WEEKLY TRENDSETTER ( JULY 3 ,2026)
| 2026 | JUNE 19 | JUNE 26 | Ch % |
| NIFTY | 24013 | 24056 | 0.18 |
| BANK NIFTY | 57686 | 58177 | -0.88 |
| USD/INR | 94.45 | 94.59 | 0.15 |
MARKET REVIEW-The truncated week was fairly positive but for a last session profit taking which erased large part of the gains. Weekend tension in the last few months due to the US -Iran war has conditioned traders to hedge or exit positions ahead of the weekend. Besides Asian markets like Korea and Japan saw some aggressive selling and the sentiments rubbed off into the Indian markets as well.
INTERESTING CUES
MTF book hits all-time high in May as retail places aggressive bets
Margin trade facility is the latest flavour of the Indian investors rising by 65% in a year’s time even as markets have been fairly sluggish. Interestingly NSE dominates 96% of the volume and dwarfs the old exchange BSE. This could be the consequence of investor awareness of the riskier F&O segment and enables small bets on the markets and goes beyond the scrips available on the F&O segment. Thus, a trader could gradually build positions based on his comfort level unlike the F&O which has a larger lot size. Risk of course exists in MTF as well but the regulator is keeping a close watch to ensure proper risk management by brokers by screening quality of scrips and proper hair-cuts.
The critical aspect of MTF is the interest charged by the broker. Currently Kotak charges 8-14% interest based upon position and it commands 15% of the market share followed by ICICI Direct, Zerodha and Groww.The interest rate even goes up to 18% and this is where the risk reward ratio gets distorted.
OFS from Govt hits a 11 -year high
Fiscal pressure has forced the Govt to look at select divestment in PSUs.In the current calendar year the Govt has already mopped up Rs 25490 cr with divestment in PSU s like BHEL, IRFC, Coal India, etc. The broader target is of course reducing the Govt holding in PSU’s below 75% over a period of time. By offloading in small tranches, the Govt is also increasing free float of the shares. This gradually paves the way for inclusion of these scrips in global indices which could attract long term passive fund flow from foreign investors and improve valuation.
NIFTY –The index was well on the path to 24300 before sharp profit taking saw the market dip and the weekly closing was almost flat. With monthly expiry next week 23800 will be keenly watched and 24300 continues to be the hurdle.
BANK NIFTY-The index has had a stellar run in June. From a low of 53000 it went on to 58700 mainly on the back of ICICI Bank and HDFC Bank. There is select second rung banks which are showing promise and that should continue as accumulation seems fairly strong.
Are broking houses becoming mini banks?
As discussed above broking houses are increasing MTF facilities to clients and the book size is growing at a steady clip. With healthy NIMs of 3-4 % similar to banks this is turning out to be a major source of revenue to broking houses. The regulator is also looking at making these broking houses more resilient by increasing net worth requirement from Rs 3 cr to Rs 5 cr. It is also proposed to allow brokers to raise funds via the NCD route to facilitate MTF funding. With the retail participating showing encouraging signs in the years to come broking houses themselves could attract investor attention to ride the wave of improving fortunes.
Wishing all readers a great week ahead!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam
DISCLAIMER: Kindly note that I am not SEBI registered and the above content is for educational/informational use only and users should consult a registered professional before investing.