Aditya Birla Capital initiates QIP issue, Mixed analyst reactions impact Apollo Tyres today

The Markets Today in a nutshell

Technical Overview – Nifty 50

The benchmark index on the daily chart has witnessed a rising channel pattern breakdown and prices are sustaining below the lower band of the pattern from the past couple of days. The benchmark index witnessed a lazy start for the monthly expiry week where prices traded within the range of 50 – 60 points for the day. 

Writing in OTM options for CALLs is seen in the range b/w 18800-18900 strikes whereas, PUT Writing is within 18700-18600. Based on active OI additions, the V-WAP Resistance is placed near the highs at 18800; while Support is at 18600.

There are signs of profit booking at higher levels. Immediate support is near 18500 which is an important level, a break below it would add a bearish signal. The upside index has to break from 18750 – 18,800 to regain strength.

Technical Overview – Bank Nifty

BANKNIFTY continues to trade in a very defined range of 500 points from more than seven trading sessions, suggesting a lackluster momentum in the index. The Bank Nifty continues to hold above its 50–day exponential moving average, which is at 43,334 levels. 

The daily strength indicator RSI and MACD have both turned neutral and are sustaining near their respective reference lines. Maximum writing in OTM options for CALLs is seen at 44,000 strikes whereas, the highest PUT Writing is at 43,500. Bank Nifty stands at strong support in the lower band of the rectangle pattern on the daily chart. 

If prices fail to hold at 43,300 then it’s likely to see a breakdown of a pattern toward 43,000 – 42,800 levels, and the upper band of the index is capped at 44,100 – 44,400 levels.

Indian markets

• Equity benchmarks ended the day nearly unchanged after a volatile session on Monday.
• The Nifty index closed above 18,650, rebounding from its intraday low of 18,646.70.
• Global stocks were under pressure due to concerns about economic growth linked to political instability in Russia.
• The instability in Russia, a significant oil producer, raised fears of potential disruptions in the oil market, leading to a rise in crude oil prices.
• On the domestic front, the pharma and auto sectors provided support to the indices, contributing to their overall stability.
• Mid and small-cap stocks recovered from a recent sell-off, suggesting a resurgence of investor confidence in these segments.

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Global Markets

• Markets in Europe and Asia traded mostly in the red on Monday as investors worried about the potential for drawn-out monetary tightening cycles hitting global growth as well as the weekends political turmoil in Russia.
• A failed mutiny by Russian mercenaries over the weekend raised concerns about political instability in Russia and the potential impact on oil supply from one of the worlds largest producers.
• Meanwhile, in Japan, the consumer price inflation showed some signs of cooling as the countrys CPI eased to 3.2% y-o-y in May, lower than forecasts of 4.1%, while core CPI rose 3.2% y-o-y in May, beating estimates of a 3.1% rise.
• US stocks closed lower on Friday, capping a week dominated by Federal Reserve Chairman Jerome Powells testimony in which he signaled more interest rate hikes ahead but vowed the central bank would proceed with caution.

Stocks in Spotlight

• Aditya Birla Capital announced on June 26 that it has initiated a Qualified Institutional Placement (QIP) issue, setting the floor price at Rs 175.99 per share, according to a regulatory filing. In addition, the company’s stakeholder relationship committee approved the allotment of 7,57,11,688 shares at a price of Rs 165.10 each to Grasim Industries and Surya Kiran Investments, both part of the promoter group. This allotment represents an aggregate consideration of Rs 1,249.99 crore.
• Following an investor meet, Apollo Tyres Ltd experienced a nearly 3% drop in stock value due to mixed reactions from analysts. While Kotak Institutional Equities and Nomura maintained their ratings, they set their target price below the current market price. On the other hand, JM Financials and Motilal Oswal Securities increased their target price by up to 20%. Apollo Tyres emphasized during the meet that their strategy will prioritize enhancing return on capital employed and profitability, rather than solely focusing on market share growth.
• Shree Cements‘ stock value dropped by 6% in response to allegations of tax evasion amounting to Rs 23,000 crore. According to a report by NDTV, these allegations surfaced during tax searches at Shree Cements’ offices in Beawar, Jaipur, Chittorgarh, and Ajmer in Rajasthan. The alleged tax evasion has significantly impacted the company’s market performance.

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