Buy BANK NIFTY (09-October Expiry) 51,800 PUT at Rs 284 & simultaneously sell 51,300 PUT at Rs 160
Lot Size 15
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Cost of the strategy Rs 124 (Rs 1,860 per strategy)
Maximum profit Rs 5,640 If Bank Nifty closes at or below Rs 51300 on 9 Oct expiry.
Breakeven Point Rs 51676
Risk Reward Ratio 1: 3.03
Approx margin required Rs 15,600
Rationale:
Short build up is seen in the Bank Nifty Futures, where we have seen 29 per cent rise in the open interest with Bank Nifty falling by 2.04 per cent.
Short term trend of the Bank Nifty turned weak as it is placed below its 5, 11 and 20 day EMA.
RSI Oscillators is in falling mode and placed below 50 on the daily chart, indicating bearish trend.
(Nandish Shah is a technical research analyst at HDFC Securities. Views expressed are his own.)
First Published: Oct 04 2024 | 7:23 AM IST
KRN Heat Exchanger and Refrigeration, a component manufacturer for the air-conditioner industry, saw its market value more than double during their trading debut on Thursday. After hitting a high of Rs 513 and a low of Rs 450, the stock finished at Rs 478.5, up Rs 258.5, or 2.2 times over its issue price of Rs 220. The gains came despite a selloff in the overall market. The stellar listing follows a strong debut for KRN’s shares during its maiden share sale.
Sebi reduces trading size of privately placed Invits
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The Securities and Exchange Board of India (Sebi) has drastically reduced the trading lot size of privately placed infrastructure investment trusts (Invits) to Rs 25 lakh in a bid to boost investors’ participation and increase liquidity of such investment vehicles. The current trading lot for secondary market trading for privately placed Invits is set at Rs 1 crore. Further, if the Invit invests at least 80 per cent of its asset value in completed and revenue-generating assets, then the trading lot is Rs 2 crore. PTI
First Published: Oct 03 2024 | 11:04 PM IST
The auto industry sees the festive season as critical and this year, it seems two-wheelers and tractors will lead the way.
At the wholesale level, two-wheelers have seen double-digit growth in anticipation of the festive season. This is despite an apparently weak start. However, Bajaj Auto, TVS Motor, Hero MotoCorp, and Royal Enfield wholesales have all exceeded expectations as original equipment manufacturers (OEMs) anticipate a pickup in October 2024.
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The two-wheeler numbers will need to be monitored closely since low momentum would trigger downgrades for stocks that have moved up in anticipation of outperformance.
Also, dispatches would crash if expectations are not met since there has been a big inventory buildup in anticipation.
Wholesale dispatches for Bajaj, TVS, Hero MotoCorp, and Royal Enfield grew 22 per cent, 22 per cent, 19 per cent and 11 per cent year-on-year (Y-o-Y), respectively to 400,500, 471,8000, 637,000 and 87,000 units.
Export dispatches for Bajaj and TVS grew 13 per cent and 11per cent Y-o-Y, respectively due to a rebound in Africa. Hero MotoCorp has indicated positive sentiment as the festive season started and crafted festive offers.
In other auto segments, PVs are slightly lower on easing of demand, and high dealer stocks. CV volumes have slipped due to the slow pickup in infrastructure/capex and heavy rains.
But tractor volumes are up, along with strong management commentaries. These two segments, tractors, and two-wheelers are outstripping others. Both should see volume growth in double digits in H2FY25.
For Hero MotoCorp (HMCL), volumes grew 19 per cent Y-o-Y to 637,050 units, above Street estimates of 590,000. Domestic volumes grew 19 per cent and exports, 22 per cent. But registration (vahan) volumes were reported at 251,356 vs 616,706 wholesales.
For Bajaj Auto, volumes grew 20 per cent Y-o-Y to 469,531 units, above consensus estimates of 433,000 due to better-than-expected domestic and export two-wheeler volumes. Domestic grew 23 per cent. Within domestic, two-wheelers grew 28 per cent and three-wheelers 4 per cent. Exports grew 13 per cent. Within exports, two-wheelers grew 13 per cent and three-wheelers 16 per cent. The registration volumes were reported at 169,363 units against wholesales of 311,887.
Bajaj Auto has positive commentary across domestic and exports with the African market recovering, with Nigeria at 25,000 in September compared with 20,000 in August. The upcoming season from October to December 2024 would be good. Going ahead, volumes are expected to improve by 10 per cent month-on-month with domestic industry growth at 6-8 per cent expected in October 2024. Green energy (EV+Yulu+E3W+CNG) combined contributed 40 per cent to domestic revenues in September 2024. The above 125cc motorcycle industry is outperforming. The EV volume momentum is expected to continue and Bajaj hopes to be a leader in this segment by FY25 end. The company is close to leadership in e3W also.
TVS Motor has seen volumes grow 20 per cent Y-o-Y to 482,495 units, above the estimated 440,000. Domestic units grew 23 per cent. Within domestic, two-wheelers grew 23 per cent, three-wheelers 33 per cent. The iQube volumes grew 42 per cent to 28,901 units. TVS’ exports grew 11 per cent. Within exports, two-wheelers grew 19 per cent, but three-wheelers fell 40 per cent. Registration volumes were reported at 212,211 units vs 371,488 wholesales.
