Siemens’ Surge, ITC’s stake sale by BAT, Mankind’s Expansion

Technical Overview – Nifty 50

The Benchmark index after a weekend opened marginally above 21,400 levels with a flattish undertone and traded within the narrow range throughout the day with a bullish bias intact. The prices have formed a spinning top candle stick pattern on the daily chart. After a sharp move a time correction normally occurs with a spinning top formation.

On the weekly chart, the Nifty50 has formed a continuation gap and prices have closed in the green for the consecutive 7th week. The prices have given a consolidation breakout and the Index has gained more than 6% return in the past two weeks. The volatility index ‘INDIAVIX’ is currently at elevated levels above 13 and it needs to cool off.

Well, amidst overbought technical conditions, the benchmark may consolidate in the near term but that said, the near-term outlook for Nifty continues to be in favor of the bulls. The view remains to buy on dips for the index towards 21,300 – 21,200 levels and the upside can be extended to 21,700 levels.

Technical Overview – Bank Nifty

After strong back-to-back weekly gains, Bank Nifty witnessed a gap-down opening on 18th December and remained in a bearish under-tone for the day where PSU banks were trading lower with minor discomfort.

The prices were trading in red but were within the previous day’s candles range which indicates minor profit booking after a strong rally. The Bank Nifty on the daily chart has witnessed a rectangle pattern breakout and the post that the index is trading in a higher high higher low formation indicates a strong bullish trend. The index is trading comfortably above its short and medium-term averages on the daily time frame, which is a positive sign for the index.

The volatility index ‘INDIAVIX’ is currently at elevated levels above 13 and it needs to cool off. The trend for Bank Nifty remains bullish with a buy-on-decline approach and the upside is open for 48,300 – 48,500 in the near term. The immediate support for the Banking index is placed near its continuation gap which is placed at 47,500 levels.

Indian markets:

• The key equity benchmarks ended with major gains on Friday, rising for the third straight day. The Sensex and the Nifty, both, attained record closing high levels. After opening at 21,287.45, the Nifty 50 index marched higher as the session progressed to settle above the 21,450 marks. IT, PSU bank and metal stocks advanced while realty, FMCG and media shares declined.
• India’s merchandise trade deficit in November stood at $20.58 billion, based on export and import data released by the government on Friday. India’s merchandise exports in November stood at $33.9 billion, while imports were $54.48 billion, government data showed.
• In the previous month, merchandise exports were $33.57 billion, while imports stood at $65.03 billion. Services exports in November were $28.68 billion, while imports were $13.4 billion. In October, services exports were $28.70 billion and imports were $14.32 billion.

Global Markets

• Markets in Europe and Asia edged higher on Friday as Wall Street continued to rally after the U.S. Federal Reserve held rates and laid out a roadmap for cuts in 2024 and beyond. Investors await key economic data out of China, including November house prices, industrial output, and retail sales data.
• Japan’s manufacturing activity contracted in December for the seventh straight month, according to a private survey. A flash reading of the au Jibun Bank Japan manufacturing purchasing managers index shrank to 47.7 in December from 48.3 in November, signaling the quickest deterioration in manufacturing business conditions for ten months. The au Jibun Bank flash services PMI, however, was 52.0 in December versus 50.8 in November, the fastest gain in the three months.
• US stocks ended higher on Thursday lifted by optimism that borrowing rates will decrease next year following a dovish pivot by the Federal Reserve. The 10-year Treasury note yield dropped below 4% for the first time since August as traders bet on rate cuts for 2024 mount.

Stocks in Spotlight

• Siemens Ltd experienced an impressive 8.6 percent surge in its stock value following a pivotal decision by the board of directors. They greenlit the initial steps toward exploring a potential demerger of the company’s energy business. This strategic move was set in motion after promoters urged the board to seriously contemplate spinning off the energy segment into its own separate entity. The market responded positively to this development, reflecting investor enthusiasm for the potential changes ahead.
• ITC faced a 1 percent decline as British American Tobacco (BAT) hinted at reducing its substantial 29.02 percent stake in the company. The CEO of BAT expressed openness to maintaining strategic influence with less than 25 percent ownership. However, divesting from ITC shares poses complexities due to India’s stringent regulations on foreign ownership within tobacco companies. These restrictions create hurdles in finding international buyers, thus complicating BAT’s potential divestment plans. The market responded to this uncertainty, reflecting the impact of this announcement on ITC’s stock value.
• Mankind Pharma saw a 1 percent increase in its shares following the acquisition of an additional 1.29 percent stake in Actimed Therapeutics, a UK-based pharmaceutical company. This move bolstered Mankind Pharma’s overall holding to 10.19 percent in Actimed Therapeutics, marking a strategic investment for Mankind in the realm of treating conditions like cancer cachexia, amyotrophic lateral sclerosis, and various muscle-wasting disorders. The market responded positively to this expansion, reflecting investor confidence in Mankind Pharma’s strategic vision and diversification within the pharmaceutical landscape.

News from the IPO world🌐

• Motisons Jewellers IPO sees over 15-fold subscription, retail portion booked 22 times on debut
• Inox India IPO subscribed 13.67x on the last day so far
• Azad Engineering to launch IPO on December 20, sets price band at Rs 499-524

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