Nifty & Bank Nifty index will remain volatile ahead of F&O expiry and quarterly results

 

Indian stock market ended marginally lower last Friday but made a decent gain on a weekly basis. Last week, the Nifty index gained 292.45 points or 2.68%  and at 11194.15 while Sensex was up by 1108.7 points or 3% and at 38128.9. The Bank Nifty index also gained 695.25 points or 3.16% and at 22662.05.

The Nifty midcap and smallcap 100 indices also closed in the green on a weekly basis. The Nifty midcap was up by 286.25 points or 1.88%  and at 15528.55 and Smallcap also gained 137.45 points or 2.81% and at 4989.4

 

Nifty Index Gainers and Losers last week

 

Weekly Nifty50 Gainers
Company Name	LTP	Previous Close	Change (%)
Reliance Industries	2146.15	1911.70	12.26
Power Grid Corp	182.00	163.30	11.45
Eicher Motors	20800.35	18810.80	10.58
HCL Technologies	679.95	623.15	9.11
Tech Mahindra	652.60	599.70	8.82
Weekly Nifty50 Losers
Company Name	LTP	Previous Close	Change (%)
Hindustan Unilever	2209.90	2334.55	5.37
Shree Cement	21332.75	22269.95	4.21
Hindalco Industries	156.20	162.15	3.67
Zee Entertainment	151.70	157.40	3.62
Sun Pharma	485.60	503.60	3.57

 

Nifty midcap and smallcap gainers and losers

 

Weekly Nifty Midcap 100 Gainers
Company Name	LTP	Previous Close	Change (%)
Edelweiss Finance	81.35	64.40	26.32
AU Small Finance	791.30	653.95	21.00
Weekly Nifty Midcap 100 Losers
Company Name	LTP	Previous Close	Change (%)
Future Retail	95.45	110.55	13.66
Trent	577.45	622.45	7.23
Weekly Nifty Smallcap 100 Gainers
Company Name	LTP	Previous Close	Change (%)
Indiamart Inter	2455.35	2050.60	19.74
Dixon Technology	7686.35	6469.25	18.82
Weekly Nifty Smallcap 100 Losers
Company Name	LTP	Previous Close	Change (%)
Sterlite Tech	136.10	155.70	12.59
Indiabulls Real	52.95	60.40	12.33

News that influenced the market last week

 

Last week market took some support after Finance Minister Nirmala Sitharaman assured the industry that the government is open to taking more actions in the future to boost economic recovery. 

Besides, the market sentiment got boosted with Chief Economic Adviser (CEA) K V Subramanian statement. He said that the government may announce more fiscal measures to boost the demand after the uncertainty of coronavirus disease gets eliminates. 

On the global front, the traders took a cautious approach after the tension between the US and China escalates. Last week the US asked Beijing to close its diplomatic consulate in Houston by Friday. 

China in retaliation has also asked the US to close its consulate in Chengdu. Traders are also concern about the increasing coronavirus cases in the US and worldwide.

 

Quarterly Results of Nifty50 Companies last week.

 

There ware many blue-chip companies that have announced their Q1FY21 earnings last week. We have done an analysis of how they have behaved after quarterly results announced.

 

Axis Bank-

On 21st July the Bank reported a 19% YoY fall in the net profit at Rs 1112 crore for June end quarter. This is as compared to Rs 1370.08 crore net profit in the last year the same period. The Net Interest Income (NII) grew 20% YoY to Rs 6985 crores in Q1FY21. The operating profit inched lower by 1% to Rs 5844 crores.

The NPA’s ratio was at 4.72% in June end the quarter down 53 bps on YoY and down 14 bps sequentially. The share price of Axis Bank reacted positively on the next day after the announcement of Q1FY21.

Bajaj Finance

The Bajaj Finance reported its Q1FY21 results on 21st July. The company reported a 19.4% YoY fall in consolidated net profit at Rs 962.32 crore for Q1FY21. Last year for the same period the company posted Rs 1195 crores net profit. 

The gross NPA stood at 1.40% as against 1.60% and net NPA at 0.50% as against 0.64% for the same period last year. The share price of Bajaj Finance reacted negatively after the quarterly results but immediately recovered.

Bajaj Finserv

Bajaj Finserv reported 44% YoY jump in Q1FY21, its consolidated net profit stood at Rs 1215 crores. On a QoQ basis, profit jumped over six times. Consolidated total income for June end quarter under review stood at Rs 14,192 crore, up 16% YoY. On a QoQ income was down 7%.

The share price of Bajaj Finserv jumped 4% after the quarterly results.

HUL

On 21st July Hindustan Unilever Ltd (HUL) reported a 7% YoY increase in standalone net profit at Rs 1881 crore for Q1FY21. This is as compared to net profit os Rs 1775 crores in the last year the same period.

The company’s revenue increased 4% on a YoY basis to Rs 10,406 crores is under review. EBITDA fell 01% YoY to Rs 2644 crore and margin declined 120 bps to 25% in the June end quarter. The share price of HUL reacted negatively after the quarterly result announced.

Bajaj Auto

On 22nd July Bajaj Auto reported a 53.1% drop in net profit on a YoY basis at Rs 528 crore for the Q1FY21. This is as compared to Rs 1125.67 crores last year in the same quarter. Net sales of June end quarter dropped 61% to Rs 2948.62 crores from Rs 7565 crores in the last year the same period.

The share price reacted negatively after the quarterly result and later recovered during the week.

Larsen & Toubro

The company reported a steep 68% decline in net profit on an annual basis. The company posted a consolidated net profit of Rs 536.88crore during the quarter review. This is as compared to Rs 1697.62 crore in the last year the same quarter.

