WEEKLY TRENDSETTER (JuLY 5,2024)
| 2024 | JUNE 21 | JUNE 28 | Ch % | |
| NIFTY | 23501 | 24010 | +2.17 | |
| BANK NIFTY | 51661 | 52342 | +1.32 | |
| USD/INR | 83.58 | 83.41 | -0.20 | |
MARKET REVIEW-The week largely saw the heavyweights in limelight which kept the indices propped up but the broader market witnessed profit-taking which resulted in a sense of unease as the week closed.
INTERESTING CUES
Yen s slide to a 38 year low against dollar– A widening gulf between U.S. and Japanese interest rates, which were in negative territory until March, kept traders largely biased towards the dollar and short on the yen. While Japan has raised interest rates this year to a range of zero to 0.1%, U.S. rates of 5.25% to 5.5% mean investors are flocking to dollar assets for higher returns. Investors are taking advantage of the big difference in rates in both countries by undertaking so-called carry trade strategies, in which investors borrow in low-yielding currencies to invest in higher-yielding ones. Carry trades have become hugely popular as some countries raised borrowing costs in recent years.
Sugar output expected to rise in FY24-25
The industry has been in a sweet spot in the last couple of years as ethanol production has ensured that any sluggish sugar prices will be more than made up by ethanol. Post election the industry is now gearing up for a hike in sugar prices and with festive season to begin from Aug, the industry could see better times. Ethanol blending has risen from a level of 1.2% in 2013-14 to 12-5 % till May ,24. The Govt is targeting 20% by FY25-26. However, supply from grained based plants would be higher than from sugar-based distilleries. The production capacity of ethanol has reached 1500 cr litres out of which 900 cr litres comes from sugarcane.
JP Associates could be a prime target
The beleaguered company has been going through tough times and with NCLT getting into action, bidding on its prime assets could begin soon. NCLT put a stop to the agreement between the firm and Dalmia Bharat which had agreed to acquire the cement, clinker and power plants for Rs 5666 cr.This implies that Dalmia Bharat will now have to rebid for the assets and this will also attract other bidders like JSW group and Adani.
NIFTY – The index was on a roll as heavyweights like HDFC Bank, ICICI Bank and Reliance saw a surge and the level of 24000 was breached and finally closed just above that. The sprint of the index from 23000 to 24000 in a record 13 days was however devoid of much euphoria as broader market was witnessing profit-taking. The coming week could be muted as the index pauses after the stellar run and wait for fresh cues.
BANK NIFTY-The indexwas also on a high as heavyweight private banking stocks saw the index breaching 53000 briefly before closing for the week below that. Momentum appears to be slackening and the coming week could see resistance at around 53000.
PICKS FOR THE WEEK
Indus Tower (375)-The stock has seen a strong break out past 360 which holds promise for further gains. Ideal levels for entry would be around 365. Levels of 390-400 could be seen in the coming weeks.
Coal India (467)-The stock has seen a good correction from levels of 520. Closer to 460 buying has emerged. With long term potential looking bright the stock could resume its uptrend for a possible target of 490-500.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam