WEEKLY TRENDSETTER (SEPT 20,2024)
| 2024 | SEP 6 | SEP 13 | Ch % |
| NIFTY | 24852 | 25356 | +2.03 |
| BANK NIFTY | 50577 | 51938 | +2.69 |
| USD/INR | 83.99 | 83.88 | +0.06 |
MARKET REVIEW-The week began on a sedate note. However, the calm underneath was a precursor to something dramatic. On Thurs just 2 hrs before the Nifty derivative expiry, a monstrous rally took the Nifty up 400 points fuelled by frantic short covering by bears. Within no time the Nifty had hit all-time high and this was despite the banking stocks relatively underperforming.
INTERESTING CUES
Sops for steel sector looks on cards
The steel industry has been raising concerns about dumping of steel from mainly China and Korea which has made local production unremunerative. In FY24 India imported 8.3 mn tonnes of finished steel up38% from a year earlier. In the same period exports rose by just 11%to 7.5 mt. With lower exports Indian companies were forced to divert this to the domestic market depressing the prices. On similar concerns in the US a duty of 25% was levied on certain Chinese steel products. The Chinese were also circumventing the products through Mexico which was addressed by putting a tariff of 25% on imports from Mexico. A similar stand is expected in the coming days in India as well and steel stocks have started recovering on this anticipation.
India’s short-term rates hit 1-1/2-year low after govt cancels T-bill auctions
The yield on 91-day T-bills fell to 6.55%, its lowest since January 2023, and is only 5 basis points above the RBI’s key policy rate – its lowest spread since May 2022.
The RBI cancelled two treasury bills auctions worth Rs 20,000 crore ($2.38 billion) each, scheduled for this month. The borrowing cut comes at a time when the liquidity situation is expected to tighten on the back of tax outflows scheduled over the coming week, with possible outflows of nearly 2.5 to 3 trillion rupees from the banking system.
The drop-in short-term rates will also benefit companies and banks looking to raise funds via commercial papers and certificates of deposits at quarter-end.
NIFTY –The index closed at an all-time high level for the week. The coming week will be eventful with a Fed decision on a possible rate cut. While a 25-bps cut is largely priced in any disappointment could have a dampening effect. For Nifty 24900-25000 should act as a decent support level, upside of 25600 could be the near-term target.
BANK NIFTY-The index started showing some spark towards close of week. It is nudging 52000 and with the PSU banks also witnessing short covering at lower levels a race above 52500 is a possibility. On the downside 51500-600 should act as a decent support.
PICKS FOR THE WEEK
BEL (290)- The stock has seen a decent correction from levels of 340 to 275 in the last few weeks. Near term support of 280-85 should ideally hold and the stock could be expected to see a modest rally to 305-310.
Can bank (106) -Recommended for a sale last week at 103, the stock looks to be bottoming out and could see short covering in the coming weeks. Buying could be considered around 103-105 for a possible target of 110-115 in the coming days.
Wishing all readers, a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam