Thursday promises to be one action-packed day for sure. It would not come as a surprise that the focus shifts away from the Nifty 50 on Thursday towards specific stocks as there is plenty of news-flow to digest, from the biggest FDI transaction to IPOs to earnings and of course, the weekly expiry of the Sensex contracts.
There is a problem with the market. There is absolutely no follow-up. One day the hopes go high, the next day, they fizzle out. Wednesday’s session was no different after the very strong upmove on Tuesday.
Not that the Nifty broke below key support levels or anything as such, but there was no follow-up buying. The bulls fought to defend 22,700 for a better part of the day, but five minutes of intense selling to the index even below the 22,600 mark at one point, before managing to close above that mark.
Here’s the kind of newsflow the market needs to digest tomorrow.
First, of course, is the Fairfax-IDBI Bank deal, the impact on the stock, as well as on the stock of CSB Bank, whose promoter currently is Fairfax.
Second is the fact that primary market activity will be buzzing again, Four IPOs open for subscription today with companies looking to raise a sum of over ₹8,000 crore.
Third is the mega Jio Platforms IPO, whose price band will be released. The company plans to issue 27 crore fresh equity shares as part of the issue, with quotas for existing shareholders of Reliance Industries and eligible employees of the company as well. In case Reliance Industries does see a stock reaction to these developments, the Nifty will see moves as well.
And lastly, earnings. Plenty reported after market hours on Wednesday and plenty to be reported on Thursday.
HDB Financial Services, Bajaj Consumer Care, CEAT, ICICI Lombard, MRPL, Tata Technologies, Emmvee Photovoltaic are some of the stocks that will be reacting to their results that were declared after market hours on Wednesday.
Thursday’s session will see at least 25 important results that will be reported during the course of the day. Names such as 360 ONE WAM, Angel One, HDFC AMC, HDFC Life Insurance, IIFL Finance, IRFC, Jio Financial Services, L&T Finance, Nestle India, Persistent Systems, Polycab, South Indian Bank, Sterling & Wilson Renewables, Tata Communications, Tech Mahindra & Wipro will be coming out with their numbers.
With the Nifty having found a floor at the 22,550 level on Wednesday, that will be the most important level to watch on the downside going into the Sensex expiry session. On the upside, the 22,750 – 22,800 zone could present some supply but a move above those levels, can open the door towards the 23,000 mark.
Nagraj Shetti of HDFC Securities said that Nifty is currently placed at the crucial resistance of 22,700 – 22,800 and a decisive breakout above that level could open further short-covering towards the 23,100 – 23,200 mark. Any weakness from here could find support at 22,300, he added.
Ajit Mishra of Religare Broking has a cautious stance on the index as the 22,850 level or the 20-DEMA is the most important hurdle to watch on the upside, followed by the 23,000 – 23,200 zone. On the downside, 23,200 – 23,400 zone could be some support. He advises remaining selective, stock specific and have disciplined risk management in this market.
With IT stocks grabbing the spotlight over the last two sessions, the Nifty Bank has taken a bit of a backseat. Although similar to the Nifty, the index also remained rangebound on Wednesday, continuing to find supply at the 55,500 mark, and managing to defend lower levels and close above the 55,000 mark. That remains the range for the Nifty Bank going into Thursday’s session as well.
Om Mehra of SAMCO Securities has observed fresh call writing at the 55,500 and 56,000 levels for the Nifty Bank, indicating that they remain the biggest hurdles to the Nifty Bank upside. While 55,000, with the highest Put Open Interest, remains a key base. Below 55,000, 54,900 is the next immediate support, while on the upside, 55,700 will be an additional hurdle, in case 55,500 is crossed.
The Nifty Bank will continue to consolidate until a decisive breakout in either direction emerges, according to Sudeep Shah of SBI Securities. In case the Nifty Bank breaks the immediate support of 54,900 – 54,800 zone, it could trigger further selling towards the 54,400 mark on the downside, while a move above the 55,800 – 55,900 resistance zone, can take the index to 56,300 on the upside.
With the Nifty having found a floor at the 22,550 level on Wednesday, that will be the most important level to watch on the downside going into the Sensex expiry session. On the upside, the 22,750 – 22,800 zone could present some supply but a move above those levels, can open the door towards the 23,000 mark.
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