Gift Nifty Indicates Positive Start For Indian Markets | Trade Setup: September 13 - video Dailymotion

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Trade Setup | Inflation data constructive, could help sentiment on rates in the medium-term. #BQLive

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00:00 Good morning and thanks so much for tuning into the trade setup after a day of some serious

00:05 correction in the mid cap and the small cap end of the market, particularly on the PSU

00:10 side.

00:11 But first, the global news flow.

00:13 NASDAQ closed lower by about a percent on Tuesday as Apple slid and tech suffered.

00:18 Oracle too shed about 13%.

00:20 Remember, Oracle was down about 10, 11% in pre-open since day before yesterday.

00:26 Taiwan is born.

00:28 China will ratchet up.

00:29 The military pressure after record number of warships sail nearby Taiwan.

00:35 Oil jumped 2% to near 10-month highs as OPEC predicted tight supplies.

00:40 And Apple raised prices of iPhone 15 Pro Max by $100 to $1199.

00:46 It was an interesting event.

00:47 I've read some of the reviews, but the team at BQ Brown has done some fabulous work.

00:52 And if you go to our social media pages, you will see a bunch of activity from there.

00:58 So could be interesting information for you.

01:00 Nevertheless, US stocks, like I said, Apple was probably one reason and then some others

01:05 as a result of which NASDAQ in particular was down about a percent.

01:09 The Dow was flattish, S&P 500 down about half a percent.

01:13 Ears have stayed steady 4.29, 4.28 or thereabouts.

01:16 So no big changes there.

01:18 4.28 S&P 500 Wicks went up a little bit.

01:23 The dollar index too, steady at about 730 AM.

01:27 The GIFT-NIFTY indicates a start which is marginally in the green.

01:31 Now that may happen, may not happen.

01:32 The inflation numbers are positive.

01:34 So sure, the headline numbers may look OK, because frankly, let's bring up the trade

01:38 setup plate as well.

01:39 If you just look at what happened yesterday, the NIFTY and the NIFTY Bank were both flat.

01:44 The NIFTY Bank was down about 0.13%.

01:46 So both the major indices were flattish and great.

01:49 They didn't buckle.

01:50 It seemed like a very bad market because mid caps and small caps really cracked.

01:56 More so the small cap end of the market, which is down 4%, and more so the PSU basket, which

02:01 was certainly, certainly lower.

02:03 Some sharp cracks that came in into the PSU names in particular, you know, I mean, 10,

02:08 11, 12% is not a normal day's play.

02:11 And as a result of which it looked slightly wobbly at the broader end of the spectrum.

02:15 The inflation data is constructive in India, could help the sentiment on rates in the medium

02:20 term.

02:21 But the mid cap crack, remember, had fundamental reasons beyond valuations too.

02:26 And these factors, now, whether it's of personnel in a global fund and a lot of rumors doing

02:37 the rounds, lots of talks doing the rounds, as mainstream media, I don't want to kind

02:42 of dwell upon too many things of it, but I think it could settle in the next few days.

02:46 So remember, you know, when cracks come in at the broader end of the spectrum, if the

02:52 valuations are supportive, then the cracks get easily absorbed.

02:56 If they were any trading at premium valuations, then there could be some bit of a downtick

03:00 that could follow in the next few days before there is a bit of sanity.

03:04 Now it could happen today, it could happen over the next few days.

03:06 So bear that in mind.

03:09 Two important data points that came out yesterday, CPI and IP.

03:12 Now, CPI was the important one, right?

03:14 So Nomura's note on CPI, Sonal Verma and colleagues write that the underlying inflation pressures

03:19 continue to ease.

03:22 They expect a sharp fall in CPI inflation to circa 5.5% YOY in September, which brings

03:28 it back within the RBI's target range.

03:31 They see continued fall in vegetable prices, an impact of cut in LPG cylinder prices and

03:37 capped for inflation pressures leading to this.

03:41 Inflation risk spike amidst stable growth could and according to them should solidify

03:46 RBI's policy hold.

03:49 They expect the first rate cut in February with about 100 basis points of easing through

03:54 2024.

03:55 You know, there's not a bad inflation print.

03:59 And I remember Michael Patra, Dr. Michael Patra clearly saying that they are not worrying

04:05 too much about the vegetable prices because they hope, he used the term hope, because

04:09 he's careful, right?

04:10 He used the term hope that the prices will come off.

04:13 And I think we've seen the signs of that.

04:15 Hopefully in the next couple of months, this whole vegetable inflation, especially around

04:19 the festive season, eases and that only aids the rural side meaningfully.

04:30 Certainly hope that happens.

04:31 The other thing that will happen today is RR Cable's IPO.

04:34 It opens today.

04:35 The wire and cable manufacturer plans to raise about 180 crores via Fresh Issue and 1784

04:41 crores via OFS.

04:44 The price band is fixed at 983,2035 a piece.

04:48 Analysts recommend subscribe for listing gains as well as holding for the longer term.

04:52 Now, you know, a lot of people argue that when an IPO comes in, the other companies

04:57 in the in the listed space also get a boost.

05:00 You know, Polycap doesn't require a boost.

05:02 Their stock is trading at premium valuations nevertheless, and that's the leader.

05:07 And some of the others will be followers.

05:09 But yeah, watch out for RR Cable, DPG backed, a solid company, products being used on an

05:15 everyday basis at multiple homes.

05:19 This one could see some fanfare.

05:21 So be mindful of that.

05:22 But remember, the IPO or the issue is not that high.

05:26 It's only 180 crores.

05:27 The point is the OFS is the larger portion.

05:30 So bear that in mind.

