Street Signs: Bearish momentum may continue, the Zee-Sony trade & more

Bears tighten grip as Nifty breaches key support levels

After recording its fifth consecutive weekly close, the benchmark National Stock Exchange Nifty concluded its last session at 19,266, marking its lowest point in nearly two months. Technical analysts do not dismiss the possibility of a further decline in the index following its breach of key support levels. “The Nifty’s closure below the support level of 19,300 suggests that bears are likely to maintain an advantage heading into the monthly expiry next week. If 19,300 is not surpassed, there is a high probability of bears driving the index closer to the 18,800–19,000 range,” observes Apurva Sheth, head of market perspectives and research at SAMCO Securities. On the upside, the Nifty faces an immediate hurdle at 19,300–19,400. Analysts also do not rule out a range-bound movement and consolidation around current levels until a definitive breakthrough occurs on either side.

Investors in a huddle after Zee-Sony deal all-clear

With the path now clear for the proposed merger between two media giants, Zee Entertainment Enterprises (ZEEL) and Sony Pictures Networks India (now called Culver Max Entertainment), an indirectly wholly-owned subsidiary of Japan’s Sony Group Corporation, investors are actively formulating their trading strategies. ZEEL’s shares have already gained 12 per cent over the past month. This deal is anticipated to establish a $10 billion media and entertainment powerhouse. According to a report by Nuvama, given that the merged entity will possess a significant market capitalisation, it could be an early inclusion candidate for the Morgan Stanley Capital International (MSCI) index, potentially resulting in inflows of $230 million (nearly Rs 2,000 crore). However, ZEEL will first be excluded from the MSCI index as trading on the counter will be temporarily suspended prior to the completion of the merger process. This could lead to the sale of $22 million (about Rs 200 crore) by passive sellers tracking the MSCI.

Vishnu Prakash grey market premium hovers above 50%

The grey market premium for Jodhpur-based Vishnu Prakash R Punglia, an integrated engineering, procurement, and construction company specialising in water projects, is currently hovering above 50 per cent ahead of the conclusion of its initial public offering (IPO) on Monday. The company has priced its issue between Rs 94 and Rs 99 per share. The IPO consists of a fresh issue of Rs 309 crore. The issue has already received over 10x subscriptions, and market observers suggest that final subscriptions could exceed 50x. At the upper end of the range, Vishnu Prakash will be valued at Rs 1,234 crore. In 2022-23, the company reported a net profit of Rs 90 crore on revenues of Rs 1,168 crore. As of July 15, 2023, Vishnu Prakash’s order book stood at Rs 3,800 crore.