WEEKLY TRENDSETTER (NOV 29,2024)
| 2024 | NOV 15 | NOV 22 | Ch % |
| NIFTY | 23532 | 23907 | +1.59 |
| BANK NIFTY | 50179 | 51135 | +1.91 |
| USD/INR | 84.41 | 84.47 | +0.07 |
MARKET REVIEW-The week saw swings both ways but lower levels of around 23200 held on. Towards close of week, positive winds of a possible victory by the BJP led front in Maharashtra led to short covering leading the index up to close at 23907.With the election results showing a better performance than expected, the next week could see a gap up opening which could see the index nudging 24500.If it manages to close above that for the week, Dec could see bulls making a comeback.
INTERESTING CUES
Buybacks and higher dividend norms for PSU stocks
The government has revised dividend payments, share buybacks, and stock split norms of PSUs to improve capital management and bolster the performances of their equities. This is on the back of a huge meltdown in PSU stocks which had seen a huge run-up.PSU s which posted good Sept quarter results should be in focus which will act as a further boost to sentiments.
Ethanol blending policy good on paper but difficult to implement
The idea was to convert 90% of the fuel fleet to a flex-fuel compliant one with ethanol providing the variant. This was similar to the Brazil experiment which has worked well for them. However, in the Indian context there have been more complexities to deal with. The production of rice, sugarcane and maize have not been durable enough which would enable shifting of the same for ethanol production. Besides there have been issues which have resulted in delaying the price hike of ethanol for the grain manufacturers. Last year there was also a cap put on how much sugarcane could be diverted towards ethanol production. Thus, with the cost of feedstock also on the rise, sugar companies have been caught on the wrong foot as they have spent considerable capex towards production of ethanol. However, with the Maharashtra elections also behind us, sugar companies will now be anxious for clear directives from the Govt towards ethanol which will enable them to use the facilities created specially for this purpose
NIFTY –The index looks heading for a gap up opening for next week on the back of better-than-expected results from BJP in Maharastra.The week will also see monthly expiry of the Nov series. With huge shorts in the system, short covering could continue and levels of 24400-500 could be seen. The early challenge will be is to maintain the gains and a closing above 24500 for the week could be a good signal for the market reversal in Dec.
BANK NIFTY-The index was a relative out -performer. While the opening should be good levels of 52200-500 will act as a strong resistance.
STOCK PICKS
Coal India (413)-The stock has slid from levels of 545 to 413 in a matter of 2 months. At current levels odds of short covering are high. Buying could be considered for a possible target of 450 in the coming days.
BEL (281)-The stock has bounced back repeatedly from levels of 265-70. While a modest target of 295-300 could be expected, a breakout past that could see higher levels of 325.
Wishing all readers great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam