Investors still chary of mkt direction

Navigating through negatives like FII selling, strong dollar and rupee depreciation; the domestic stock market started the new calendar year on a positive note. However, the market concluded the week with a pessimistic note as a sell-on-rally sentiment prevails in the market. In the near-term, significant market attention is expected for the upcoming Q3 results, with an anticipated improvement on a QoQ basis. The earnings season begins on Thursday (January 9) with the announcement of Tata Consultancy Services’ (TCS) October-December quarter results. The market will also react to the Q3 updates of top companies like Vedanta, Bajaj Finance, Bandhan Bank and Adani Wilmar among others. Further, the investors are likely to align their portfolios based on pre-budget expectations. Market observers feel that ‘Uncertainty’ surrounding Trump’s economic policies and high valuations may impact the stock market in the short term, particularly in emerging markets.

IPO Musings: The year 2025 is likely to be bigger and better for the primary markets with some experts predicting the primary market fundraising to cross Rs2 lakh crore. Currently, as many as 100 companies have filed their draft offer letters with markets regulator Sebi, which have either received approval or awaiting clearance. The first full week of the new calendar year 2025 is set to be busy for the primary market as investors will see seven new public issues hitting Dalal Street with 6 companies scheduled for listings. These seven companies including InvIT plan to raise more than Rs2,400 crore through initial public offerings next week starting from January 6. Standard Glass Lining Technology that manufactures engineering equipment for pharmaceutical and chemical sectors. Quadrant Future Tek develops new generation train control and signalling systems under Kavach project of the Indian Railways. Capital Infra Trust, an infrastructure investment trust, Indobell Insulation, BR Goyal Infrastructure, Delta Autocorp, Avax Apparels & Ornaments are the other IPO’s on cards in the coming week.

F&O/ SECTOR WATCH

Amidst heightened volatility, derivatives segment witnessed a brisk trading accompanied by some short covering and fresh bouts of selling. In the options market, the highest Call Open Interest for Nifty was seen at the 24,500 and 24,200 strikes, while the notable Put Open Interest was at the 24,000 and 23,700 strikes. For Bank Nifty, the prominent Call Open Interest was seen at the 52,000 and 51,500 strikes, whereas notable Put Open Interest at the 51,000 strike. Implied Volatility (IV) for Nifty’s Call options settled at 13.15 per cent, while Put options conclude at 14.07 per cent.

STOCK PICK

Kabra Extrusion Technik Ltd is manufacturer and exporter of extrusion plants; a leading player in India’s plastic extrusion sector, is a part of the prestigious Kolsite Group. KET enjoys market leadership status in the extrusion market with ~40 per cent market share as on FY24. It has two manufacturing locations in Daman. Buy on declines for target price of Rs900 in medium term.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)