05:32 OK, now I was talking about PSUs among stocks to watch those come top of the mind.

05:39 And what we've done is we've tried to take the percentage cuts that happened yesterday

05:44 and the delivery percentages or the quantum of stock mark for delivery.

05:49 As you can see in a clutch of names, and I've only included five because I can't include

05:53 everything.

05:54 But in a lot of these names, Cochin, Shipyard, RVNL, BHEL, their delivery percentages are

05:59 very, very low.

06:00 So it's not that a lot of people came in to buy because the stocks were down 10, 11 percent.

06:05 It happened maybe in an EIL 44 percent mark for delivery, which is pretty good.

06:09 The otherwise just came off.

06:13 And therefore, that is a problem that's happening in the PSUs as well as the small caps.

06:17 Now there's a viewer query that should we invest in small caps with reasonable valuations?

06:24 I think that's a query that is coming on the show.

06:27 You know, here's the deal that in the way I think about it, Vasu, good morning, is that

06:34 when the tide turns, even the good ones take a hit.

06:39 Sure, in yesterday's session, ITI, for example, PSU, small cap, but went up, clocked in a

06:46 high of 175.

06:47 So there are these anomalies, but largely stocks will probably come off lower.

06:52 And therefore, let's see how the trade stabilizes, whether it does today, whether it does tomorrow.

06:58 It is better to buy a stock which is falling after it stabilizes and moves up a little

07:04 bit.

07:05 It's OK to buy it 5 percent higher.

07:06 That's what all the wise men tell me.

07:08 So Vasu, small caps with reasonable valuations is a great pocket to look at.

07:13 The timing you've got to figure out.

07:15 I mean, you can buy it right now as well, provided you are OK with seeing the stock

07:20 drift down a little more if indeed the wider small cap space comes down.

07:23 So just bear that in mind.

07:25 An SIP is not a bad idea if you know the stocks that you want to buy in the small cap universe,

07:31 because you don't know when they will stabilize.

07:32 They could stabilize today, they could stabilize five days from now, or they could stabilize

07:36 maybe later as well.

07:37 So maybe do an SIP.

07:38 At least you buy it at all price points and don't have to grumble later on.

07:44 So I hope this helps.

07:46 Nevertheless, stocks to watch in the session today.

07:49 There are not too many, but watch out for the oil upstream companies because OPEC has

07:56 signaled a supply crunch as a result of which crude prices have only inched higher.

08:00 So maybe ONGC and Oil India could be in focus today.

08:04 So watch out for them.

08:05 KEC International has secured new orders worth 1000 crores.

08:08 Maybe that stock could be in focus.

08:10 Now normally for an announcement like this, the rights would have shot up.

08:14 They signed an MOU with CFM Angola for cooperation in the development of railways and related

08:19 infrastructure, including the supply of rolling stock.

08:22 Remember, there is no financial tangible benefit that has been announced.

08:26 But this is good because it's a large company in Angola with which this has been signed.

08:32 So this is more Indian companies helping other states or other countries get up to date on

08:40 development and infrastructure.

08:41 This could be potentially beneficial for rights, whether that is captured in the price or not,

08:46 anybody's guess.

08:47 But like I said, railways, defence, PSUs under the eye of a storm currently, maybe this sees

08:55 some positive reaction today.

08:57 Maybe it just doesn't.

08:59 Like I said, it's anyway a great statement of intent.

09:01 Don't quite know when the financial benefits coming.

09:04 Vari Renewable has received a letter of intent.

09:06 So it could be interesting.

09:08 The other piece is there were new banking norms that were announced yesterday.

09:19 And I just thought I will get to you what Jefferies has to say when it comes to that,

09:23 the new investment norms.

09:24 According to Jefferies, it lowers the earnings volatility and opens the door to MTM gains.

09:31 So they say that the new norms on classification of investment aim to take India closer to

09:36 IFRS with limited disruption.

09:39 So across three classifications, various things being mentioned, but the new point is the

09:45 third line as the MTM changes in AFS will be, changes in AFS will be via reserves, volatility

09:53 in P&L may fall.

09:58 So logically doesn't seem to be too negative.

10:03 But this is the view from Jefferies.

10:05 We'll try and get what has to be, what a banking analyst has to say sometime during the course

10:17 of the day.

10:18 So please be mindful on that as well.

10:21 So that's a few things.

10:27 What else?

10:28 PNC Infratech, HDFC, MFS, hike the stake.

10:33 Like I said, Oracle was down and therefore OFSS would be in focus as well.

10:39 So do watch out for that one.

10:44 Then largely, these are the set of things that IOL Chemicals has said that they may

10:52 increase the prices as well as per some media reports.

10:55 So these are two or three names that I thought I should bring to your notice.

11:01 OK, viewers, thanks for tuning into the Trade Setup.

11:04 Have a great day.

11:05 I thought it's best with the Nifty at 20k, but the Midcap is doing what they are to try

11:10 and get in a large global view.

11:12 Mark Matthews of Bank Julius Baer, Johnson on Talking Point today to give his view on

11:18 life beyond 20000 for the Nifty.

11:20 Do try and tune in for that.

11:22 The Mutual Fund Show today at 4 with Rishabh Desai and Vrind Agarwal to tackle a couple

11:30 of important topics you might want to tune in for this one as well.

11:33 And of course, the normal trade talk conversations happen at 8.30, 11 and 3.50.

11:38 Hope they help you in your trading.

11:42 Thanks so much for tuning in to the Trade Setup.

11:52 [BLANK_AUDIO]

Gift Nifty Indicates Positive Start For Indian Markets | Trade Setup: September 13

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