, to settle at 59,744.65, during the same period.
As many as 39 stocks in the Nifty index settled the week in the green. Grasim Industries and ONGC advanced the most both gaining over 10% followed by Bajaj Finance (up 9.78%), Eicher Motors (up 8.97%), Bajaj Finserv (up 8.23%), and Axis Bank (up 7.67%).On the other hand, Tech Mahindra, Dr. Reddy’s Laboratories, Infosys, Divi’s Laboratories, and Cipla declined each over 3%.
Maruti Suzuki India jumped 6.21%. The car major recorded total sales of 1,53,149 units in December 2021, down 4% YoY, while its overall production fell 2% in the same period. Tata Motors, on the contrary, recorded a 24% YoY growth in sales numbers after the company sold 66,307 units in the last month of 2021. Sales of electric two-wheelers more than doubled in 2021 thanks to the subsidies and government push.
Markets this week
The coming week will be driven by the earnings releases (particularly the IT sector), macroeconomic data points like inflation, and the Covid-19 situation. IT major Infosys, Tata Consultancy Services, and Wipro will announce their Q3 results on January 12. On the same day, Consumer Price Index (CPI) is also scheduled to release. You should also watch the FII activity for this week.
We are slightly positive on the market outlook unless there is any negative surprise. Our recommendation is to use market corrections as an opportunity to invest in fundamentally strong companies. We would advise remaining selective on the sectors. BFSI sector looks positive and we believe one can add good stocks on every dip. LIC housing looks interesting at current levels.
As always, you have to be very selective about the stocks you pick.
|10th Jan||5Paisa Capital Limited, Vikas Lifecare, GNA Axles, GI Engineering Solutions, Excel Realty N Infra|
|11th Jan||Ganesh Housing Corp, Delta Corp|
|12th Jan||Wipro, TCS, Infosys, Indbank Merchant Banking Services Limited|
|13th Jan||Aditya Birla Money Limited, Surana Solar, Tata Metaliks Limited, GTPL Hathway, CESC, MindTree|
|14th Jan||HCL, Tinplate Company of India, Onward Technologies|
|15th Jan||HDFC Bank|
If we look at the daily chart of Nifty, a crossover of moving averages is visible and on the weekly front index has given consolidation breakout, indicating that investors should follow the buy on dips strategy. For the Nifty to bounce towards 17,980 and 18,100 levels, it has to cross the 17,850 level. On the downside support, if it crosses below 17,650 then it can touch 17,500 and 17,350 levels.
Bank Nifty Outlook
On the daily chart, you can see that Bank Nifty is trading near the 200 SMA and on the weekly chart it traded above the short-term moving averages. When you combine both the data points, you can see that the Bank Nifty shows a bullish trend and one can follow buy on dips strategy.
This week Bank Nifty closed at 37,852, compared with 35,674 last week. In the coming trading session if it holds below 37,600 then weakness could take it to 37,250 and 36,900, whereas minor resistance on the upside is capped around 38,450-38,900 levels.
CMP 3853;TGT 3930/3953;SL 3820
The counter is in a strong uptrend and moving above all its moving averages. After two days of correction via indecisive Doji candles, the stock has shown a decisive green candle and has formed a bullish engulfing formation on its 10 day SMA on the daily chart. Leading indicator RSI is showing further strength towards the northward direction. Volumes are also indicating positive movement in the stock. We recommend the stock with a target of ₹3,930 maintaining a strict stop loss at ₹3,820.
BUY JAMNA AUTO
CMP 108.75;TGT 113/114; SL 106
DURATION (1-2 WEEK)
Stock is in an uptrend on weekly and daily timeframes. The counter is trading above all its important moving averages. Leading Indicator RSI at 60.75 showing the strength of upside movement. We recommend the stock with a price target of ₹114 while keeping a strict stop loss at ₹106.
Few Headlines That Should Be on Your Radar
- Avenue Supermarts Ltd (aka D-Mart) reported a 23.71% year-on-year (YoY) increase in consolidated net profit at ₹553 crore for Q3FY2022 as against ₹447 crore in the corresponding quarter last year.Overall consolidated revenue for the quarter jumped 22.22% YoY to ₹9,218 crore. Its PAT margin for Q3 improved to 6%, a rise of 10 basis points over 5.9% in the same quarter last year.
- Inflation hits record high of 5% in 19 EU countries due to higher energy prices.
