Given the steady decline in daily Covid-19 infections, rising hopes for another stimulus package to support the hardest hit sectors in the second wave of Covid, excellent fourth quarter results and positive global indications; the market had a historic week. After more than three months of consolidation, the benchmark indices closed at a record closing high, with the BSE Sensex climbing 882.40 points, or 1.75 percent, to 51,422.88 and the NSE Nifty up 260.35 points, or 1.72 percent 15,435.65 points rose.
The broader markets also gained momentum, but lagged the benchmark indices as the Nifty Midcap 100 index rose 1.1 percent and the Smallcap 100 index rose 1.83 percent. The momentum could stay positive for the coming week amid falling Covid cases, expected state unlock and a likely government stimulus package, with continuity at record highs for the coming week, experts say. In its annual report, the RBI warned of the meteoric rise in share prices at a time when the country’s gross domestic product (GDP) was shrinking.
However, as financial market regulators, both RBI and Sebi need to be aware of the future risk. NSO will publish GDP growth estimates for the March 2021 quarter and preliminary annual estimates for 2020-21 on Monday. The Indian economy is expected to grow rather than shrink from January to March (Q4) of FY2020-21.
Well-known companies such as Aurobindo Pharma, ITC, Motherson Sumi Systems, PVR, Bharat Forge and Bank of India will publish their quarterly results in the coming week.
Heard on the streets: ahead of the monsoons, the revival of so-called small-cap stocks is the latest triumph for retailers long ridiculed as “stupid money”. Many retail investors beat market pros at their own pace. Momentum to invest or buy assets just because the price is rising, which in turn has attracted even more buyers, in part due to a behavior called FOMO (Fear of Missing Out). Retail investors tend to invest far more money in high than low momentum stocks. Don’t buy “cats and dogs” (immature stocks). Remember, good stocks keep coming back – unknown stocks can go away.
Quote of the Week: “I’ll Tell You How To Get Rich. Close the Doors. Be Afraid When Others Are Greedy. Be Greedy When Others Are Afraid” – Warren Buffett. Be ready to invest in a falling market and “exit” a rising market, according to Warren Buffett’s philosophy.
F&O / sector monitoring
During the settlement week, there was brisk trading in the derivatives segment. Aside from the increase in nifty futures rollovers, market-wide rollovers were 93 percent compared to 83 percent in the previous month. Nifty / stock futures also stayed at 0.09 (0.09 last month), suggesting that market participants continue to bet on more individual stocks. Rollover data suggests strength in the automotive, banking & finance, FMCG and IT sectors.
A slight retreat in the meters for metals and pharmaceuticals is likely. The maximum put open interest was 15,300, followed by 15,000, 15,400 and 15,200 strikes, while the maximum call open interest was 16,000 followed by 15,500, 15,600 and 15,800 strikes. Call letters were seen with 16,000, 15,500 and 15,600 strikes, while put letters were seen with 15,400, 15,300 and 15,000 strikes. Volatility fell to its lowest level in 2021, which supports the market’s bullish bias. The Indian VIX declined 8.80 percent from 19.08 to 17.40 on a weekly basis.
The implied volatility (IV) of calls closed at 16.30 percent, while that of put options closed at 17.71 percent. OI’s PCR for the week closed at 1:26 a.m. The general option data suggests that the Nifty could hit a wider trading range of 15,000-15,800 levels in the upcoming sessions.
Zee may climb to new highs in the coming weeks due to increased interest. Good looking stock futures are IGL, L&T Finance, RIL, Shriram Transport, M&M, Voltas, and Zee Entertainment. Weak stock futures are Apollo Hosp, HUL, Navin Flouro, Dr. Lal Path Labs and UBL.
Just Dial Ltd is a local search engine company. The company offers its services on various platforms such as voice, web, mobile internet and mobile applications. It provides search and transaction services for various categories and platforms, as well as JD Omni services for its customers. It offers a range of Search Plus services, including ordering food online, booking a doctor’s appointment online, booking movie tickets online, booking a taxi / flight / bus online, ordering groceries online, arranging a laundry pick-up and a courier pick-up online -up online, at other.
JD Omni is a cloud-based solution that can be accessed via mobile phones and enables business owners to control and monitor functions via a dashboard. It operates in India and outside of India. Sources suggest the company is on the radar of a large commercial building. A possible takeover offer is not excluded. Buy for a medium term goal of Rs 1400.
Shanthi Gears Ltd specializes in the design, manufacture, supply and maintenance of gears and gears. Custom products include idler gears which include spur / spur gear, pinion shaft, internal gearing, worm and gear, straight bevel and spiral bevel gear, and its specialty gears are designed for the cement, mining, energy and steel industries.
It offers various services such as the overhaul of gearboxes and foundries. Its products are used in various industries such as steel, sugar, paper, windmills, shipping, plastics and chemicals. It owns production facilities, foundry facilities, technical facilities, measuring and calibration facilities as well as facilities for quality assurance. Buy on declines for target price of Rs240.
(The author is a stock market expert. He is a former vice chairman of the AP Planning Board)