Street signs: Nifty faces resistance, cigarette stocks, and more

‘Hello, Sebi here’: FPI reps on speed dial

Capital markets regulator Securities and Exchange Board of India (Sebi) has embarked upon a drive to improve the transparency standards of foreign portfolio investors (FPIs) investing in domestic equities. Last week, it amended the Sebi (FPI) Regulations, imposing stricter timelines of just seven working days for furnishing vital information by overseas funds. Sebi also gained more power-specific documents from FPIs in the manner it wants. Sources say of late, officials at Sebi have also been directly calling custodians and other FPI representatives to fill information gaps. “Earlier, the regulator used to communicate through emails. Now, it is calling up FPIs directly,” observes a person in the know.

Trip or treat: Nifty faces resistance

After a weak start, the benchmark Nifty50 Index staged a smart comeback to end last week at 17,100. Analysts say the index faced resistance at 17,250, while on the downside, it is key that the index sustains levels of 16,900. “A Doji pattern, followed by a recovery candle on the daily chart, indicates the possibility of a bullish reversal. On the higher end, immediate resistance is placed at 17,250, where the bears may try to return to the market. However, if bulls take the Nifty above 17,250, the index may move towards 17,500–17,600. At the lower end, support remains intact at 16,950,” says Rupak De, senior technical analyst, LKP Securities.

Where there’s smoke: Cigarette stocks’ winning run may stay lit

Tobacco manufacturer ITC, Godfrey Phillips India, and VST Industries have gained since the Union Budget on February 1, even as the benchmark Sensex declined close to 3 per cent. Although there was a hike in taxes on cigarettes, it was not as harsh as expected. Analysts say these stocks could continue to do well. “Cigarette, as a product, is increasingly becoming price-inelastic. Companies operating in this space are in a sweet spot, especially when the earnings of other companies are under pressure due to fears of a global recession,” says an analyst. With the cigarette pack, ITC is the most-preferred bet for analysts, with a potential demerger and subsequent listing of its information technology business being other drivers for the stock.