Primary Market Action Draining Liquidity from Small and Midcap Spaces: JPMorgan's Rajiv Batra

According to Rajiv Batra, Head of India, ASEAN, APAC, Ex-Japan/China Equity Strategy at JPMorgan, the current wave of initial public offerings (IPOs) and other primary market activities is depleting liquidity from the small and midcap sectors in India. Batra noted that while this might lead to a temporary cooling-off in these spaces, the situation also presents a potential opportunity for first-time and foreign investors to enter the market.

During an interview with CNBC-TV18, Batra discussed how market corrections, especially post-COVID-19, have been shorter and less severe. He encouraged retail investors not to chase rebounds, while stating that corrections provide ideal entry points for new and foreign investors who missed earlier rallies in the small and midcap sectors.

Batra highlighted India's significant outperformance in the global market, rallying nearly 660% over the past two decades compared to the U.S.'s 440%. He attributed this to India's strong earnings potential. However, he also acknowledged that the June quarter results were lackluster, and the upcoming September quarter might also underwhelm. Despite this, he expects earnings growth to rebound from the third quarter of FY25 onward.

JPMorgan forecasts a 12-15% earnings growth for Indian equities in FY25, with an uptick likely starting from Q3FY25. The central government's capital expenditure and a revival in the rural economy are seen as key contributors to this recovery. Batra also noted that the worst earnings downturn seems to have passed, based on the poor June quarter results.

Regarding the midcap sector, 52 out of 89 stocks experienced earnings downgrades in Q1FY25, while in the small-cap space, 40 out of 79 stocks faced downgrades during the same period. Despite these declines, Batra remains optimistic about the long-term growth prospects for India Inc.

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RITES Stock Soars 12%: Ex-Dividend and Ex-Bonus Trading Sparks Investor Excitement

Shares of RITES jumped by up to 12% on September 20, 2024, as the company traded ex-bonus and ex-dividend. The excitement among investors was palpable, with the record date for a 1:1 bonus issue and a ₹5 per share dividend set for the same day.

Bonus and Dividend Details
RITES announced a generous bonus issue, meaning shareholders will receive one additional fully paid-up equity share for each share they own. This announcement has generated considerable buying interest, driving the stock's performance on the National Stock Exchange (NSE).

Trading Highlights
At 10:43 AM, RITES stock was trading at ₹363.05 on the NSE, reflecting a more than 45% drop from the previous close before adjustment. However, on an adjusted basis, the stock climbed to ₹384, marking a significant increase on the trading day.

Eligibility Criteria
To qualify for the bonus and dividend, investors needed to purchase RITES shares before the record date. The dividend will be paid to shareholders registered in the Register of Members and included in beneficial ownership statements from NSDL and CDSL as of the close of business on September 20, 2024.

Strategic Partnerships
RITES has been in the spotlight for multiple developments this month. On September 4, the company announced a partnership with NBCC (India) Ltd to undertake a variety of consultancy and EPC contracts. This collaboration is expected to enhance RITES' service offerings significantly.

Recent Wins
The company also emerged as the Lowest Bidder (L-1) for a ₹60.03 crore tender issued by UP State Bridge Corporation Limited. This contract involves providing consultancy services for construction civil works, ensuring quality control and safety during the construction of bridges and elevated roads across various districts.

Conclusion: Positive Momentum
RITES' robust stock performance reflects a positive sentiment among investors, buoyed by its recent announcements and strategic moves. The combination of a favorable bonus issue and dividend, along with new business opportunities, positions RITES for continued growth in the competitive railway sector.

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Nifty 50 Eyes Further Gains: 15 Key Points to Know Before Market Opening

On September 17, 2024, the Nifty 50 achieved a new closing high of 25,419 with a moderate gain of 35 points. Positive signals from momentum indicators like RSI and MACD supported the bullish trend. Experts suggest that if the index decisively closes above 25,500 or breaks through its upward-sloping resistance trendline, the market could rally towards 25,800. The immediate support level is pegged at 25,200.

Here are 15 crucial data points to guide your trading decisions for the next session:

1) Key Nifty 50 Levels

• Resistance: 25,438, 25,460, and 25,494 (based on pivot points).
• Support: 25,370, 25,349, and 25,315.

2) Key Bank Nifty Levels

• Resistance: 52,262, 52,309, and 52,385 (based on pivot points).
• Support: 52,110, 52,063, and 51,987.

3) Nifty Call Options Data

• 26,000 strike has the maximum open interest, with 1.07 crore contracts, indicating strong resistance.
• 25,500 strike saw 47.47 lakh contracts of open interest, offering short-term insights into resistance levels.

4) Nifty Put Options Data

• 25,000 strike holds the highest open interest of 60.69 lakh contracts, acting as key support.
• Significant Put writing was observed at 25,400 strike, with an addition of 10.32 lakh contracts.

5) Bank Nifty Call Options Data

• 53,000 strike has the highest open interest at 34.85 lakh contracts, marking resistance.
• Heavy Call writing was noted at 52,500 strike, with 13.87 lakh contracts added.

6) Bank Nifty Put Options Data

• 52,000 strike saw the highest open interest with 36.11 lakh contracts, serving as critical support.

7) Funds Flow (Rs crore)

• DIIs bought shares worth Rs 874 crore, while FIIs net bought Rs 483 crore, signaling positive institutional interest.

8) Put-Call Ratio (PCR)

• The Nifty PCR increased to 1.3, indicating bullish sentiment, as traders are more inclined towards Put selling.

9) India VIX

• India VIX, an indicator of market volatility, rose by 1.04% to 12.59, still favoring bulls despite a slight uptick.

10) Long Build-up

• 30 stocks showed a long build-up, with rising open interest and price, suggesting continued bullish positions.

11) Long Unwinding

• 47 stocks saw long unwinding, marked by declining open interest and prices, indicating profit booking.

12) Short Build-up

• A total of 66 stocks experienced a short build-up, with increasing open interest and falling prices, indicating bearish sentiment.

13) Short-Covering

• 41 stocks witnessed short-covering, signaling traders closing their short positions due to rising prices.

14) High Delivery Trades

• Delivery trades showed strong investor interest in select stocks, indicating a preference for long-term holdings.

15) Stocks Under F&O Ban

• New Entries: Biocon, Punjab National Bank.
• Existing: Aarti Industries, Balrampur Chini Mills, Bandhan Bank, and others.

These insights provide a solid foundation for navigating the market's opening on Wednesday. Ensure you adjust your strategies based on key support and resistance levels to spot potential opportunities.

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