11.12morning News

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Morning news

【Yesterday review】
India's stock market has hit a new milestone, with its valuation now exceeding $4 trillion,
elevating its global rank to the fourth position. This achievement is attributed to a sustained
equity rally that began in late 2013 and a series of high-value Initial Public Offerings (IPOs). The
Bombay Stock Exchange (BSE) now boasts over 500 companies each valued at more than $1
billion, despite experiencing a market correction in December 2018.
The market's exponential growth trajectory includes a significant leap of over 50% from
December 2014 to December 2017. Additionally, there has been a notable rebound starting late
March of this year. A closer look at the composition of the billion-dollar club reveals that private
sector firms have nearly doubled their presence since December 2014, growing from just under
one-fifth to now more than one-third.
The performance across different segments of the market has varied, with large-cap indexes
showing moderate growth in comparison to their mid- and small-cap counterparts, which have
seen surges of approximately double the rate or more within just one year.
Driving this wealth creation are key sectors such as Finance, which includes nearly fifty firms.
Capital Goods and IT/Pharma each contribute thirty enterprises to the tally, while close to thirty
banking institutions also add to the impressive count. These sectors have collectively propelled
the Indian stock market to new heights, reflecting the country's robust economic progress and
investor confidence
【Today's news】
Dec 10 (IANS) In the upcoming data-centric week, the focus will be on crucial releases,
including inflation data from India and the US, says Vinod Nair, Head of Research at Geojit
Financial Services.Indian inflation is expected to rise, while US inflation will remain steady.
Indian industrial and manufacturing production is also expected, while consensus expects
expansion. However, the outcome of the awaited Fed policy meeting will be pivotal in shaping
market sentiments, he said.
The Indian market achieved an all-time high, driven by robust domestic GDP growth. Despite
the RBI maintaining policy status quo, an upgraded GDP growth forecast for FY24 (6.5 per cent
to 7 per cent) boosted investor confidence. Measures to address the liquidity deficit, including
the reversal of SDF & MDF facilities, positively impacted financials, leading to a 5 per cent gain
in Nifty Bank for the week, he said.
IT, consumer, auto, and realty sectors performed well due to valuation comfort, festive
momentum, and a strong uptick in residential sales. Mid & small-caps continued to outperform,
driven by a healthy economic outlook, strong Q2 earnings, and corrections in oil prices, he said.
Amol Athawale, Vice President - Technical Research, Kotak Securities said in last week, the
benchmark indices witnessed stellar rally, the nifty ended 3.47 per cent while the Sensex gained
over 2,340 points. Among sectors, almost all the major sectoral indices registered a positive
momentum but Energy index outperformed, rallied nearly 8 per cent. During the Last week, the
Nifty/ Sensex successfully surpassed the important resistance of 20,200 / 68,000 and post
breakout it intensified the positive momentum.
In economic news, RBI in its bi-monthly policy review meeting kept repo rates unchanged at
6.5 per cent. It also maintained the stance. The GDP growth forecast rate number was however
raised from 6.5 per cent to 7 per cent.
The week ahead has two IPOs opening and closing for subscription during the week. The first
of the issues is DOMS Industries Limited which is tapping the markets with a fresh issue of Rs
350 crore and an offer for sale of Rs 850 crore. The issue opens on Wednesday (December 13)
and closes on Friday (December 15). The price band is Rs 750-790. The company is a
manufacturer of a wide range of stationery and art products under the brand name DOMS which
are sold in India and over 45 countries in the world.
The company reported revenues of Rs 1,216.52 crore for the year ended March 23 which have
improved further to Rs 764.21 crore for the six months ended September 23. The profit after tax
was Rs 102.87 crore for the full year and Rs 73.9 crore for the half year. The EPS on a fully
diluted basis is Rs 18.29 for the full year and Rs 13.14 for the six months. The PE multiple on
earnings for March 23 is 41.01-43.19. The issue is attractive and as an added comfort for
investors has a very active and high grey market premium as well. The issue merits subscription
though allotment would be tough as the retail portion is only 10 per cent of the issue size.
The second issue is from India Shelter Finance Corporation Limited which is tapping the
markets with its fresh issue of Rs 800 crore and an offer for sale of Rs 400 crore. The price band
of the issue is Rs 469-493 and the issue would open on Wednesday (December 13) and close on
Friday (December 15). The company, as the name suggests, is in the business of providing loans
for affordable housing. It has an AUM of Rs 5,180 crore as of September 30. Among the peer
set mentioned by the company, the others have a higher AUM at Rs 7,603 crore for Aptus Value,
Rs 8,365 crore for Home First and Rs 15,319 crore for Aavas Financers. The way this business
is tracked is price to book or P/B which is 4.6 for Home First, 3.6 for Aavas Financers and 4.5
for Aptus.
【Today's strategy】
The markets are again getting ready for a spate of issues in the coming days before Christmas
comes and there would be a wide variety on offer. One may look at the existing listed shares in
the housing finance space as better opportunities may lie there.
Coming to the markets in the week ahead, we have had a sharp rise in the previous week and
markets must consolidate in the coming week. The levels on the upside could be between
21,100-21,150 on Nifty and 70,300-70,450 on BSE Sensex. On the downside there could be
some sharp corrections due to profit taking and support exists at levels of 20,600-20,650 on Nifty
and at 68,850-69,000 on BSE Sensex. The trading strategy would be to use rallies to sell and
book profits. Without correction in the markets, fresh long positions may be avoided.
The markets have a long way to go and the ensuing rally would be something for 5-6 months.
One will need to be patient to profit from this rally. Do not be in a hurry to make money. Be
patient and ride out the rally.
In conclusion, wait for a correction and consolidation in the coming week.

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