WEEKLY TRENDSETTER (DEC 16th ,2022)
| 2022 | DEC 2 | DEC 9 | Ch % |
| NIFTY | 18696 | 18496 | -1.07 |
| BANK NIFTY | 43104 | 43633 | 1.23 |
| USD/INR | 81.26 | 82.31 | 1.29 |
MARKET REVIEW–The week was a mixed one as the Nifty closed in the red and there was underperformance from 3 major sectors -IT, pharma and auto. Going into the New Year the twin underperformance of IT and pharma is a matter of concern as both are usually in the forefront of a bull run. The Bank Nifty continued its run-up with PSU banks in particular witnessing a spectacular run up. However, towards close of week some fatigue had crept into this sector as well.
INTERESTING CUES
PLI for toy sector
A long overdue initiative is about to be launched with an outlay of Rs 3500 cr. Interestingly some electronic components for manufacture of toys as well as material for soft toys are import dependent. However, the potential appears big as multinationals like Hasbro, Lego, Beetle and even Ikea are looking to expanding their local sourcing from India. Initially, the import duty on toy imports was increased from 20% to 60% in the 2020 budget and toy imports dropped sharply 70% from $371 mn in FY 2019 to $110 mn in FY 2022 which was primarily from China. Meanwhile toy exports increased 60% to $326 mn in the last 6 years. While MSME s are the active producers, some large companies have also taken around 30-40 licences. Interestingly Funskool is the largest manufacturer of toys in India and the company is promoted by MRF as a JV with Hasbro.
ASK gets Bank of Ireland nod to launch fund
An India based fund -ASK India Entrepreneur Fund is planned and this is the 4th wealth management firm in India to receive approval for a UCITS (Undertaking for Collective Investment in Transferable Securities) fund. Kotak AMC, Whiteoak Capital and UTI AMC already have such funds. UCITS is a regulatory framework of the European Commission.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY –The index saw strong profit-booking for most of the week and towards the end, some scare came into the IT pack which saw the index closing below 18500.IT and pharma have seen underperformance in this leg of the rally since June which could be a cause of concern as we enter 2023.Levels of 18100-200 should be a decent support level for the coming week while levels of 18600 and above could see selling pressure.
BANK NIFTY-The index has seen “buying on dips” on every correction with PSU banks showing a stellar move. The index now has closed in the green for 9 successive weeks and in the very near term looks stretched. While no clear signal is available to alert a sustained profit taking downside, some caution should be exercised on any attempt to move towards 44000.
SCRIPS TO WATCH OUT
Tata Motor (413)– The stock has been stuck in a range of 420-440 for the past few weeks and last week broke down below 420.The stock could see selling pressure increasing at every rise. Levels of 415-20 could be use to sell the scrip as it seems to be heading for 380 in the coming weeks.
Wipro (394)-After a weak short covering rally to 415 the stock swiftly reversed trend and slipped below 400 last week.With pressure mounting levels of 400-405 could be used to sell the scrip as it seems to be heading for further downside towards 360.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam