The Indian stock markets advanced during the week on positive global stocks. The Reserve Bank of India kept the key interest rates unchanged maintaining its accommodative stance. The overall market sentiment remained positive as investors grew hopeful that the Omicron coronavirus variant would be less disruptive for the global economy than initially feared.
The Nifty 50 Index jumped 314.6 points or 1.83% to settle at 17,511.30 while the BSE Sensex closed the week at 58,786.67, bouncing back by rising 1,090.21 points or 1.89%. Bank Nifty rose 2.51% as well, closing 908.50 points up at 37,105.65. Nifty PSU Bank index gained 6.18% closing at 2,796.45.
On the sectoral front, media, metal, and realty were the top gainers climbing up 9.13%, 4.94% and 4.65% respectively while pharma, IT and FMCG ended with minor gains of 0.02%, 0.25%, and 1.84% respectively.
🔭 Market Outlook
If we look at the daily chart of Nifty which is still trading below the level of short-term moving averages but holding the level of 100 SMA. On the weekly front, the index has made a “Hammer” candle and is trading near the level of short-term moving average. If you combine both the data points, it seems that Nifty may consolidate further, and the stock-specific rally may continue especially in the mid-cap front. To witness bounce back towards 17,800 and 17,950 levels, Nifty will have to cross the 17,620 level. On the downside, if it goes below 17,400 then it can touch 17,320 and 17,200 levels.
Bank Nifty Outlook
On the daily chart, you can see the Bank Nifty is trading near the 200 SMA and on the weekly chart the index has made “Doji” candle. When you combine both the data points, you can see that the Bank Nifty is showing signs of weakness compared to Nifty.
This week Bank Nifty closed at 36,353 levels. In the coming trading session if it holds below 36,050 then weakness could take it to 35,700 and 35,300 levels, whereas minor resistance on the upside is capped around 36,800-36,950 levels.
💰 Stocks to watch
CMP 940, TGT 990/1018, SL 900
Tata Chemicals is witnessing a Bullish Piercing Line candlestick formation followed by the green candle on its previous horizontal trendline support of 830. The stock has corrected significantly from the high of ₹1,158 to ₹828 in the last two months, a difference of 338pts.
On an upside violation of 960 level on the charts, it looks like the stock will reclaim its immediate high of 1,018 levels. Leading Indicator RSI at 56 shows further strength in the counter. We recommend a buy on TataChem at the current price level of ₹940, with a target of ₹990-1,018. However, make sure to maintain a stop loss at ₹900.
Buy Dixon Technologies
CMP 5544, TGT 6200/6400, SL 5150 Duration 5-6 Weeks Dixon Technologies’ stock is in an upward trend and is witnessing descending triangle breakout on the weekly chart. The stock is trading above all its moving averages on a daily and weekly chart. Indicator RSI and MACD is also showing strength for northward direction. We recommend a buy on the stock at ₹5,544 levels with a target of ₹6,200-₹6,4400, while maintaining a stop loss at ₹5,150.
📺 Quick bites
Few headlines that should be on your radar
- India’s industrial output climbs 3.2% in October. Mining output during October 2021 rose by 11.4%, whereas manufacturing sector output jumped 2%. Electricity generation grew 3.1% in October.
- Foreign portfolio investors (FPIs) continue to offload Indians tocks. In December so far, they net sold stocks worth ₹16,356 crore ($2.2 billion), a third straight month of foreign fund outflow, provisional exchange data shows. In October 2021, FPIs were net sellers to the tune of Rs 13,550 crore, and Rs 5,945 crore in November.
- Retail sales of passenger vehicles (PVs) continue to face the brunt of chip shortage. The PV sales fell 19% in November 2021 to 2,40,234 units as compared to the same month last year, as per data by FADA.
- HFCL closed its qualified institutional placement issue. It raised ₹600 crores by allocating nearly 8.72 crore equity shares at issue price of ₹68.75 a piece.
- The RBI’s Monetary Policy Committee decided to keep the key rates unchanged, for the ninth time in a row. The repo rate is at 4%. The reverse repo rate has been kept at 3.35% while the Marginal Standing Facility (MSF) rate is at 4.25%. Central bank maintains FY22 GDP forecast at 9.5% and projected retail inflation to be at 5.3%.
