Street Signs: Nifty's 19,300-19,800 range, IPO pot to keep boiling & more

Tug of war: 19,800 breakout or 19,300 support zone?

The markets experienced a see-saw movement last week, with the benchmark National Stock Exchange Nifty dropping by 202 points in the first two trading sessions and then gaining 217 points in the latter two sessions, ultimately closing the week at 19,638. Similar to the preceding week, robust buying emerged after the Nifty fell below the 19,500 mark. Pravesh Gour, senior technical analyst at Swastika Investmart, noted, “The real challenge lies in surpassing the 20-day moving average at 19,800, coinciding with a high open interest area. Breaking through this level at 19,800 would signal the end of the correction, and the Nifty might then aim for the 20,000–20,200 range. Conversely, a critical support zone exists between 19,300 and 19,250. If Nifty falls below this range, it could continue to drop towards 19,000 and 18,800. Therefore, it’s crucial to monitor the range between 19,300 and 19,800.”

UPL and BPCL in Nifty’s cross hairs

With less than four months left for the review period to complete for the March rebalancing of the National Stock Exchange (NSE) Nifty indices, analysts have begun predicting potential additions or deletions. If early trends are any indication, the positions of agrochem firm UPL and state-owned oil marketer Bharat Petroleum Corporation (BPCL) are at risk. Brian Freitas, a New Zealand-based analyst with Periscope Analytics, suggests that “with over a third of the review period completed, Shriram Transport Finance and Bharat Electronics are likely replacements for UPL and BPCL in March.” He also sees a “smaller possibility” of Cholamandalam Investment and Finance Company replacing Hero MotoCorp in the Nifty50 index. Additionally, Avenue Supermarts (DMart) stands a good chance of inclusion if the stock is added to the futures and options segment before the end of January. The review period for the March rebalance ends on January 31. Typically, NSE announces the changes by the end of February, and the implementation date is the end of March.

IPO pot boils over: September breaks 13-year record

September marked a significant month in the initial public offering (IPO) landscape, with 14 deals making it the most active month in 13 years in terms of the number of IPOs launched. Companies rushed to launch their IPOs, capitalising on positive market sentiment and avoiding the need to update their financials. If these IPOs had been spread over to October, companies would have had to update their offer documents with April-June quarter numbers. Due to this technical factor and the spike in US bond yields, IPO activity might moderate. However, market insiders rule out a complete halt. Investment banking sources reveal that IPOs worth close to Rs 3,000 crore have been lined up for this month. The list includes ESAF Small Finance Bank, Blue Jet Healthcare, and IRM Energy. There is also strong buzz that Tata Technologies will launch its IPO soon after setting aside a quota for its employees and shareholders of the parent company, Tata Motors.