Markets to remain volatile ahead of F&O expiry

KS Badri Narayanan Chennai | Updated on July 28, 2021

S&P Nifty indicates a positive opening for Indian markets

Indian markets are expected to open positive on Wednesday, but analysts expect a volatile trading session to continue due to NSE F&O July contracts’ expiry on Thursday. Though the market is expected to move in a range in the first half, any short-covering ahead of derivative expiry could trigger a violent rally. However, if the market moves along with the global trend, one can see a sell-off too in the second half.

According to analysts, the focus is on foreign portfolio investors, who remain sellers in Indian markets in July. Until this time, the markets are expected to see downward bias, counter buying by domestic retail investors and institutions to keep the market in a range they added.

Now, most companies across sectors have announced their first-quarter results for FY21 and most of them are on expected lines, barring a few such as pharma which surprised on the negative side.

According to analysts, markets need fresh triggers for the return of FPIs. The spread of Covid delta variant virus and progress of monsoon will be closely tracked by them, they added.

The SGX Nifty futures at 15,775 indicates a significant gain for Indian markets at open, as Nifty July and August futures on Tuesday closed at 15,772.10 respectively, while Nifty closed at 15,746.45.

The US Stocks closed down, with tech-focused Nasdaq slumping over one per cent due to China’s move to curb technological stocks. Asia-Pacific markets such as Japan, Australia, Korea, China and Taiwan are also down over one per cent, signalling downward pressure to continue.

Mohit Nigam, Head, PMS - Hem Securities, said: Indian Benchmark saw a sudden sell-off on Tuesday with Sensex falling more than 300 points and VIX spikes to 8 per cent. The Hang Seng Index sank 4.2 per cent as speculation swirled that US funds are offloading China and Hong Kong assets. The mid-small-cap segment is witnessing high volatility in response to results.

"Stocks gave up gains today as investors were nervous on the selling across Chinese Markets by global funds coupled with the policies of the Chinese Authorities and the likely impact on Indian Markets despite knowing that it is also a positive for India,” said S Ranganathan, Head of Research at LKP securities.

Stocks to watch

GMR Infrastructure: Groupe ADP and GMR Group have executed an industrial partnership, demonstrating their intent to cooperate and a shared global vision for the airport sector. The objective of this strategic partnership is to leverage each party's expertise and resources, to improve service level and product offering to passengers and airlines, the company said.

HUDCO: The government's offer for sale has received 196 per cent of demand from non-retail investors on the first day. The OFS for retail investors opens today. Institutions' bids receive an indicative price of ₹45.03 per share versus a floor price of ₹45. The government will exercise the option for selling additional five crore shares in the offer, taking the total size to 16.01 crore shares, or 8% of the company's equity.

Larsen & Toubro to merge L&T Hydrocarbon Engineering, a wholly owned subsidiary, with itself. The scheme is subject to necessary statutory and regulatory approvals, the company said in a notice to the stock exchanges. L&T and L&T Hydrocarbon Engineering are in similar lines of business that can be combined to create a much more robust energy portfolio, the company added.

Axis Bank: The right of Bain to appoint a nominee Director has been extended for a further period of 3 years. As per the 2017 investment agreement between the bank and BC Asia Investments VII Limited, Integral Investments South Asia IV and BC Asia Investments III, Bain was given the right to jointly appoint one non-retiring non-executive director on the Board of Directors of the bank for four years, from December 19, 2017. The Board of the Bank on Tuesday approved the amendment to this investment agreement.

Jammu and Kashmir Bank: The Reserve Bank of India has allowed the Government of Union Territory of Ladakh to acquire 4.58 crore fully paid-up equity shares of Re 1 each, representing 8.23 per cent of the paid-up equity capital of Jammu and Kashmir Bank.

RITES has secured a road sector consultancy work order of ₹19.10 crore from National Highways and Infrastructure Development Corporation.

Cyient Australia Pty, a wholly-owned subsidiary, will acquire Workforce Delta, a global consultancy company, for $2.7 million. The acquisition is expected to be completed within one week, it said in a notice to the stock exchanges.

Astec LifeSciences has temporarily halted operations at manufacturing units in Mahad due to flooding caused by continuous rains in the Raigad district in Maharashtra, the company said in a notice to the stock exchanges.

Filatex India will increase polycondensation capacity by 50 TPD and put up additional manufacturing facilities for 120 TPD of Polyester Partially Oriented Yarn at the Dahej plant. The company at present has polycondensation capacity of 1,050 TPD. The expansion will cost the company ₹130 crore and is expected to be completed in 12 months, Filatex informed the stock exchanges. The company will also replace two existing POY lines (144 ends) with two new POY lines (192 ends) along with replacing winders in one POY line with new winders. The company presently has a yarn manufacturing net capacity of 110 TPD at its plant at Dadra. This proposed project will increase the POY capacity of the plant by 5 TPD. The project will cost the company ₹8 crore.

IPO Screener

Glenmark Life Sciences: Today is the second day for the public issue, which will close on July 29. The issue has been subscribed by 2.8 times so far. The portion reserved for retail investors was subscribed 5.16 times while those for non-institutional investors by 0.85 times. The portion for qualified institutional buyers has not opened for a subscription yet. The initial public offering (IPO) will have a fresh issue of equity shares worth up to ₹1,060 crore and the sale of up to 63 lakh equity shares by Glenmark Pharma.

The price band of the issue is ₹695-720 a share.

The company on Monday raised ₹454 crore from anchor investors. It will allot 63,06,660 shares to 19 anchor investors at ₹720 a share. HSBC Global Investment Funds, Government Pension Fund Global, Oaktree Emerging Markets Equity Fund LP, Copthall Mauritius Investment Ltd -ODI account, Societe Generale-ODI, Kuber India Fund and Reliance General Insurance Company are among the anchor investors.

Rolex Rings: The issue opens for subscription today and will close on July 30. The offer comprises a fresh issue aggregating up to ₹56 crore and an offer for sale by Rivendell PE LLC of up to 75 lakh Equity Shares. The price band is fixed at ₹880 to ₹900. On Tuesday, Rolex Rings raised ₹219.30 crore from anchor investors at the upper price band of ₹900 per equity share.

Results Calendar

ABB India, Astec Lifesciences, Birlasoft, Central Bank of India, Century Textiles & Industries, Coforge, Dhanlaxmi Bank, Embassy Office Parks REIT, Gateway Distriparks, Geojit Financial Services, Greenpanel Industries, Grindwell Norton, Happiest Minds Technologies, Heritage Foods, HSIL, ICRA, IDBI Bank, Intellect Design Arena, IVP, JK Agri, JM Financial, Maruti Suzuki India, Mahindra Lifespace Developers, Mahanagar Gas, Mold-Tek Packaging, MPS, Nestle India, Oracle Financial Services, Pfizer, Radico Khaitan, Ramco Systems, Route Mobile, RPG Life Sciences, Sagar Cements, SRF, Tata Coffee, TCI Express, TeamLease Services, Triveni Enterprises, United Breweries, Usha Martin, UTI Asset Management Company, Wabco India and Welspun India will release quarterly earnings on July 28.

Published on July 28, 2021

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