Street signs: Nifty forms bearish candle, mixed demand for IPOs & more

Nifty forms bearish candle 

The benchmark Nifty and the Sensex have breached key support levels of 18,170 and 61,000 respectively. Analysts say the indices have formed a long bearish candle which suggests further weakness. “We are of the view that the short term trend remains weak in spite of the oversold situation in the market. The weekly trading set up suggests 17,800 would be the immediate hurdle for Nifty. If it succeeds to trade above the same, we can expect a pullback rally up to 17,920-18,000-18,070. On the flip side, below 17,800, the correction wave may continue up to 17,600-17,500-17,420 levels,” says Shrikant Chouhan, head of equity research (retail), Kotak Securities. The Nifty on Friday closed at 17,672, while the Sensex ended the week at 59,306. 

Mixed demand for IPOs 

Over half a dozen IPOs looking to raise over Rs 32,000 crore have got lined-up. Grey market activity suggests the response towards these issues will be a mixed bag. According to people in the know, Nykaa and Sigachi Industries are commanding the highest premium, followed by Policy Bazaar. Meanwhile, the premiums are relatively muted for Fino and SJS Enterprises. To be sure, the grey market trends are not always a good indicator of post-listing performance. Nykaa’s IPO closes on Monday, Fino a day later, while Policy Bazaar, Sigachi, and SJS Enterprises on Wednesday.

MSCI balm for IRCTC 

Investor sentiment towards IRCTC has taken a beating due to the government’s flip-flop over sharing of convenience fees, which account for the bulk of the state-owned firm’s operating profit. The government has reversed its decision to make IRCTC share the income generated from convenience fees on a 50:50 basis. Many believe that may not be enough for the stock to recoup all its losses. The stock currently trades 30 per cent below its peak. However, IRCTC has one positive near-term trigger to look forward to. Abhilash Pagaria, assistant vice-president, Edelweiss Alternative believes despite the sharp correction in the stock, IRCTC remains a strong inclusion candidate in the MSCI index. He projects, at the November 12 rejig, the stock will get added to the index which will result in inflows of $170 million.