Markets for the week scaled all-time highs led by gains from defensives like IT, Pharma and FMCG helping Nifty to close convincingly above the 25,000 mark. However, Nifty Financial Services Index continues to trade significantly lower than all-time high leading to a major divergent trend against Nifty 50 Index. History suggests before a meaningful decline, financial index often go through a series of underperformance against leading index and often corroborates with rupee weakness. From a momentum perspective, the RSI of Nity 50 index has also formed 3rd degree negative divergence and Nifty 50 is thus prone to a larger decline on a breach of last four days low which is placed at 24,964. Overall, outlook remains cautious with selling expected to resume from broader markets after completion of rising wedge in Nifty Small cap Index.
Nifty 50 Chart
Stocks to watch
Positive Read through
- NHPC, SJVN, Railtel – Government grants Navratna status to the companies.
- Indigo – OMCs cut ATF prices to Rs. 93,480.22 KL from Rs. 97,975.72 KL.
- 63Moons – Company & NSEL consider one-time settlement in payment default case on NSEL platform.
- Maruti – August sales in-line with estimates at 0.18 mn units, up 1 pct MoM.
- Hero Moto – August sales in-line to slightly higher than estimates, at 0.51 mn units.
- TVS Motor – Total August sales up 13 pct YoY, except 3W, all segments report growth.
- Century Text – Arm in agreement with LGCPL to co-develop 131 acres of land parcel in Noida.
- Fortis Health – Acquires entire stake held by PE investors in Agilus Diagnostics.
- Godrej Props – Highest bidder for 2 group housing plots in Gurugram, sales potential of Rs. 34 bn.
- Guj Gas, GSPL – GSPC, GSPL & GSPEL to be merged with company & trans business to be demerged.
- Biocon – Gets US FDA nod for Valsartan tablets, EIR for Vizag facility.
- Lemon Tree Hotels – Signs license pact for 72 room hotels in Amritsar.
- NBCC – Board approves bonus issue of 1 share for every 2 shares held.
- Indian Hume – Gets Lol for a project worth Rs. 8.59 bn from Tapi Irrigation Development Corporation.
- Emami – Acquires balance 49.60 pct stake in Helios Lifestyle.
- Rites – Lowest bidder for a project worth ~Rs. 2.24 bn from Tanzania Railways Corporation.
Negative Read through
- HDFC Life – Gets tax demand order of Rs. 2.77 bn for April 1, 2019- March 31, 2020 period.
- Eicher – RE sales in line to muted estimates, launches 2024 Royal Enfield Classic 350.
- DRL – China’s MDJPO puts company on violation list, Atomoxetine capsules sale suspended.
- Moil – Cuts ferro grades of Manganese ore and fines prices by up to 20 pct.
- NMDC – Dantewada administration imposes Rs. 16.20 bn penalty on company for violation.
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