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Hans India
a day ago
- Business
- Hans India
RBI repo cut sparks rally; Benchmarks eye new highs
C Kutumba RaoDespite global headwinds and renewed FII selling; supported by strong DIIs buying and positive domestic GDP data and RBI cut of the repo rate by 50 bps to 5.50% and CRR by 100bps to 3%; markets closed the week ended on optimistic note. For the week, the Sensex added 737.98 points or 0.9 per cent to finish at 82,188.99, and the Nifty jumped 252.35 points or 1.01 per cent to end at 25,003.05. Broader markets outperformed the benchmark indices with both the BSE Mid-cap Index and the BSE Small-cap rising over 2 per cent. FIIs remained net sellers in the third consecutive week as they sold equities worth Rs 3,565.88 crore. On the other hand, DIIs continued their buying in the seventh consecutive week with purchases worth Rs 25,513.43 crore. The Indian rupee ended marginally lower against the US dollar as domestic currency finished at 85.63 per dollar. A dovish RBI surprised markets with a 50-basis point (bp) cut to the repo rate and a 100-bp reduction in the cash reserve ratio (CRR). This follows earlier repo rate cuts of 25 bps each in February and April. Bolstered by supportive macro indicators such as strong Q4 GDP, GST collection, and a favourable monsoon, market forecasters expect benchmark indices to cross historic highs well before Diwali. DIIs buying was focused on domestically oriented and interest-sensitive sectors such as Financials, Real Estate, Retail and FMCG. In the US markets, despite a mildly positive bias from strong US job data and expectations of easing US-China trade tensions; the big headline has been the spat or breakup between Elon Musk and Donald Trump. There are many things that could happen. Let us see how it pans out. Weakness in Tesla shares showcase vulnerability of 'politically tainted' stocks. With PM Modi accepting invite to attend the G7 Summit; and the summit expected to deliberate several key issues in the backdrop of Trump's tariff wars; it would be wise to track developments at G7 summit. Too many investors become obsessed with being right, even when the gains are small. Winning big and cutting your losses when you're wrong is more important than being right. FUTURES & OPTIONS / SECTOR WATCH Spurred by the RBI's 50 basis point rate cut, derivative segment witnessed spike in trading volumes. Nifty rose over 1%, while Bank Nifty outperformed with gains of around 1.5%. Among sectors, Realty, Capital Markets and NBFCs led the gains. In the Options segment, prominent Call open interest for the Nifty was seen at the 25,000 and 25,500 strikes, while the notable Put open interest was at the 25,000 and 24,800 strikes. For the Bank Nifty, the prominent Call open interest was seen at the 56,000 and 57,000 strikes, whereas notable Put open interest was at the 56,000 strike. Implied volatility (IV) for Nifty's Call options settled at 14.38%, while Put options concluded at 15.41%. The India VIX, a key market volatility indicator, closed the week at 15.08%. The Put-Call Ratio Open Interest (PCR OI) for the week was 1.03. Nifty is currently positioned at the upper band of the consolidation range of 24,400–25,100. Chartists expect the Nifty to move above the upper band of the range and head higher towards the immediate resistances of 25,250 and then 25,500 in the coming weeks. Any dips should be viewed as a buying opportunity, with key short-term supports placed at 24,700 and 24,400. A Traders in stock futures would do well to track the flurry of corporate actions lined up this week, including record dates for dividends, stock splits, rights issues, and bonus shares. Close watch is warranted in the five Tata Group stocks and five Adani Group stocks that will trade ex-dividend this week. Stocks looking good are Fortis, HDFC AMC, Indian Bank, PNB Hsg, PPL Pharma, Shriram Finance, and Unominda. Stocks looking weak are Biocon, BDL, Colgate, KPIT Tech, Kaynes, Mankind and Tata Technologies. (The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)
Hans India
28-04-2025
- Business
- Hans India
Investors chary of next direction on rising uncertainty
Fuelled by hopes for a de-escalation in President Trump's tariff battle with China, plus his retreat from threats to oust Federal Reserve Chair JeromePowell, expectations of a positive outcome from US-India trade talks, persistent FII buying, mixed Q4 earnings and geopolitical tensions post-Pahalgam terror attack; the Indian equity market extended the gains for the second consecutive week. For the week, BSE Sensex index added 659.33points or 0.83 per cent to close at 79,212.53, and Nifty rose 187.7 points or 0.78 per cent to close at 24,039.35. Broader market continued to exhibit caution and both the BSE Mid-cap Index and the BSE Small-cap indexended with marginal gains during the week ended. It is pertinent to observe that in the month of April till now, both the main indices rose more than two per cent each. Among sectors, the Nifty Information Technology index rose 6.5 per cent, the Nifty Auto index added 3 per cent, Nifty Realty and Pharma indices rose 1.6 per cent each. The FIIs extended their buying in the second week with purchases worth Rs17,796.39 crore, while DIIs bought equities worth Rs1,131.81 crore. The Indian rupee ended marginally lower against the US dollar at 85.44 per dollar. Lower growth forecast by IMF was a dampener. The markets are expected to remain jittery in the coming week as the chorus on taking some deterrent action on Pakistan, grows. Therehave been calls for conducting a military strike in Pakistani territory, similarto the one done in 2019. Indian stock markets fell on last Friday as thetension weighed on the domestic stock markets. The nuclear-armed nationshave already unleashed a slew of measures against each other. Themarkets will also take cues from the earnings of Reliance Industries (RIL), which announced its Q4 results over the weekend. Gold has been on thebullish territory in the last six years gaining more than 150 per cent. Amongall asset classes, Gold has been in stellar form and is still up by nearly 24 per centthis year despite the previous week's fall. While gold is trading in anoverbought zone, Trump tariff news flow, the India-Pakistan geo politicalsituation and rupee weakness could keep the prices steady and on the up. Some of the big results expected during the coming week include TVS Motor, UltraTech Cement, Ambuja Cements, Bajaj Finserv, Bajaj Finance,Bharat Petroleum Corporation, Trent, Vedanta, Avenue Supermarts, Kotak Mahindra Bank, Adani Power, Adani Green Energy, Adani Total Gas coming week is truncated, with Thursday being a trading holiday onaccount of Maharashtra Day. That is another testament to the fact that investing without education andresearch will ultimately lead to regrettable investment decisions. Research ismuch more than just listening to popular opinion. F&O/ SECTOR WATCH Spooked by the rise in geopolitical tensions after the terror attack in Pahalgam, the Indian market faced pressure at higher levels and closedwith minor gains during the settlement week. Rollovers in Nifty futures were modestly higher at 79 per cent (last month 76%), in line with 3-month average of 80 per cent. In contrast, Bank Nifty rollovers stand at 75.05 per cent, down from 76.98 per cent last month and below the three-month average of 79.25 per cent, reflectingcomparatively weaker momentum. On other hand, market wide rolloversstood at 89 per cent (last month's market wide 90 per cent). Looking at Nifty's option data,the highest Call Open Interest was observed at the 24,500 and 24,200 strikes, while Put writers were active at the 24,000 and 23,800 strikes. Implied Volatility (IV) for Nifty's Call options settled at 15.03 per cent, while Put options concluded at 15.94 per cent. The India VIX, a key indicator of market volatility, concluded the week at 16.25 per cent. The Put-Call Ratio of Open Interest(PCR OI) stood at 1.49 for the week. Nifty positions were mostly carried forward around the 24,200–24,250 futures range, while Bank Nifty rollovers were concentrated between 55,300–55,400. A breach of these levels may lead to downside pressure in both indices. Overall, the zone of 24,050-23,900 is a crucial support zone for Nifty. If the level of 23,900 is violated, it can lead to incremental weakness. Traders should closely monitor these key zones and Open Interest trends for further cues on market direction. Investors must keep fresh purchases in low-beta stocks that have strong relative strength. With sector rotation visible, a cautious outlook and stock-specific approach is advised. Stocks looking good are Crompton, CDSL, ICICI Lombard, MFSL, Mphasis and Ultratech. Stocks looking weak are Delhivery, IGL, Kalyan Jewellers, Hind Copper and Glenmark. Himadri Speciality Chemical Ltd Himadri Speciality Chemical Ltd is a global specialty chemicalcompany with a focus on research and development (R&D) andsustainability. The company develops raw materials of lithium-ion batteryvalue chain. It is primarily engaged in the manufacturing of carbon materials and chemicals. Its segments include carbon materials and chemicals, and power. Its diverse product portfolio includes specialty carbon black, coal tarpitch, refined naphthalene, advance materials, sulphonated naphthalene formaldehyde (SNF), specialty oils, power and others catering to variousindustries such as lithium-ion batteries, paints, plastics, tires, aluminum, graphite electrodes, agrochemicals, defence and construction chemicals. Itsproduct offerings include anode materials, silicon-based anode materials,cathode materials, graphene, hybrid polycarboxylate ether, and COLORX. Itoperates in both domestic and international markets, exporting toapproximately 54 countries across the globe. Accumulate at current levels for medium-term target of Rs700. (The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)
