Mazagon Dock’s Quarterly Performance, RIL’s JFS Shares, Muthoot Finance’s Growth

Technical Overview – Nifty 50

NIFTY SPOT LTP 19424 (Weekly Close as on 11th-Aug-23 > Down -0.42%)
Post Nifty Spot made “All Time Highs” of 19991.85 as on 20th-July-2023 at crucial physiological price hurdle & time cycle resistance; it entered “Price & Time” consolidation. Since 21st July the “Be Cautious & Be lite with Leverage” outlook has been shared at regular intervals as Daily RSI was in “Over-Bought” zone at around 76.56 levels. Since the Index has gained substantially from lows of 16828 in (Mar-2023) to Fresh all time highs of 19991.85 & multiple Indicators have signaled a “Pause” and retracement of this up-move; we are witnessing “Price & Time” correction in Index & Stocks in last three weeks. Current week (7th-Aug to 11th-Aug-2023) the Index initially consolidated within a range amid high volatility & thereafter in last couple of sessions gave-up gains & corrected from highs of 19645 to end the week at its lows just above 19400 levels in red down -0.45%.

Weekly RSI is at around 92.92 & daily RSI has cooled-off to current 52.35 levels. Nifty Index gained support from IT Index which ended the week Up +1.12%, Nifty Metal Index +0.98%  Nifty Auto Index +0.26% while Nifty FMCG Index was down -1.41% & BankIndex down -1.43%. 

Weekly Expiry 17-Aug Option Chain data suggest maximum CE build-up at 19600 & Maximum PE build-up at 19400 levels.
The Index closing has been weak & indicate continuation of “Price & Time” correction in days to come till Nifty Spot remains below its immediate resistance of 19600 & major 19800 spot levels. The major supports for the Index in coming weeks can be at around 19300 & 18800 levels.

Technical Overview – Bank Nifty

BANKNIFTY SPOT LTP 44238 (Weekly Close as on 11th-Aug-23 > Down -1.45%). BankNify witnessed third consecutive negative weekly closing this week. From “All Time Highs” of 46369 (In July-2023) the Index has corrected -4.80% from highs. This week the Index failed to surpass its immediate interim resistance of 4500-45200 zone (High 45096.85) & slipped down to end the week at its lows 44238 (low 44120) down -1.43%. The Daily RSI which was at 69.39 as on 20-July-2023 when it was at its “All Time Highs” have cooled-off to current 44 levels. Yet, as per price study the reversal signals are still due.

Nifty PSU Bank Index closed firm at 4552.75 levels (UP+3.02%) while it was Private Bank Index which was under-pressure & ended the week down -1.44% at 22846 levels. The heavy weight pvt. Banks counter like Hdfcbank (-1.89%), Kotakbank (-2.45%), Icicibank (-0.94%), AxisBank (-1.52%) put pressure over Bank Nifty Index. The Index is expected to remain under-pressure trading below 45000-45200 zone with it’s major mid-term support zone between 43200-42800 levels.

BankNifty 17-Aug Weekly Option Chain Study suggests resistances at highest CE build-up strike of 44500 & 45000 levels while immediate maximum PE build-up is witnessed at around 44000 levels which will be first crucial support for the coming week. Overall, bias remains “Range to Down” below 45000 levels in days to come.

Indian markets:

• Benchmark indices closed with slight losses on Thursday.
• Investor sentiment was affected by the outcome of the RBI policy meeting.
• RBI’s decision to impose an extra 10% I-CRR for banks and raise inflation forecast had a negative impact on market confidence.
• Volatility was observed due to the expiry of weekly index options on the NSE.
• Media, metals, and oil & gas shares made gains, while FMCG, healthcare, and PSU banks faced pressure

Global Markets

• Indian equity market closed lower for the second consecutive day on August 11.
• Selling was observed in most sectors except for PSU banks.
• Weak cues from European and Asian markets, along with concerns about China’s potential stagflation due to reduced demand, impacted investor sentiment.
• These factors prompted investors to sell domestic equities.
• With FII flows becoming uncertain this month, the market’s upward momentum is facing challenges.

Stocks in Spotlight

• Mazagon Dock Shipbuilders declined by 5% due to the company’s less favorable quarterly results. Despite a 40% increase in consolidated net profit at Rs 314.34 crore compared to the previous year, the company experienced a 3% drop in revenue to Rs 2,172.76 crore, and EBITDA decreased by 1% to Rs 171.69 crore. Although the operating margin remained stable at 7.9%, the revenue decline was primarily attributed to slower execution in key contracts, including P-75 submarines, P-15B destroyers, and P-17A frigates. The company’s order backlog is healthy at Rs 39,117 crore as of June 2023, five times FY23 revenues, with potential upcoming projects from the Indian Navy.
• Reliance Industries Ltd (RIL) announced on Twitter that Jio Financial Services (JFS) shares have been credited to demat accounts. This comes after a special pre-open session for JFS’ price discovery held by the exchanges three weeks ago. However, it’s important to note that trading of JFS shares is not possible yet as the listing date hasn’t been announced.
• Muthoot Finance, a gold financing company, achieved over 21% growth in profit for the first quarter, marking its strongest performance in six quarters. This growth was driven by the surge in gold prices, which led to higher demand for gold loans. The company reported a profit of 9.75 billion rupees ($117.81 million) for the quarter ending on June 30. Muthoot also experienced a 19.2% increase in interest income, reaching 29.58 billion rupees. The rise in gold prices encouraged customers to pledge more gold as collateral, boosting credit sizes.

News from the IPO world🌐

• Aeroflex Industries to launch IPO on August 21st
• Westbridge, Nexus backed India shelter Finance files for Rs. 1800 crore IPO
• ITC likely to launch IPO for its Hotel Business in 2023

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