Markets Weekly: Stocks To Look Out For Next Week; Reliance, Paytm Aditya Birla & Others In Focus

Dalal Street gained for the 12th straight day, its longest winning streak in over three decades and the Nifty & the Sensex gained for the third straight week, its biggest weekly gain in 2 months. 

NSE Nifty

What a week it has been for the markets. It was a phenomenon, the kind of run up that we saw and every point in time one would have expected a sell-off to come through but it just didn’t so it was a spectacular week but it was more of a large cap driven rally.

Coming to the market outlook now, the Nifty Index opened the gap up by more than 100 points and after it touched a lifetime high of 25,268, it remained consolidative in a range for the rest of the day. It formed a small-bodied candle on the daily frame and gave the highest-ever close.

The index has been shifting its base higher gradually and making higher highs from the last five sessions. It has given a decisive breakout on a weekly basis with a strong bullish candle and closed near its higher band with higher highs - higher lows sequence from the last three weeks.

Now it has to continue to hold above 25,100 zones for an up move towards 25,350 then 25,500 levels while support is seen at 25,000 then 24,850 zones.

India VIX was down by 2.86 per cent from 13.79 to 13.39 levels. Volatility has been cooling off from higher zones and supporting the bullish market stance.

On option front, Maximum Call OI is at 26,000 then 26,500 strike, while Maximum Put OI is at 25,000 then 24,000 strike. Call writing is seen at 25,800 then 25,500 strikes, while Put writing is seen at 25,200 strike. Option data suggests a broader trading range in between 24,800 to 25,700 zones while an immediate range between 25,000 to 25,600 levels.

Nifty Bank

The Bank Nifty Index opened on a positive note with gains of around 250 points but remained consolidative in a narrow range of 150 points for the entire trading session. It formed a small-bodied candle on a daily scale, as momentum is missing at higher zones but multiple supports are intact at lower levels.

On a weekly scale, it formed a small bullish candle and has started to form higher lows from the last two weeks. Now it has to continue to hold above 51000 zones for an up move towards 51,750 then 52,000 levels, while on the downside support is seen at 51,000 then 50,800 zones.

The Fin Nifty Index opened on a positive note but it failed to sustain at higher levels as the index drifted towards the 23,600 zone. However, it had a gradual recovery from the low only to give it all away in last hour of trade. It formed a bearish candle on the daily scale as momentum is missing at higher levels.

On the weekly scale, it has formed a bullish candle as it continued with higher -high higher - low sequence of past three weeks. Now it has to continue to hold above 23,550 zones for a bounce towards 23,750 then 23,850 levels while support is seen at 23,550 then 23,450 zones.

Nifty future closed positive with gains of 0.53 per cent at 25,398 levels. Positive setup seen in UPL, MCX, Oberoirlty, Indus Tower, Glenmark, Alkem, Cipla, Gail, TVS Motor, Syngene, Crompton, Bajaj Finance, Divislab, Persistent, Bhartiartl, Heromotoco, Drreddy, Granules, Sun Pharma, Tatacomm, Apollo Hospital, NTPC, ICICI Pru, Coforge and Bajaj Auto while weakness in Federal Bank, ABFRL, Astral, NMDC and Aarti Ind. 

How Did the Markets Fare Last Week?

On a weekly basis, which ended on Friday, the Indian benchmark indices ended in green. Sensex and Nifty were up more than 1.5 per cent each, while Midcaps too were up around 1.5 per cent

What Might Keep the Markets Busy Into the Next Week?

As the market continues to consolidate at higher levels, the benchmark indices look for global and local macro cues for further direction. On the domestic front, the GDP growth for Q1 FY25, FX Reserves, Infrastructure Output, HSBC Manufacturing, and Composite & Services PMI will be monitored closely.

Globally, we have Initial Jobless Claims, S&P Global Composite & Services PMI, Nonfarm Productivity, Fed’s Beige Book, JOLTS Job Openings, Personal Consumption Expenditure, ISM Manufacturing & Services PMI, etc., which will keep investors busy.     

Crude and FII Flows

Brent crude oil prices trade below USD 80/bbl on rising oil supply and poor China demand. On the other hand, FIIs were net buyers for the week.

Sector in Focus

IT, pharma and auto remained in focus during the week.

ICICI PRULI - TECHNICAL CALL OF THE WEEK

Price has broken out on the upside from an ascending triangle with higher-than-average buying volumes.

The ROC momentum indicator has been heading up which confirms the bullish momentum.