For Eicher Motors, Royal Enfield (RE) volumes grew 11 per cent Y-o-Y to 86,978 units, above the estimated 83,000. Domestic grew 7 per cent, exports 77 per cent. In CVs, volumes grew 6 per cent to 7,609 while domestic grew 2 per cent, exports 90 per cent and Volvo 23 per cent. Registration volumes for Royal Enfield were at 54,021 vs 79,326 wholesales and for VECV 5,991 vs 6,847 wholesales.
The positive sentiment is encouraging but investors should track sales data with care since there’s high inventory. A slowdown could lead to a sharp correction.
First Published: Oct 03 2024 | 9:50 PM IST
Axis Mutual Fund has launched Axis Nifty500 Value 50 Index Fund. The new fund offer of the open-ended index fund aims to replicate the performance of the Nifty500 Value 50 Total Return Index (TRI). The NFO opens on October 4 and closes on October 18.
The fund will be managed by Karthik Kumar and Hitesh Das. Value investing is a subset of factor investing that target securities that are undervalued or less expensive. The factor ‘Value’ is one of the oldest and widely used factor globally.
SoftBank-backed Indian food delivery company Swiggy received shareholders’ approval to use a provision that will allow it to increase the size of fresh issue in its IPO to Rs 5,000 crore ($595 million) from Rs 3,750 crore, people aware of the matter told Reuters on Thursday.
India’s red-hot IPO market has already seen around 250 companies raise over $9 billion so far this year, more than double the amount raised in the same period last year, as per LSEG data.
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Swiggy’s existing shareholders will sell shares worth Rs 6,664 crore, which remains unchanged.
With the increase of the fresh issue, its initial public offering size will increase to $1.4 billion from $1.25 billion.
Swiggy’s original IPO size eked out NTPC Green Energy’s $1.2 billion public offering filing to be the largest in the country this year.
Swiggy did not immediately respond to a Reuters request for comment.
The Bengaluru-based company had filed its draft papers for the IPO last week, reported by Reuters to be targeting a valuation of $15 billion.
Among its investment plans is the expansion of its quick-commerce business called ‘Instamart’, where rivals including Zomato and Zepto race to delivery everything from groceries to higher-margin electronics in 10 minutes.
Swiggy also competes with Zomato in the food delivery space.
First Published: Oct 03 2024 | 9:16 PM IST
Equity benchmarks, already battered this week amid concerns of flows shifting to China, got another jolt as escalating tensions in the West Asia led to investors dumping risky assets.
Foreign portfolio investors (FPIs) sold shares worth Rs 15,243 crore on Thursday, according to provisional data from the exchanges, marking the highest-ever single-day sale.
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FPIs have sold shares worth Rs 26,879 crore over the last three days, amid a sharp 30 per cent rebound in Chinese markets from their September lows.
The benchmark Sensex declined 1,769 points, ending the session at 82,497, a 2.1 per cent fall. The Nifty 50 index fell 547 points to end the session at 25,250, a decline of 2.1 per cent.
The Nifty posted its third-biggest fall of the year, following drops on June 4 and August 5, when the shock verdict of the Lok Sabha elections and concerns about the reversal of the yen carry trade and disappointing jobs data rattled the markets.
For Sensex, this was the fourth-worst fall of the year.
Domestic equity benchmarks were also the worst-performing global indices. India VIX, a gauge measuring market volatility, rose 10 per cent and ended the session at 13.2.
Thursday’s rout wiped out investor wealth worth Rs 9.8 trillion, with India’s total market capitalisation dropping to Rs 465 trillion.
Iran’s missile attack on Israel has left investors across the globe worried, with concerns over Israel’s potential response. Israel bombed Beirut overnight, retaliating for the deaths of eight soldiers in a battle with Hezbollah. The latest round of tensions, with Israel directly pitted against Iran, has raised concerns about its impact on oil prices and global geopolitical stability.
The region accounts for about a third of global oil supplies, and a cascading effect is expected if oil facilities or supply routes are attacked.
Crude oil rose for the fifth consecutive session, trading at $75.4 per barrel. Over the last five sessions, Brent crude has risen 6 per cent.
“Foreign funds might want to move quickly to China, so they must reduce weightage in India. When flows return to emerging markets, they will top up India or China, depending on market conditions. Our markets were overbought anyway. Rising crude prices are a negative for India, but we have been buying from Russia; perhaps the expectation of an RBI cut next week is now off the table,” said Andrew Holland, CEO of Avendus Capital Alternate Strategies.
After recording fresh highs on Thursday, the Nifty has declined by over 4 per cent from its peak.
In addition to global headwinds, the RBI’s monetary policy decision this month, macro data from the US that will give cues on future US rate cuts, and quarterly results in India are expected to determine the market trajectory.
“The result season is unlikely to be great. But if the RBI cuts rates, it will be a positive. The expectations will be that things will start to pick up, interest rates will come down, people will have more money to spend, and companies will invest,” said Holland.
Reliance Industries, which fell 3.9 per cent, was the biggest contributor to Sensex’s decline. Over the last three days, Reliance Industries has declined 7.8 per cent, with West Asia tensions creating uncertainty for its oil refining business.
Market breadth was weak, with 2,881 stocks declining and 1,107 advancing.
Among sectoral indices, the Nifty Realty Index fell the most at 4.4 per cent, followed by Nifty Auto and Oil & Gas, which each fell nearly 3 per cent.
“I don’t see a huge fall from here as domestic liquidity support is intact. Domestic flows will go into larger names, ones that haven’t moved in a long time. Any midcap that rallied and has a 30-40x P/E could see a correction,” said Amar Ambani, executive director of Yes Securities.
First Published: Oct 03 2024 | 7:43 PM IST
