Street signs: Nifty at crucial juncture, Sebi's valuation norms, and more

Nifty at crucial juncture

The benchmark Nifty on Friday managed to bounce off its key support level of 14,300. The 50-share index ended at 14,507, below its 50-day moving average of 14,765. Technical analysts say the Nifty is currently at a crucial juncture and a breakout on any side can have big implications for the market. “If the Nifty fails to trade convincingly above the 14,550-mark, that will confirm a lower bottom on weekly charts and portend further weakness in times to come. The Nifty is facing stiff resistance around 14,700-14,800 zone. A convincing move beyond this resistance zone can open further upside,” says Devarsh Vakil, deputy head of retail research, HDFC Securities.

Metal stocks defy correction

The markets are undergoing a turbulent phase but metal companies seem in a bull market. Since February 15, the Sensex has corrected 6 per cent, but the BSE Metal index has gained 12 per cent. Last week, the index rose 2.3 per cent, even as the Sensex fell 1.7 per cent. Analysts say there are certain structural changes underway that will benefit steel companies in the long run. They include China’s goal to achieve carbon neutrality by 2060. As part of this objective, steel production in China will be cut 0.3-2.3 per cent this year, leading to an export decline of 30-54 mt. Analysts say this will lead to higher international steel prices, and Indian steel majors like Tata Steel and Jindal Steel and Power will be in the best position to benefit.

Valuation norms divide MF industry

Sebi’s 100-year valuation norms for perpetual bonds had the Rs 31-trillion MF industry divided. On March 10, the regulator proposed the maturity for additional tier 1 (AT1) and tier 2 bonds should be considered as 100 years. Sources said a set of top fund houses were on board with Sebi’s move, while others wanted to lobby with the regulator to continue with the existing norm, where the call-date was considered as the maturity date. Luckily for the industry, the finance ministry intervened, following which Sebi gave the industry time until April 2023 to implement the 100-year valuation norm.