Street signs: Nifty may hover between 9K-10K, MF equity flows, and more

Making most of large share sales

The month of May saw two large share sales —Rs 25,000-crore in Hindustan Unilever (HUL), and Rs 8,400-crore in Bharti Airtel (Airtel). The common factor in both share sales was that French bank Société Générale (SG) was the biggest buyer. In the case of HUL, SG picked up nearly 10 per cent of the shares on offer at an outgo of over Rs 2,400 crore. In the case of Airtel, it picked up nearly a fourth of the shares on offer by paying Rs 1,981 crore. At a time when overseas investors are in withdrawal mode, such huge investment is an encouraging sign. “Marquee long-term investors like SG are on the lookout for block deals in large companies. Such a huge acquisi-tion is not possible in the secondary market without price distortion,” said an investment banker.

Samie Modak

 

Nifty may hover between 9K-10K

The long build-up by foreign portfolio investors (FPIs) in index futures during the last few days and the fall in India VIX, a fear gauge, by 11 per cent in May has added to optimism that the Nifty50 index will see an uptick in the June series. The options data suggests a wider trading range between 9,000 and 10,000. Crucial support for Nifty is placed at 9,000-8,800 zone, while resistance can be seen around 9,900 and then 10,300 levels. Banking counters ended the May series in negative territory and formed a good amount of short positions. Some short covering was seen in bank stocks in the last few trading sessions. "If the Nifty Bank sustains above 19,500, we may see further short covering taking it towards 20,600 and then 22,000 mark. The immediate support for the index is at 18,200 level," said Chandan Taparia, derivatives analyst at Motilal Oswal Financial Services.

Ashley Coutinho

MF equity flows to moderate

Equity mutual funds (MFs) are expected to see further moderation in investor inflows during May. Industry players say the tally for the month could be lower than April. Despite a sharp rebound in the market, net equity inflows in April stood at around Rs 6,200 crore, nearly half that in the preceding month. Market players said the weakness in the market during the start of May could have weighed on investor sentiment. “The first trading session of the month itself saw the benchmark indices plunge 6 per cent. The weakness persists, especially in banking stocks. This coupled with rising covid-19 cases and extended lockdowns have hit inflows,” said an industry player.

Samie Modak