WEEKLY TRENDSETTER (SEPT 3RD ,2021)
| 2021 | AUG 27 | SEPT 3 | Ch % |
| NIFTY | 16705 | 17323 | 3.70 |
| BANK NIFTY | 35628 | 36761 | 3.18 |
| USD/INR | 73.60 | 73.04 | -0.76 |
MARKET REVIEW –It was a power-packed performance with Nifty and Bank Nifty firing all cylinders and managing to log on impressive gains. The FII s kept the buying spree on and after a couple of days selling the DII s also joined in the party.
DID YOU KNOW
Ethanol rush –In a bid to ramp up ethanol production the 3 OMC s IOC, HPCL and BPCL are setting up 12 ethanol plants at an investment outlay of Rs 5000-7000 cr. The total requirement is estimated at 1000 cr litre by 2025.15% of this is estimated to be met by the OMC s. Ethanol helps in reducing emission and will also reduce the crude oil import by approx. 10-15% once the blending process starts.
The ethanol blending is still at an early stage. How much of value it would add to the margins remains to be seen for a segment whose products are expected to give way to electric in a few years’ time.
McLeod Russel settles with creditor –The company is the largest tea producer of the country with a capacity to produce 73 mn kg across India, Africa and Vietnam. It was pushed to NCLT by its creditor, Techno Electric & Engineering which had lent Rs 100 cr. Now a stake also has been offered in McLeod to Mr Gupta, MD of Techno post settlement of dues. However, McLeod’s woe continues as it owes banks around Rs 2300-400 cr. However, some restructuring is expected which will enable a smooth settlement with the banks as well. The stock closed at 27 at close of week. In a market seeking value it would be interesting to see if this company lives up to its potential. Better late than never!
LIC picks up 4% stake in BOI from open market
With the above purchase LIC s stake in the bank is up 7%. The stake of GOI on the other hand has declined from 90.3% to 82.5 % after a QIP done earlier. Unlike some of its peers, the bank’s performance in the last few quarters has been lacklustre. In this background LIC s acquisition is interesting.
MARKET OUTLOOK.
1.The Nifty’s march past 17000 without any correction puts it on course to touch 17500 by the end of next week which will be a truncated one. Banking counters could lead the charge as they have lagged behind in the last 3-4 months with the PSU pack in particular focus as they have been huge underperformers.
Some technical cues are as follows going by market trends
Scrips to watch out
The mid-cap and small-cap rally saw a revival in the last couple of weeks and the June quarter results offered some cues. Couple of technical set-ups are discussed with potential trades for the coming week: –
Thermax (1428)-The capital good space has seen value buying in the last couple of months and this scrip also has displayed a steady trend. After testing levels of 1570 some correction has been seen. Long term investors could accumulate at declines. Levels of 1700 could be seen in the short to medium term.
TVS Srichakra (2183)-The tyre space has seen a decent correction in the last couple of months. This scrip saw a high of 2360 before receding to 2000 levels from where accumulation has again started by buyers with a long-term outlook. Decent appreciation could be expected and levels of 2600—700 could be seen in the short to medium term.
There is still a lingering fear that the 3rd wave of Covid could be round the corner. Optimism is however prevalent going by crowded tourist spots. Stay positive but take precautions as well so that we live to see better times!
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam