Supported by the decline in corona cases, the easing of foreclosure restrictions in the country, renewed purchases from FIIs and positive global signals; the markets enjoyed their winning streak for the fourth week in a row.
BSE Sensex hit a new all-time high on Friday, up 374.71 points to 52,474.76, while Nifty gained 129.10 points to close at 15,799.35, during the week. Larger markets outperformed relatively, with the BSE midcap and smallcap indices advancing by 2% and 3.5% respectively. 77% of the stocks in which retail investors increased their participation at the end of March 2021 come from the medium and small cap space.
The GST Council has reduced the levy on several products used for the treatment of Covid-19 – ranging from key drugs and oxygen to hand sanitizers, pulse oximeters and ambulances – while leaving the rate of vaccines unchanged at five percent.
The new tariffs will be applicable for a limited period – until September. IIP growth technically jumped 134% year-on-year in April, mainly due to the base effect. According to data from the National Statistics Office (NSO), the industrial production index jumped to 126.6 in April 2021, from 54.0 in the same month last year, when the national lockdown interrupted the production in most units.
CPI and WPI inflation for May will be released on Monday, while trade balance data for May will be released on Tuesday. The US FOMC meeting is a big event for world markets in the coming week.
While the Fed is not supposed to take action, adjustments in interest rate forecasts are likely. It is relevant to observe that the benchmark 10-year Treasury bill yield closed below 1.5%, its lowest level in more than three months, dragged down by lukewarm economic data and strong demand from investors in the United States and elsewhere.
The primary market will be busy next week as four IPOs (initial public offerings) – Shyam Metalics, Sona Comstar, Dodla Dairy and KIMS hospitals are lined up over the coming week, seeking to raise a total of 9,132 crore of the sale of shares. Observers expect silver outflow from the secondary market to the primary market to capitalize on possible price increases.
F&O / SECTOR WATCH
Reflecting the âexuberanceâ of the spot market, the derivatives segment saw strong trading. In the midst of selling episodes, the bulls were able to maintain the momentum of the indices. On the options front, maximum open call interest was seen at 16,000, 15,800 and 16,200 strikes, while maximum open call interest was seen at 15,000 strikes, followed by 15,700 and 15,800 strikes.
Tug-of-war was seen among bulls and bears at 15,800 strikes as callers and wagers were seen adding keen open interest on both sides.
Implied volatility (IV) of call options closed at 13.36 percent while that of puts options closed at 14.31 percent. The week’s Nifty VIX closed at 15.00%. Low levels also suggest some caution in the market, which could lead to a prolonged consolidation of the index.
The week’s OI PCR closed at 1.68. Options data indicated that Nifty could see an immediate trading range of 15,500 to 16,000 levels in the coming days.
Intraday volumes have dried up, either due to maximum margin requirements or the lack of confidence of retail participants at current market levels. More and more movements specific to equities justify very effective risk management by market players.
Put trailing stop-losses, as vigilant protection of profits at current and above levels. Metallurgical companies are expected to experience better earnings and capacity utilization levels over the next few quarters of FY22, mainly due to strong steel prices.
The Adani group is expected to raise $ 500 million through a private placement of shares in Adani Airports Holdings before a possible initial public offering and is targeting a valuation of Rs 25,500 to 29,200 crore (3.5 to 4 billion crore). dollars) for the company.
The futures contracts that look good are GMR Infra, Jindal Steel, REC, TCS, L&T Technology, UBL, and Zee Entertainment. The seemingly weak stock futures are Amaraja, CUB, Granules, Escorts, Exide Inds and Petronet.
(The author is a stock market expert. He is the former vice-chairman of the AP Planning Board)
Just Dial Limited is a local search engine company. The company provides research and related services. It is also engaged in other information service activities. The company offers its services on various platforms, such as voice, web, mobile internet and mobile applications. It provides research and transaction services in various categories and platforms, as well as JD Omni services to its clients. It operates in India and outside India.
Why we recommend
1. Advantage of leading player in the Indian local search market. Strong brand awareness with 129.1 million unique quarterly visitors ^ in Q4 FY21 (132.6 million in Q3 FY21)
2. The digitization of the economy after the corona pandemic is very positive for companies like Just Dial.
3. Likely candidate for takeover. Big players like Tata, RIL and others are said to have shown great interest in the company.
Buy between Rs975-985 for a target price of Rs2000 within 12-18 months. Since the stock has had a good rally lately, the stock loss should be slightly large at Rs850.
VA Tech Wabag Limited is a company active in the field of water treatment. The main activities of the company include the design, supply, installation, construction and operational management of drinking water, wastewater treatment, industrial water treatment and desalination plants. The segments of society include India and the rest of the world.
The company has four clusters: India, Europe, Middle East and Africa (MEA) and Latin America (LATAM). The Indian cluster provides end-to-end water solutions for drinking water and sanitation plants, both in the municipal and industrial sectors. The European cluster hosts small and medium-sized projects.
Why we recommend
1. The 50 best private water operators in the world WABAG is ranked 4th in the world by GWI for the guarantee of safe and clean drinking water and sanitation.
2. Offer covering municipal drinking water, municipal wastewater, industry
water, industrial effluents, desalination and recycling.
3. Technology-driven company – owns more than 90 intellectual property rights.
4. Significant reduction in debt across the Group â¢ 33% reduction in gross debt during fiscal year 21 â¢ Change from net debt to net cash during fiscal year 21.
Buy between Rs 285 and 295 for a target price of Rs 500 in 9 to 12 months. Keep the stop loss below Rs250.