Weekly Market & Nifty Analysis for Dec 11-15, 2023
BJP wins 3 out of 4 state elections, RBI keeps rates unchanged, Nifty at All Time Highs and much more. A comprehensive round-up of what happened last week and the outlook for the upcoming week.
What happened last week?
What an eventful week it was!
The Bharatiya Janata Party (BJP) won in 3 out of 4 state elections, in Madhya Pradesh, Rajasthan, and Chhattisgarh. The victory was well-received by the markets. Nifty shot up over 700 points last week.
BJP+ now govern 17 out of the 28 states in India. BJP+ had about 7 states in their kitty back in 2014. From 7 to 17 states in 9 years is an extraordinary achievement.
Here is what India’s political map looks like right now.
India’s Political Map as of Dec 2023 | Source: India TV Nifty closed higher for the 6th consecutive week to close at 20969. It even breached the 21000 mark for the first time on an Intra-week basis. Markets certainly like political stability.
Nifty making a new All Time High (ATH) | Source: Trading View Not just the BJP win, several other factors contributed to positive sentiment: positive GDP growth data, a decrease in crude oil prices, a drop in US bond yields, FII Buying and strong global price momentum all played their part.
The Reserve Bank of India (RBI) kept the repo rate unchanged at 6.50% for the fifth time in a row. This decision was taken unanimously by the Monetary Policy Committee (MPC).
Change in Policy Rate over Last 5 Years | Source: RBI RBI remains focused on the withdrawal of the accommodative stance adopted during the pandemic to support the economy. This is to keep inflation under control.
Also, RBI raised the GDP forecast to 7% in FY 2024 from the earlier 6.5%.
The focus for this week will be on the US Federal Reserve meeting (Dec 12 & 13), where a pause in the rate hike cycle is anticipated.
Let us now move on to what FIIs did last week while the Nifty was making all-time highs.
FII DII Analysis
Both FIIs and DIIs were net buyers in the cash market last week.
FIIs net buying stood at ₹9258 Cr and DIIs net buying stood at ₹4326 Cr.
FIIs sold in the cash market at lower levels in November and are now buying at higher levels in December. It looks like they were not expecting the BJP to win 3 out of the 4 states.
FIIs now hold net long positions in both Index Derivatives and Stock Derivatives indicating positive sentiment. DIIs are also relatively less hedged indicating positive sentiment.
Please find below the FII Cash market, Index Derivatives and Stock Derivatives Trend over the last 2 weeks.
Nifty Analysis
Let us start with Open Interest Analysis which is indicative of Sentiment.
21000 Strike has the highest CALL Open Interest and most CALLs were added at the same strike on Friday. This indicates that 21000 might be a short-term resistance.
Nifty Max Pain has also been in an uptrend. Max Pain is a quick indicator to identify the direction of sentiment. Below is the graph of the weekly max pain of Nifty. You can see that price and Max Pain - both have gone up in the last week.
Nifty Price vs Max Pain over the last 30 days | Source: Finvezto Toolkit Both Momentum (Price) and Sentiment(Positions) indicate Bullishness. Not a good time to go short. We need to wait for more evidence to go short.
Here are the key levels for Nifty for the coming week. Bullish above 21007; Bearish below 20856. The max pain has to fall as the price moves below 20856 for us to go bearish. We will track max pain on a daily EOD basis.
Key Upcoming Events
Tuesday (December 12)
India Retail Inflation (CPI) data
India Industrial Production data
Adani Ports and Special Economic Zone board meeting for fundraising options
Wednesday (December 13)
OPEC Monthly Oil Market Report
India Shelter Finance Corporation IPO subscription opens
DOMS Industries IPO subscription opens
Thursday (December 14)
India Wholesale Prices Inflation (WPI) data
US Federal Reserve Interest Rate Decision
UK and European Central Bank Interest Rate Decisions
Friday (December 15)
India Exports and Imports data
China Industrial Production data
US and Euro Area Purchasing Managers' Index (PMI Data)
Key Stock Announcements from Last Week
New Orders & Projects
Bharat Electronics Limited (BEL) secured orders worth Rs. 3,915 Crore, boosting its cumulative orders to Rs. 18,298 Crore for FY 2023-24 in India’s defence sector.
Tata Power won the bid for the Bikaner-III Neemrana-II Transmission project, estimated at Rs 1,544 crore.
