Street signs: Banking stocks under pressure, FPI tally gets skewed and more

Banking stocks under pressure 

The performance of banking stocks is likely to weigh on the markets. Currently, the Bank Nifty spot price is quoting at a premium to the Bank Nifty futures contract for May, and so are the leading banking stocks, such as HDFC Bank and Kotak Mahindra Bank, to their respective futures. Analysts say this is an indication of bearish sentiment towards banking stocks. Ideally, the price of cash and futures converge or the latter trades at a slight premium. “The market is holding fort because of buying in select FMCG counters and Reliance Industries. Banks are clearly exerting downward pressure,” said an analyst.

Sundar Sethuraman

FPI tally gets skewed

Large block deals, such as the one seen last week in Hindustan Unilever (HUL), could skew the foreign portfolio investor (FPI) tally. Last Thursday's data showed FPIs pumped in record Rs 19,056 crore ($2.5 billion) into domestic stocks. This was solely on account of India's largest-ever secondary sale in Hindustan Unilever (HUL) by GlaxoSmithKline. Similarly, on Friday, FPI buying stood at Rs 1,725 crore ($300 million), which, market watchers say, was on account of block trade in Laurus Labs. The flow surge helped improve India’s year-to-date FPI tally from $4.5 billion outflows to now below $2 billion outflows. “It appears that some more block transactions in large-cap stocks are lined up. This would mean on the surface FPI numbers will look healthy but it may not reflect the real picture,” said an analyst.

Mayank Patwardhan

Nifty, Nifty Pharma converge

Both the Nifty 50 and the Nifty Pharma indices converged last week at around 9,300 levels. While this is just symbolic, both the indices have had dramatically opposite trajectories this year. Nifty, which tracks stock price movements of India’s large 50 companies, started the year at 12,000 levels. On the other hand, Nifty Pharma, a barometer for the performance of healthcare stocks, was at 8,000 during the start of the year. “During the start of the year, pharma stocks were hardly on anyone’s radar. In the past one month, they are the flavour of the season," quipped an analyst. Currently, both are at similar levels. It will be interesting to see who ends 2020 where.

Samie Modak