Buy ICICI Prudential CMP 753 SL 730 TGT 800

Stocks That Made Headlines During The week

ITI Ltd:

• ITI Limited has bagged its first Electronic Voting Machine (EVM) order from the State Election Commission (SEC) of West Bengal for the supply of 500 sets of Electronic Voting Machines after the successful demonstration to the SEC at Kolkata. 

Jai Corp:

• The Board at its meeting held on 29th August 2024 approved the proposal for buyback of up to 29,44,415 fully paid-up equity shares of face value Rs 1 each by the company representing up to 1.65% of the total number of Equity Shares, at a price of Rs 400 per equity share payable at cash for a total consideration not exceeding Rs Rs. 117.77 crore. 

Infosys:

• Infosys announced the expansion of its collaboration with NVIDIA for AIpowered, customer-centric solutions to drive innovation and operational excellence for telcos.

• Leveraging Infosys Topaz, an AI-first set of services, solutions, and platforms using generative AI technologies, the collaboration will help telcos enhance their customer experiences, streamline network operations, and accelerate service delivery.

NBCC:

• NBCC sells 100 per cent office/commercial space worth Rs 14,800 crore approx. since inception for a self- sustainable 7 GPRA colony at New Delhi. The company sold 100 per cent office space at WTC, Nauroji Nagar, New Delhi valuing Rs. 13,408.7 crore and 100 per cent retail and commercial space at Downtown, Sarojini Nagar, New Delhi valuing Rs 1,390.92 crore.

• The sale marks a significant milestone for the company and demonstrates the exceptional demand for premium commercial space in India's capital.

HUDCO:

• HUDCO has received the Certificate of Registration as Non-Banking Financial Company – Infrastructure Finance Company (“NBFC- IFC”), from Reserve Bank of India. IFC status allows higher exposure limits to the company for financing to various infrastructure sectors in addition to housing. 

• These funds will help HUDCO's aim to support the expansion of its social housing platform in addition to enhancing the quality of life for the Indian community and urban infrastructure.

Paytm:

• Paytm Payments Services Limited (PPSL), a wholly owned subsidiary of One 97 Communications Limited (OCL or the Company) has received approval from the Government of India, Ministry of Finance, Department of Financial Services, on 27th August 2024, for downstream investment from the Company into PPSL.

• With this approval in place, PPSL will proceed to resubmit its payment aggregator (PA) application. In the meantime, PPSL will continue to provide online payment aggregation services to existing partners.

Reliance Industries:

• The competition commission of India (CCI) has approved the Reliance-Disney deal. CCI has approved the merger of Reliance Industries, Viacom18 Media, Digital18 Media, Star India & Star Television.  In this, Reliance Industries, Viacom18 & Disney India to form a Joint Venture while Viacom18 will be merged into Star India. The transaction is expected to be completed in the last quarter of CY24 or first quarter of CY25.

• Reliance Industries will invest Rs 11,500 crore into the Joint Venture and this Joint Venture will be controlled by Reliance Industries and it will own 16.34 per cent stake. Viacom18 will be owned by 46.82 per cent while the remaining 36.84 per cent stake by Disney.

• The Reliance Industries - Disney Joint Venture values Disney India at around USD 3.5 billion as compared to an earlier estimated value of USD 15 billion. 

NLC India:

• NLC lndia has signed Power Usage Agreement at Hyderabad, with Telangana State DISCOMs for 200 MW Solar Power at a competitive and affordable price under CPSU scheme for 25 years.

Aditya Birla Capital:

• Aditya Birla Capital (ABCL) has made an investment of Rs 300 crore on rights basis, in the equity shares of Aditya Birla Housing Finance Limited (“ABHFL”). ABHFL being a Wholly Owned Subsidiary, is a related party of the Company. ABCL is the holding company and Promoter of ABHFL. 

• ABHFL belongs to the Housing Finance industry and ABCL is making the investment in ABHFL to meet its growth, funding requirements and improve its leverage ratio.

HCL Tech:

• The management held its analyst day during the week, wherein they sounded confident about maintaining double-digit revenue growth over the medium term, perhaps for the next five years. 

• They said that the addressable IT services market is expanding and the company is well placed because of the investments that they are making in AI, SAP, and Cyber security, etc.

• The management spoke a lot about AI and said that the industry is at the inflection point with rising adoption of AI and in terms of near term trigger, the demand setting is a little more optimistic as they are seeing green shoots of discretionary spending coming back in BFSI.

• To summarise, HCL Tech sounds positive about delivering industry leading double-digit organic revenue growth over the medium term.

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