Gulshan Polyols secured a contract to supply 89,404 KL of Ethanol until 31/10/2024 to Indian Oil, Bharat Petroleum, and Hindustan Petroleum, valued at INR 571.5 crores.
SEPC Limited secured a contract valued at Rs. 427.79 crores from Jharkhand's Drinking Water and Sanitation Department for infrastructure development, spanning 27 months with a 5-year maintenance commitment.
J. Kumar Infraprojects clinched a Rs. 378.70 crore contract from MMRDA for constructing a vital flyover in Mumbai, spanning 30 months.
AVG Logistics secured a 6-year contract worth ~INR 150 Cr from Indian Railways for a Parcel Cargo Express Train connecting Bangalore to Ludhiana.
H.G. Infra Engineering received a letter of award from NTPC for a one-year transportation contract of Pond Ash to NHAI road projects from NTPC Ramagundam, valued at INR 36.20 crores.
PSP Projects received a 101.67 Crores INR work order for GBRC, Gujarat, and is L1 Bidder for a 409.93 Crores INR project for Sabarmati Riverfront.
KPI Green Energy received a 1.75 MW solar power project order from M/s Citizen Umbrella Manufacturers Ltd, contributing to their cumulative 149+ MW in the Captive Power Producer segment.
Olectra Greentech secured a Letter of Award from Vasai Virar City Municipal Corporation for 40 Electric Buses, valued at Rs. 62.80 Crores on an outright sale basis, to be delivered over 7 months.
Globesecure Technologies (GSTL) received a 3-year, Rs. 80 Crores work order from BSNL.
Mazagon Dock secured a contract from ONGC worth INR 1145 Cr for subsea pipeline replacement.
North Eastern Carrying Corporation received a 3-year contract from GAIL (India) worth Rs. 52.48 crores for polymer transportation.
BLS International secured a significant contract from the State Health Agency of Uttar Pradesh for processing Ayushman Cards on the National Health Authority's IT Platform, aiding across 10 districts under the Ayushman Bharat project.
Key Business Updates
Maruti Suzuki India’s total production fell 3.3% YoY in November to 1.47 lakh units, with passenger vehicles seeing a 4.2% drop in production.
Hero MotoCorp reported a 25.6% YoY sales increase in November 2023, totalling 4.91 lakh units, with domestic sales rising by 25.4% and exports increasing by 33%.
Eicher Motors reported a 13% YoY rise in Royal Enfield sales for November, reaching 80,251 units. Exports grew by 2% during the same period.
Brigade Enterprises launched Brigade Sanctuary, a residential project comprising 1,275 units with a gross revenue potential of Rs 2,000 crore.
Partnerships, Collaborations & Acquisitions
JSW Infrastructure to acquire 50% of PNP Maritime Services for Rs 270 crore, operating multi-purpose jetties in Maharashtra.
Container Corporation of India signed an agreement with NTPC Vidyut Vyapar Nigam for PV solar renewable energy projects in CONCOR terminals to reduce carbon emissions.
Shriram Finance executed a master agreement for the co-lending of loans to MSME borrowers with SIDBI.
Key Buying & Selling Deals
Government Pension Fund Global acquired 2,498,744 shares of Honasa Consumer (Mama Earth) at Rs. 378 per share.
Motilal Oswal MF acquired 1,000,000 shares of TI India at Rs. 3348.09 per share.
Morgan Stanley Asia Singapore Pte bought 2,132,000 shares of Kesoram Industries Ltd. at Rs. 154.17 per share.
Great Terrain Investment Ltd sold 9,759,730 shares of CAMS at Rs. 2766.47 per share, while several entities including Societe Generale, India Acorn Icav, Abu Dhabi Investment Authority, Kotak Mahindra Mutual Fund, and others bought shares totalling 9,350,889 at Rs. 2766 each.
SBI Mutual Fund purchased 11,469 shares of G R Infraprojects at Rs. 1074.5 per share.
Dayside Investment Ltd sold 91,775,672 shares of IDFC First Bank at Rs. 86.1 per share.
Arinjaya (Mauritius) Ltd sold 2,700,000 shares of Sapphire at Rs. 1400.01 per share, while the Government of Singapore purchased 2,019,694 shares at Rs. 1400 each.
That’s all for this week!
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