Street signs: Nifty's outlook overcast, MFs' electrifying gain on GE T&D

Cloudy with a chance of correction? Nifty’s outlook overcast

The benchmark National Stock Exchange Nifty 50 has logged back-to-back weekly losses for only the third time this calendar year. On previous occasions, the index rebounded after two consecutive weeks of decline. Will it follow the same pattern this time? Analysts suggest that the current index level and sustained selling by overseas funds are clouding the outlook. “Technically, the market outlook remains largely unchanged, presenting a challenging environment with no clear trend,” said Sameet Chavan, head of research, technical, and derivatives at Angel One. “The 24,800 mark serves as significant support; a decisive breakdown here could lead to further correction. Conversely, the 25,250-25,300 range remains a formidable resistance zone. Moving forward, volatility is likely to increase, with opportunities emerging in the broader market as the quarterly earnings season begins,” he added. The Nifty closed at 24,964 on Friday, while foreign funds have sold shares worth over $6 billion so far this month.

The paint peels off: A canvas of challenges for Asian Paints

Shares of industry leader Asian Paints have dropped over 10 per cent this year, even as the benchmark National Stock Exchange Nifty 50 has risen 15 per cent. This stark underperformance comes amid slowing sales and market share loss, with new entrants like JSW Paints and Birla Opus gaining traction. A recent note by Elara Capital stated that the outlook for Asian Paints remains “negative” due to rising competitive pressures. During the July-September 2024-25 quarter, the paint industry could post low single-digit growth, while Asian Paints’ revenues may remain flat, according to the report. Among the listed competitors, the brokerage prefers Berger Paints, which is positioned for relatively faster growth and faces lower margin pressure.

Charged gains: MFs ride the current with GE T&D

Mutual fund (MF) houses that participated in the offer for sale (OFS) of GE T&D India (formerly Alstom T&D India) are enjoying gains of over 20 per cent within just a month. Participants include Aditya Birla Sun Life MF (invested Rs 714 crore), Axis MF (Rs 434 crore), Kotak MF, and Motilal Oswal MF. GE T&D’s promoters offloaded an 11.7 per cent stake via the OFS in September at Rs 1,445 per share. The stock now trades at Rs 1,770. In August, Nuvama upgraded the stock from ‘reduce’ to ‘buy’, raising its price target from Rs 800 to Rs 2,000.