Street signs: Indian markets still weak, volatility mars PSBs' QIP plans

Analysts say till the time the Nifty trades below its 50-day moving average (DMA) the trend could be weak

Nifty still “not out of the woods”

 

After its second-worst fall of the year, the Nifty rose three straight trading sessions last week. While global markets are hitting new record highs, analysts believe the Indian markets are still “not out of the woods”. They say till the time the Nifty trades below its 50-day moving average (DMA) the trend could be weak. “The Nifty tested the 100-DMA and is still below the 50-DMA. If it breaches its recent low of 14,248, the market will be moved back to a downtrend,” says a note by MarketSmith India. Analysts say if the Nifty continues to hold above 14,500 it can move towards 14,800, and on the downside, it has support at 14,300. The index on Friday closed at 14,618.

               

Volatility mars PSBs’ QIP plans

 

Public sector banks (PSBs) are facing challenges in launching their qualified institutional placement (QIP) amid spike in volatility, said investment bankers in the know. “At least two PSBs are waiting to launch their fund raise but are waiting for the market conditions to improve. Also, investors who participated in the Bank of Baroda QIP are staring at mark-to-market losses, which too has dampened sentiment,” said a banker. After more than doubling between October and February, the Nifty PSU Bank index has cooled off in recent weeks. Shares of Bank of Baroda are down 17 per cent from QIP price.

 

Analysts positive on pipe makers

 

Shares of PVC pipe manufacturers have done well this year. Analysts believe there could be more steam left in the rally given the rise in prices of PVC pipes. After increasing 16 per cent during the March quarter, prices have edged higher this month. Over a 11-month period, the price of PVC pipes has doubled due to supply-side issues globally. Analysts said high PVC prices would boost organised PVC pipe manufacturers with consolidation gathering due to troubles faced by regional and unorganised players. Supreme Industries, Astral Poly Technik and Prince Pipes are among the stocks favoured by analysts.