Bulls Take Charge on last Week of the Year, Key Benchmark Indices Clock 2% Gains

In this week’s newsletter:

• Market Wrap-up
• Bank Nifty Outlook
• Quick Bites
• IPO Updates
• EV and Sustainability Corner

Both Sensex and Nifty recorded gains during the week on positive global cues. Nifty closed the week with a 2.06% gains ending at 17,354.05 up 350.3pts while BSE Sensex ended the week (and the year) at 58,253.82. On a week-on-week basis, Sensex jumped 1,129.51pts or 1.98%. Bank Nifty also recorded 1.79% gains, during the week, ending at 35,481.70.

On the sectoral front, barring Nifty Media, all the sectoral indices ended on a positive note for the week ending 31Dec, with Nifty Healthcare Index clocking the highest gain at 5.52% followed by Nifty Pharma gaining 5.42%. FMCG stocks were also under pressure during the week.

Taking about 2021, Indian stocks ended the year on a strong note with benchmark indices rising over 20% hitting fresh record highs on the back of economic recovery led by government measures and supporting RBI action. Strong retail participation, positive market sentiments, and rapid inoculation drive to overcome the new variant also helped fuel the rally.

How do the markets look going forward?

We don’t have a crystal ball to tell you the future of the markets, however, looking at how things unfolded in 2021, we can say one thing – the markets have proven to be more resilient than what many of us thought.

Having said that, the near-term volatility cannot be ruled out. Most important, Omicron is infecting the population at a fast rate. Fortunately, given the levels of hospitalization, the variant does not appear to be as severe as the previous strain, and vaccines and treatments should help to keep the virus contained. At this juncture, portfolio rebalancing trends seem to favor healthcare, and energy stocks, especially those paying a dividend.

🔭 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 near the downward gap area. When you combine both the data points, you can see that the Bank Nifty is showing more signs of weakness compared to Nifty.

This week Bank Nifty closed at 35,674 levels. In the coming trading session if it holds below 35,400 then weakness could take it to 35,100 and 34,800, whereas minor resistance on the upside is capped around 36,200-36,500 levels.

📺 Quick bites

Few Headlines That Should Be on Your Radar

• RBL Bank’s stock price crashed 20% on Monday, hitting 52-week low, following developments over the weekend owing to the bank’s financial health concerns. RBL Bank’s Vishawvir Ahuja has stepped down as Managing Director and Chief Executive Officer of the bank, and the lender has appointed Rajeev Ahuja as the interim MD and CEO with immediate effect.
• Sun Pharma, Cipla and four other companies have formed a consortium to conduct a trial to test the safety of molnupiravir, a coronavirus antiviral pill that has been given Emergency Use Authorisation by DGCI.
• IndusInd Bank has partnered with the National Payments Corporation of India (NPCI) foroffering real-time cross-border remittances to India using UPI IDs.
• The central government has approved the construction of 1.07 lakh houses in five states – Andhra Pradesh, Madhya Pradesh, Maharashtra, Puducherry and Uttarakhand – under the Pradhan Mantri Awas Yojana (Urban).
• Reliance Energy will acquire Faradion, a sodium ion battery technology provider.
• HCL Tech is buying out the minority stake of 19.6% in HCL Technologies SEP Holdings for $100.2 million.
• AU Small Finance Bank has appointed Harun Rasid Khan as Additional Director of the bank.
• PM Modi announced on Saturday 24Dec, that India will begin vaccinating children between 15-18 years of age from January 3, 2022.
• Adani Group’s bid for Radius Estates, a Mumbai based realty company, has been approved by 80% creditors of Radius Estates. The company owes ₹ 3,000 crores in unpaid dues to its creditors.
• Ratings agency ICRA has revised the telecom sector outlook to `stable’ from `negative’
• Emami Realty’s credit rating of the long-term bank facilities has been upgraded to ‘BBB; Stable’ from ‘BBB-; Stable’ by CARE.
• Raymond has incorporated a step-down subsidiary Ten X Realty (TXRL) to carry out real estate business for the development of land and properties at Thane, Maharashtra.
• Power Grid has approved an investment proposal for the expansion of power grid telecom into data centre business and establishing a data centre at Manesar, Haryana at an estimated cost of about ₹ 322 crore.

🚀 IPO Corner

• SEBI tightens rules for IPO. These rules will aim to tackle volatility on the listing day and address gaps like conditions for the objective of IPO, utilisation of proceeds from the share sales, price bands, anchor investors’ lock-in period and the size of the stake a majority shareholder may sell on listing day. Currently the shareholders can share their entire shareholding through an offer-for-sale (OFS). However, the market regulator has now mandated that shareholders who hold 20% or more cannot exit more than 50% of their stake on listing day.
• Snapdeal has filed preliminary documents for an Initial Public Offering (IPO) to raise ₹1,250 crore.
• IPO listed during the week: HP Adhesives Limited made a strong debut as company’s shares listed at 16% premium over its issue price. Supriya Lifescience Limited made a strong market debut listing at 55% premium over its issue price. CMS Info Systems Limited had made a flat debut as the company’s shares listed at 1.2% premium over its issue price.

🔌EV and Sustainability Corner

• ITC is planning to launch a host of plant-based meat products in anticipation of the burgeoning demand for meat substitutes and vegan meals in India.
• NTPC is reportedly planning to reduce its stake in subsidiary NTPC-Renewable Energy (NREL) to below 50% as it plans to list NREL on the stock markets during the next financial year.
• Bajaj Auto will be investing ₹300 crore for a brand new electric vehicle plant in Akurdi (Pune) that will have a capacity to manufacture 5lacs EV per annum.
• Gensol Engineering, which provides solar energy solutions, has bagged orders to develop 10.7MWp grid-connected ground-mounted and rooftop solar power generating systems worth ₹22.50 crore in December. The company also plans to step up its commitment in the EV segment. Till date, the company has leased out a total of 181 EV Cars to reputed ride-hailing company operating its business in Gurugram, NCR and New Delhi regions. They had plans to add another 67 new EV Cars by the end of December 2021, while massive plans have been firmed up to add another 3000 EV cars to this fleet by the end of 2022.
• Amara Raja Batteries is planning to invest in InoBat Auto, a European technology developer and manufacturer of batteries for e-mobility as part of its Energy & Mobility strategy.
• The Automobile Manufacturers in India have been advised by Union Minister for Road Transport and Highways to start manufacturing Flex Fuel Vehicles (FFV) and Flex Fuel Strong Hybrid Electric Vehicles (FFV-SHEV) complying with BS-6 Norms in a time bound manner within a period of six months.
• Oil India is planning to set up a 100kW green hydrogen manufacturing plant at its Jorhat oilfield in Assam.

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!