Street signs: Nifty on the brink, IPOs in deep freeze, and double jeopardy

The benchmark Nifty 50 ended at 22,796 on Friday, its lowest close since June 5. Technical analysts say the market remains in a downward trend after breaking key support at 22,800. They stress that holding above 22,500 is crucial to avoiding steeper losses. “With the key support level of 22,800 breached, the decline may continue. The next critical support to watch is 22,500, while resistance levels stand at 23,000 and 23,200. We expect Nifty to trade within the 22,500-23,200 range over the coming week,” said Gaurav Garg, research analyst at Lemonn Markets Desk. A note from Bajaj Broking added, “A breakdown below the 22,700 support area could trigger further declines towards 22,500-22,400. Conversely, holding above 22,700 will lead to consolidation in the range of 22,700-23,050 in the coming week.”

 

IPOs in deep freeze: Market jitters put plans on ice

 

Uncertainty around initial public offerings (IPOs) persists as selling pressure in the secondary market continues. Last week, bankers advised an IPO-bound company to hold off on filing its updated draft red herring prospectus, citing unfavourable market conditions. In another case, an issuer and its banker disagreed over the extent of the valuation cut needed to reflect the current market reality. This standoff highlights the difficulty companies face in pricing IPOs amid volatility. Markets are now at their lowest in eight months. Except for one session, the benchmark indices have fallen in 14 of the last 15 trading days, with investor sentiment hit further by US President Donald Trump’s trade policy salvos. “Even some IPOs in advanced execution stages have been put on hold. Unless US trade policy stabilises, we expect choppy markets and a weak pipeline for equity fundraising,” a banker said.

 

Double jeopardy: L&T Tech faces index ejection and F&O lockout

 

L&T Technology Services (LTTS) faces twin setbacks with its removal from the Nifty IT index and the futures and options (F&O) segment, both effective March 28. Analysts say these changes could lead to short-term underperformance for the stock. “LTTS will exit the F&O segment at the close on March 27. Open interest stands at 900,000 shares, and there will be unwinding,” said Brian Freitas, an Auckland-based analyst with Periscope Analytics, who publishes independent research on Smartkarma. Freitas also estimates that the stock’s exclusion from the Nifty IT index could result in selling worth nearly Rs 60 crore by passive trackers. LTTS shares have gained 9 per cent this year, even as the Nifty IT index has fallen 4 per cent.