Street signs: Mkts turn skittish near new highs, Index fund inflows & more

Markets turn skittish near new highs

The benchmark indices registered declines in the previous two trading sessions, which could be a bearish sign, observe analysts. “The National Stock Exchange Nifty has given back-to-back lower closes on the daily charts for the first time since May 17, 2023. The index has given a breakdown of the rising wedge pattern on the daily charts. On the derivatives front, foreign portfolio investors were seen increasing their short exposure to index futures. The maximum call and put open interest for the Nifty was placed at 18,700, and the bears have further strengthened their positions at 18,700 strike, making it a strong resistance for the Nifty. The downside support for the Nifty is placed at 18,500,” says Ashwin Ramani, derivatives and technical analyst, SAMCO Securities. The Nifty50 last closed at 18,563.

Index fund inflows thin out

The net inflows into index funds have stayed below Rs 150 crore for two consecutive months after staying above Rs 2,000 crore throughout 2022-23 (FY23). Although the breakdown of inflows into debt and equity index funds is not available, the sudden drop in inflows could be due to a change in debt fund taxation that has stripped away the tax advantage enjoyed by debt schemes. Debt index funds, also known as target maturity funds, were fast gaining traction among corporates as well as individual investors before the tax change due to their predictability in returns. In FY23, debt index funds received a net of Rs 76,000 crore. In the case of equity schemes, the net inflows stood at Rs 18,360 crore.

Mankind may join elite club of large-caps

Mankind Pharma’s impressive after-listing showing will catapult the stock into the ‘large-cap’ universe next month. Shares of the fourth-largest pharmaceutical (pharma) company in India have risen 45 per cent over its issue price. The pharma major is currently valued at over Rs 59,000 crore and is among the top 90 companies in terms of market capitalisation (m-cap). The Association of Mutual Funds in India undertakes the reclassification of stocks every six months, with the next exercise due in early July. The top 100 stocks in terms of m-cap form the large-cap universe, the next 150 forms the mid-cap universe, and the rest are small-caps. Mankind Pharma made its stock market debut on May 9.