Utkarsh Small Finance Bank lists at 60% premium, L&T gains on buyback announcement

Technical Overview – Nifty 50

NIFTY50 on 21st July, witnessed a sharp gap down opening of more than 100 points and indicated a favorable day for the bears. As mentioned in yesterday’s report Nifty is trading near the extremely overbought zone and an immediate profit booking cannot be ruled out.

Overall it was a sell-on-rise day but Nifty manages to close above its immediate 9-day exponential moving average which is placed at 19,650 levels. The momentum oscillator RSI (14) has witnessed a U-turn from 80 levels which is an overbought level for an oscillator.

On the weekly chart, the index gained almost 1% and has formed a bearish shooting star candle stick pattern and prices need to close below the low for the pattern in the next week for the confirmation of the pattern. The highest call side open interest is at 19,900 & 19,800 and the highest put side open interest is at 19800 and the Nifty PCR ratio stands at 0.75 levels. The broader trend remains in the bullish tone but on the daily chart, we may see more downside towards 19,650 – 19600 levels. On the other hand, immediate resistance stands at 19,825 – 19,900 levels.

Technical Overview – Bank Nifty

This week the Bank Nifty has outperformed the benchmark index and has formed a tall bullish green candle with a gain of almost 3% suggesting a bull dominance. The Bank Nifty witnessed a flattish opening which is completely opposite to the Nifty and recorded a fresh all-time high at 46,369 levels in the first 15 mins of the trade.

The banking index formed an inside-day candle on the daily chart and showed strong support from the lower levels. On the weekly time frame, the Banking index has witnessed a horizontal trend line breakout and the index has sustained well above the upper band of the range. The 9 EMA is expected to act as an immediate support for the banking index which is placed at 45,500 levels. The highest call side open interest is at 46,000 & 47,000 and the highest put side open interest is at 46,000 & 45,000 levels and the bank nifty PCR ratio stands at 1.05 levels which indicates a mildly bullish outlook.

The broader trend remains in the bullish mode and on the daily chart any dips towards 45,800 – 45,600 levels should be used as a buying opportunity.  On the other hand, immediate resistance stands at 46,350 – 46,500 levels. In case if Bank Nifty slips below 45,600 levels then a drift towards 45,200 levels cannot be ruled out.

Indian markets:

• The tech-heavy Nasdaq experienced a significant overnight decline, which triggered a massive correction in local software stocks, led by Infosys. The company revised its revenue growth guidance downward due to a sharp decline in client discretionary spending.
• Concerns about expensive valuations had been rising as the markets saw a record upsurge in a short period. Investors used the weak US cues as an opportunity to reduce their holdings, despite India’s strong fundamentals.
• The benchmark indices, after a six-day winning streak, ended on a weaker note on July 21, primarily due to weakness in the Information Technology and FMCG stocks following weak Q1 earnings.
• At the close, the Sensex dropped 887.64 points (1.31 percent) to 66,684.26, while the Nifty declined by 234.20 points (1.17 percent) to 19,745

Global Markets

• Stock futures nudged higher on Friday, putting the Dow on track for a 10th day of gains and for tech stocks to recover from their stumble, as investors assessed the latest batch of corporate earnings.
• Futures on the Dow Jones Industrial Average (^DJI) were up 0.1%, after the blue-chip index bucked its peers with a Johnson & Johnson-led win on Thursday. Coming off losing sessions, S&P 500 (^GSPC) futures rose about 0.3%, while Nasdaq 100 futures added almost 0.5%.
• The market is starting to look ahead to big tech results from the likes of Microsoft next week, after uninspiring second-quarter updates from Tesla (TSLA) and Netflix (NFLX) dragged the Nasdaq Composite (^IXIC) to a 2% drop Thursday. In focus are signs the recent roaring rally in techs can keep going.
• Investors are also starting to brace for the Federal Reserve’s policy decision next week, as they grapple with the chances of the US economy avoiding a severe slowdown. A stream of encouraging data hias signaled it’s proving resilient in the face of the central bank’s rate-hike campaign.

Stocks in Spotlight

• Larsen & Toubro (L&T) gained 4 percent on July 21 after the company announced its first share buyback in its history. L&T will discuss a proposal for equity share buyback and a special dividend on equity shares for the financial year 2023-24 during its board meeting on July 25. The stock also reached a new 52- week high of Rs 2595.00 on the same day.
• Persistent Systems fell nearly 6 percent on July 21, a day after the Pune-based IT company reported 9 percent sequential fall in net profit at Rs 228.8 crore for the quarter ended June. Persistent Systems’ revenue in rupee terms grew by 3 percent QoQ to Rs 2,321.2 crore and topline in dollar terms also increased by 3 percent to $282.90 million for the quarter. The topline and bottom line numbers missed Street estimates.
• Mphasis shares slipped nearly after the IT services company posted lacklustre results for the first quarter of this fiscal amid global macro headwinds. The Bengaluru-based company’s revenue fell 4.6 percent YoY to Rs 3,252 crore in the quarter ended June, according to an exchange filing on July 20. Net profit declined 1.2 percent to Rs 396 crore from Rs 401 crore in Q1 FY23. EBIT margin was flat at 15.3 percent. New deal wins stood at USD 707 million. By close, the share recovered losses and ended over 5 percent higher.

News from the IPO world🌐

• IPO bound OYO strengthens its premium play
• Ola advances plan for IPO and electric scooters take off in India
• Utkarsh Small Finance Bank lists at 60% premium over IPO price

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