Street Signs: Calm after the storm in markets, spotlight on Mphasis, more

Tranquil waters: Navigating markets after the tempest

Amidst political uncertainty, the most-traded National Stock Exchange Nifty and Bank Nifty indices are experiencing wild swings. The benchmark Nifty plunged as much as 9 per cent on June 4 but recouped almost all losses to log fresh highs on a closing basis. Technical analysts expect things to calm down this week, with key indices likely to consolidate around current levels. “The macro data suggests a buoyant undertone, and going forward, global developments could play a crucial role in dictating the intermediate trend for our markets. The Nifty has witnessed a swing of nearly 2,000 points and might now attract some consolidation before setting up the next leg of the rally,” said Osho Krishan, senior analyst, technical and derivatives research, Angel One. He added that the Nifty faces stiff resistance at 23,500, and on the downside, 23,000 and then 22,800 are key levels to watch out for. The 50-share blue-chip index last closed at 23,290.

Spotlight on Mphasis: Blackstone’s strategic shift grabs market’s gaze

Shares of mid-tier information technology firm Mphasis will be in focus on Monday as promoter Blackstone looks to offload a 15 per cent stake for nearly Rs 6,700 crore. The private equity major has set the floor price at Rs 2,350, nearly 5 per cent below Friday’s closing price of Rs 2,472. Market players say the large block deal will allow tactical investors to capitalise on any adverse price movements resulting from the large trade. Some recent block deals have turned out to be profitable trades for investors, allowing them to scoop up shares at a 5–10 per cent discount. However, one needs to analyse the outlook for the stock before simply buying the dip. Meanwhile, shares of Le Travenues Technology, which operates the online travel portal ixigo, were seen changing hands at a premium of 24 per cent ahead of its Rs 740 crore initial public offering, which opens Monday.

Death by a thousand papercuts: Are brokers bleeding out?

Following incidence of defaults and misuse of client assets by brokers, market regulator Securities and Exchange Board of India (Sebi) has introduced several changes in regulations to safeguard investors. Some of these include cutting off brokers’ access to their clients’ dematerialised (demat) holdings, segregation of client funds, and more frequent audits of brokers. Last week, Sebi tightened the screws further by introducing direct payouts of securities to investor demat accounts. Currently, when a client buys securities, they get credited by the clearing corporation to the stockbroker’s pool account, which then transfers them to the client. Also, Sebi has proposed to hike the limit for ‘basic services demat account’ from Rs 4 lakh to Rs 10 lakh. This means investors holding shares worth less than Rs 10 lakh will not have to pay any annual maintenance charges (AMC) to their broker. “The reduction in AMC is, in a way, a result of the gradual reduction in a broker’s role. In the not-so-distant future, I wouldn’t be surprised if all that brokers will be doing is just processing orders,” quipped Nithin Kamath, founder and chief executive officer of Zerodha, the country’s most profitable stockbroker.