Street Signs: Nifty's battle at 18,800, IPOs tread with caution, and more

Nifty’s battle at 18,800: Can bears break the barrier?

Bears have tightened their grip on the market, with the National Stock Exchange Nifty50 declining nearly 5 per cent in just six trading sessions before seeing a slight recovery on Friday. On Thursday, the benchmark index had slipped to as low as 18,838. Experts say it is crucial for the Nifty to stay above 18,800; otherwise, another 3-5 per cent slide cannot be ruled out. “The Nifty has ended its three-month-long consolidation phase and tested the long-term moving average after six months. It has already retraced nearly 7 per cent from its record high, but a breakdown below 18,800 could trigger the next leg of a slide to 18,200–18,500. In case of a rebound, the hurdle around the 19,200–19,500 zone would cap the upside,” believes Ajit Mishra, senior vice-president, technical research at Religare Broking. The Nifty closed last week at 19,047.

IPOs tread with caution: Cello and Honasa GMPs retreat

The grey market premiums (GMPs) for the two initial public offerings (IPOs) opening this week are positive, despite a sharp decline in the markets. The GMP for Cello World, a maker of writing instruments and consumer houseware, is around 15 per cent, while that for Honasa Consumer, which owns popular brands like Mamaearth and Bblunt, is around 5 per cent. In both cases, the GMPs have decreased by around 5 percentage points amid a 4 per cent drop in the benchmark indices in the past seven trading sessions. Cello’s Rs 1,900 crore IPO opens on Monday, while Honasa’s Rs 1,700 crore issue opens a day later. Experts suggest that for the IPO momentum to be sustained, the secondary markets need to stabilise. About half a dozen companies plan to launch their offerings in November.
 

IndusInd Bank’s unshaken climb on index inclusion buzz

Shares of IndusInd Bank have shown remarkable resilience lately. In the past six months, the stock has gained 25 per cent, even as the National Stock Exchange Nifty Bank has declined by 1 per cent. Last week, when the index came off 5 per cent in six sessions, the stock barely fell 1.5 per cent. Experts say the strong performance is based on optimism that the private sector lender will be added to global indices following an increase in the foreign room to 15 per cent. Despite outperforming its peers over the past six months, IndusInd Bank trades at cheaper valuations, and there could be more relative upside here. “We estimate passive trackers will need to buy 26.45 million shares (worth Rs 3,740 crore at the last close) of IndusInd Bank at the close on November 30,” said Brian Freitas, a New Zealand-based analyst with Periscope Analytics, in a recent note.