- TVS Motor Company has tied up with Grupo Q for Nicaragua and Costa Rica markets in order to further expand its business in Central America.
- Jindal Steel & Power’s steel production increased by 10% year on year to 6.74 lakh tonnes.
- Indian Oil Corporation (IOC) has renewed a deal to buy up to 2 million tonnes of crude oil in 2022 from Russia’s Rosneft.
- Abu Dhabi state-owned Chemicals Derivatives Company and Reliance Industries have agreed to start a more than $2 billion chemical production partnership in Ruwais, Abu Dhabi
- As per Minister of State for Civil Aviation V K Singh, airlines and airports in the country incurred an estimated loss of ₹19,564 crore and ₹5,116 crore respectively in 2020-21.
- Tata Motors will be hiking the prices of its commercial vehicles from January 1, 2022.
- Axis Bank and Kotak Mahindra Bank have emerged as the top contenders to acquire Citi India’s retail assets.
🚀 IPO Corner
- The RBI has proposed to increase the UPI transaction limit for investing in IPOs to Rs 5 lakh from its current limit of ₹2 lakh.
- Medplus Health Services Limited IPO Date: 13 Dec to 15 Dec Price Band: ₹780-796 Issue Size: ₹1,398 Cr
- Data Patterns (India) Limited IPO Date: 14 Dec to 16 Dec Price Band: ₹555-585 Issue Size: ₹588 Cr
- HP Adhesives Limited IPO Date: 15 Dec to 17 Dec Price Band: ₹262-274 Issue Size: ₹125.96 Cr
- Rategain Travel Technologies Limited IPO Date: 07 Dec to 09 Dec Price Band: ₹405-425 Issue Size: ₹1,336 Cr
- Rakesh Jhunjhunwala-backed Star Health IPO sees tepid debut; the stock lists at ₹845 per share on NSE, a 6% discount over its issue price of ₹900.
- Shriram Properties IPO was subscribed 4.60 times at the end of Day 3 of bidding.
- C.E. Info systems limited (MapmyIndia) IPO was subscribed 6.16 times at the end of Day 2 of bidding.
- Metro Brands IPO was subscribed 27% at the end of Day 3 of bidding.
💸 Mutual Fund Corner
- Net inflows into equity and equity-linked mutual fund schemes rose to ₹11,614.73 crore in November, according to data released by the Association of Mutual Funds in India (AMFI). This was the highest in 4 months and also the ninth month of consecutive inflows into equity funds. The debt segment saw net inflows at Rs 14,893.08 crore.
- The number of mutual fund SIP accounts stood at 4.78 crore on November 30, as compared to 4.64 crore in the month before that.
🔌EV and Sustainability Corner
- Jio-bp, a joint venture of Reliance Industries and BP of the UK, has signed an agreement with the Mahindra Group to explore EV and low-carbon solutions.
- Tata Motors to invest over $1 billion in CV business in next 4-5 years, with electric vehicles at its core. Tata Motors wants to lead and drive electrification in the marketplace just as it did with the conventional powertrains in the past, said Girish Wagh, executive director – commercial vehicle business at Tata Motors.
- SAIL issues a tender for 4 MW floating solar project in West Bengal. The company is inviting bids to develop a 4 MW floating solar project on a turnkey basis at its IISCO Steel Plant in Paschim Bardhaman district.
- Niti Aayog directs RBI to categorise loans to electric vehicles as Priority Sector Lending (PSL) segment. Rattanindia Enterprises Ltd. stock climbed in the opening trade by 4.4% at Rs44.70 on the BSE on the news announcement on Dec, 7th.
- Uttar Pradesh (255,700) has the highest registered electric vehicles, followed by Delhi (125,347) and Karnataka (72,544), Bihar (58,014) and Maharashtra (52,506), according to an announcement by Road Transport and Highways Minister, Mr. Nitin Gadkari.
That’s all for this week’s market wrap-up. We will be back with new market insights next week!