- Coal India reported a 3.3% rise in coal production to 60.2 million tonnes (MT) for December 2021.
- Eicher Motors reported a 7% increase in total motorcycle sales to 73,739 units for December 2021.
- SBI invested $20 million in payments provider company Pine Labs, ahead of its $100-million IPO in the USA.
- India’s Manufacturing Purchasing Managers’ Index fell to 55.5 in December, according to the data released by IHS Markit. It was 57.6 in November 2021.
- India’s sugar production rose by 4.75% to 115.70 lakh tonne during the October-December period of the 2021-22 season, as per data by sugar cooperatives body NFCSFL.
- Dr. Reddy’s Laboratories plans to launch the generic version of Merck’s antiviral coronavirus pill, Molnupiravir. The antiviral pill will be named ‘Molflu’, and the company will price it at ₹35 per capsule.
- Tata Communications has signed a strategic partnership with Saudi Arabian telco Zain KSA to offer solutions to modernize cities with smart street lighting, smart waste management, connected workplace, healthcare, and connected cars.
- Shriram Transport Finance is planning to raise about $500 million from international investors, making it year’s first offshore bond sale by a non-bank lender.
- Reliance Retail has picked up a 25.8% stake in Bengaluru-based delivery startupDunzowith a₹1,488 crore ($200 million) investment.
- The unemployment rate in India touched a four-month high of 7.9% in December 2021, according to the data published by the Centre for Monitoring India Economy (CMIE).
- NTPC plans to float initial public offerings (IPOs) of its clean energy arm NTPC Renewable Energy (NREL). It is looking for strategic investors ahead of the IPO
🔌EV and Sustainability Corner
- Sales of electric two-wheelers more than doubled in 2021 led by a sharp uptick in demand for high-speed scooters. The overall electric two-wheeler sales stood at 233971 units in 2021.Hero Electric grabbed the leading position in 2021 by selling 46,214 units of electric vehicles, forming 34% of the entire electric two-wheeler industry in India.At the second position stood Okinawa which sold 29,868 electric two-wheelers in 2021 followed by Ather.
- Reliance Industries Ltd.’s Jamnagar refinery to soon get 500 MW renewable power after it receives approval from Central Electricity Regulatory Commission (CERC)for connectivity to the inter-State transmission system (ISTS) for supply of 500 megawatt (MW) renewable energy.
- Mining major Vedanta announced that its aluminium business has entered into a pact with GEAR India to deploy one of the largest fleets of lithium-ion battery-powered electric forklifts in the country.
- EV sales in India are expected to touch 10 lakh units in 2022, mainly driven by electric 2-wheelers, according to the Society of Manufacturers of Electric Vehicles (SMEV). This figure is equal to what was sold collectively in the last 15 years.
- Tata Power leads S&P Global’s ESG Score among its peers in the Indian power sector. It has scored 67 out of 100, which is significantly higher than the average world electric utility sector (comprising both Indian and global electric utilities) score of 38.
- KPIT Technologies has partnered with dSPACE GmbH to offer a comprehensive solutions test suite for smart charging of electric vehicles.
- ETO Motors partners with BSES, Tata Power DDL to set up 3,000 EV charging stations in Delhi-NCR.
- Reliance New Energy Solar Ltd made a payment of ₹1,583 crore to Sterling and Wilson Renewable Energy for acquisition of 25.90% equity in the company.
- Hero Electric has partnered with automotive aftermarket multi-sided platform SpareIt to train private garage owners and use their network as EV service hubs. As part of the collaboration, SpareIt will offer these garages as private garage owners (PGO) for Hero Electric’s B2B and B2C clients.
- Greaves Cotton’s e-two-wheeler arm Ampere inaugurated its first and one-of-a-kind experience centre at Ranipet, Tamil Nadu on Monday.
Sovereign Gold Bonds Issue: Open until 14 Jan 2022
Sovereign Gold Bonds (SGB) – SERIES IX, the smartest way to invest in gold. You not only get the gold returns but also an additional 2.5% annual interest on your gold investment and it is completely secured – issued by the government to India!
- Issue period: 10-14th January
- No Capital Gain Tax on Redemption after 5 years.
- Tenure: 8 years with exit option from 5th year on the interest payment dates.
- No recurring Annual expense
That’s all for this week’s market wrap-up. We will be back with new market insights next week!
Here’s wishing you a happy, healthy, and prosperous 2022!