Traders will be hoping that the festival of lights revives the bullish streak in stocks. Nifty is set for its worst monthly drop in over four years amid record selling by foreigners in October. Indian markets are shut on Friday for Diwali. Automakers will be in focus as investors position for the crucial October sales.
Swiggy’s IPO may rhyme with history
The history of large-sized initial public offerings in India is a grim one. Issues that raised more than $1 billion have rarely delivered a meaningful listing day pop. Swiggy’s $1.3 billion offering is showing signs of joining that list as the grey market price is only 6% above 390 rupees, the upper end of the IPO’s price band. Besides, the 17% drop in rival Zomato’s shares over the last month and the dismal showing of Hyundai Motor India’s IPO could give retail investors some food for thought.
Traders brace for wild swings
Options traders are preparing for big swings in Indian equities after the verdict of the upcoming US elections next month. Since it is turning out to be a close contest, traders seem to be hedging their bets by buying strangles — a strategy to wager on volatility. Among the NSE Nifty 50 Index options expiring next week after the vote, calls with an exercise level of 24,500 and puts with 24,400 have added more than 60,000 contracts each in the past week, data compiled by the local exchange and Bloomberg show.
No festive cheer for Indian automakers
More bad news awaits carmakers, it looks like. The October sales data of automobile manufacturers due Friday, will likely disappoint. Nomura Holdings Inc. projects passenger vehicle sales dipping 2% in October from last year, while two-wheeler sales may rise a mere 7%. Nomura said it was “concerned about demand and does not see a revival as of now.” The Nifty Auto index has fallen nearly 13% over the last month and is among the worst-performing sectors.
Analysts actions:
Larsen Raised to Buy at ICICI Securities; PT 4,267 rupees
Container Corp Raised to Reduce at Avendus Spark; PT 805 rupees
Indian Oil Rated New Buy at DAM Capital; PT 181 rupees
And, finally..
Some bonds sold by Indian billionaire Gautam Adani’s conglomerate are among the best performers in emerging Asia for 2024 as the group regained investor confidence that was shattered by Hindenburg Research’s scathing report last year. Dollar notes sold by Adani Ports and Special Economic Zone Ltd maturing in 2041 returned 20% this year. Despite the market backlash in the wake of the report, “Adani Group has demonstrated financial strength through fundraising and earnings,” Ajay Manglunia, an independent debt capital market expert said, adding the good run may continue.