The consolidated revenue from operation in June end quarter stood at Rs 21259.97 crore. This is compared to 29,635.95 crores in the same quarter last year. The share price Larsen & Turbo reacted negatively after the Q1FY21 quarterly results.

Asian Paints

Asian paints on 24th July reported its Q1FY21 quarterly results. The company posted a 67.32% decline in consolidated net profit to Rs 219.61 crore for the Q1FY21. This is as compared to the net profit of Rs 672.09 crores in the last year for the same period.

Its revenue from the operation was down 42.74% at Rs 2922.66 crores during the June end quarter under review. This is as compared to Rs 5104.72 crores in the same period last year. The share price reacted positively after the announcement of the quarterly result.

ITC

On 24th July ITC reported 26.18% drop its standalone profit on YoY basis to Rs 2342.76 crore. This is as compared to Rs 3173.94 crore in the same quarter last year.

The revenue from operations dipped 17.39% to Rs 9501.75 crore for the quarter compared to Rs 11502.82 crores in the last year the same period.

EBITDA or operating profit for the company stood at Rs 2646.6 crore. The margin was 27.8%. The share price of ITC may react negatively on Monday 

JSW Steel

On Friday the company reported a net loss of Rs 561 crore for the Q1FY21. This is as compared to a net profit of Rs 1028 crores in the last year same period. The Consolidated total income of the company declined 40.29% on YoY basis to Rs 11914 crores during the quarter under review.

The company announced the quarterly results after the market hours on Friday. The share price may react negatively on Monday.

 

Factors that may influence the market next week

 

Quarterly results for next week

There are many heavyweights that will announce June end quarterly results in the next week like Reliance, Maruti, HDFC, etc. The list is given below

Q1 Results dates for Nifty50 Stocks
25th July	ICICI Bank
27th July	INFRATEL
27th July	Kotak Bank
27th July	Tech Mahindra
29th July	Bharti Airtel
29th July	Dr. Reddy
29th July	Maruti Suzuki
30th July	HDFC
30th July	Reliance
31st July	IOC

 

Coronavirus News

Last week we have seen traders were cautious about the rising coronavirus cases in the US, India, and some other parts of the world. In India, the total numbers of cases are more than 13L and currently standing as the third position in global tally. At least half of the Indian population is in various types of lockdown full, half, or partial. 

There are at least 70 companies working in developing the corona vaccines that are expected to introduce before the year-end. Any news on the extension of lockdown or delay in introducing the vaccine can slow down the economic recovery.

 

Global Market Cues

At present, the global markets are concern about increasing coronavirus cases in the US and other parts of the world, the US and China tension, and quarterly earnings. The fresh tension of the US-China can further dent the positive market sentiments globally.

On the other side, hopes of vaccines are coming from various countries like the US, India, UK, etc can make a positive market sentiment. The better than expected macro data, quarterly earnings, and stimulus measures can also add positivity to the markets.

 

Technical levels of Nifty and Bank Nifty Index ahead of F&O Expiry

The Nifty index in futures for next week

Primary Trend of Nifty index futures next week: Mild Positive

Range-Bound Trend of Nifty index futures: All up Moves Initiates Profit Booking (Sale) @ 11350 whereas All Down Moves Initiates Short Covering (Buy) @ 11000

If Nifty index in futures Moves Above 11208 and sustain. Then you should Buy with 1st Target of 11228 during the day or week with a Stop Loss of 11130 FOR the Target of 11228- 11252 – 11280- 11348

If Nifty index in futures Moves Below 11130 and sustain. Then you should Sell with 1st Target of 11110 during the day or week with a Stop Loss of 10950. FOR the Target of 11110-  11085- 11056-11006

Bank Nifty index in futures for next week

Primary Trend of Nifty Bank index in future for next week: Mild Positive

Range-Bound Trend of Nifty Bank index in future: All up Moves Initiates Profit Booking (Sale) @ 23400, whereas All Down Moves Initiates Short  Covering (Buy) @ 22030

Nifty Bank index in future Moves Above 22760 and sustain. Then you should Buy with the 1st Target of 22918 during the day with a Stop Loss of  22450. FOR the Target of 22918 – 23055- 23190- 23430

If Nifty Bank index in future Moves Below 22450 and sustained. Then you should Sell with the 1st Target of 22325 during the day with a Stop Loss of 22760. FOR the Target of 22325 – 22170- 22030-21750

 

FIIs and DIIs Movement

On a weekly basis, FIIs were buyers and DIIs were the seller in the cash segment. FIIs bought Rs 7791.8 crores whereas the DIIs sold Rs 5323.1 crores in the cash market on  24th July end week.

On a monthly basis also FIIs were buyers in July in the cash market, FIIs bought Rs 3801.51 crores while DIIs sold Rs 7562.47 crores.

 

Conclusions

Indian stock market gained on a weekly basis. Next week the market will remain volatile ahead of F&O expiry. There are many market heavyweights that will announce their quarterly results next week. Though technically the market is looking positive traders need to be cautious. 

On the global front, the Fed meeting is scheduled for next week. The tension between the US and China can also escalate further after’s China’s retaliation. 

Traders can follow our Share Market Live reports during the market hours and Nifty and Bank Nifty index futures live calls on a daily basis.

 

You can also read, Coronavirus impact on various sectors & Indian economic growth

                              Hedging: Meaning, Risk, Strategies, and types of Hedge                     

You may also like to view technical charts and trading strategies

 

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Editor’s Desk

 

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