Markets scaled to new highs on the back of retail buying with Nifty 50 hitting an all-time high while Sensex 30 is still away by 0.7% and India VIX surged by 5%. The markets have entered into a crucial juncture from where reversal would have serious implications, and this can be gauged from the formation of the rising wedge in ‘Next Notes Nifty 2x Leverage ETF’ which is widely traded in the Japanese markets. The India VIX which bottomed out at 9.85 would provide a warning well ahead of a major price decline in Nifty 50 if the current rise in India VIX continues. The immediate downward implication for Nifty based on ‘Next Notes Nifty 2x Leverage’ shows 8% lower and hence Sensex needs to sustain above all-time high in order for Indian markets to come out from major risk reversal followed by lower reading in India VIX below 11.
Sensex Chart
Stocks to watch
Positive Read through
- Reliance – KKR to invest Rs. 20,695 mn in Reliance Retail at an equity valuation of Rs. 8.36 lakh crore.
- L&T – Buyback price increased from Rs. 3,000/Sh to Rs. 3,200/Sh.
- Shree Cement, Dalmia – According to Nomura, cement prices in East India have been raised by Rs 35 per bag.
- Icici Bank – Sandeep Bakhshi has been re-appointed as MD and CEO by the RBI for another 3 years.
- Lupin- Enters a business transfer agreement with arm LMSL to carve out API manufacturing sites.
- Power grid – winning bidder to build inter-state transmission system in Rajasthan.
- Steel Strips And Wheels In India – DGTR imposes duty on imported flat-bodied steel wheels.
- KIMS Hospital – Arms acquires an additional 13.24 pct Stake in Kondapur Healthcare.
- KNR – HDFC MF Purchases 1.5 mn shares (0.6 pct of total equity) Via blocks deal at Rs. 273.50/Sh.
- Rishabh Instruments – 1 mn shares bought by Nippon India mutual fund and 0.4 mn shares bought by Quant mutual fund via block deal.
Negative Read Through
- L&T Fin – Bain Capital likely to sell up Rs. 8,500 mn stake via at a floor price of Rs. 129.72 per share via block deal.
- TVS Supply – Sales declined by 12.4 pct in Q1FY24, and Losses expanded YoY.
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