Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

For some time one of the favourite trends here has been the bullish one on the Nifty Index. There were numerous targets in mind including 17,400 on the Nifty Index itself and 240 on the Nifty in USD termsThis week we met the 17,400 target. At the same time the bulk of the move down on USDINR looks to be behind us. Looking at the relevant charts below it is prudent at this stage to expect a consolidation or correction down and possibly opportunities to re-engage in the Nifty Index at better levels later.Charts: Nifty Index | USDINR | Nifty in USDs | Nifty Index versus S&amp;P 500 Ratio

For some time one of the favourite trends here has been the bullish one on the Nifty Index. There were numerous targets in mind including 17,400 on the Nifty Index itself and 240 on the Nifty in USD termsThis week we met the 17,400 target. At the same time the bulk of the move down on USDINR looks to be behind us. Looking at the relevant charts below it is prudent at this stage to expect a consolidation or correction down and possibly opportunities to re-engage in the Nifty Index at better levels later.Charts: Nifty Index | USDINR | Nifty in USDs | Nifty Index versus S&amp;P 500 Ratio

India’s Nifty Target Met - Time for a Consolidation

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

On 25 August, the Board of <a href="https://www.smartkarma.com/entities/bharti-airtel-ltd" target="_blank" data-smartkarma-citation="entities:953:1" rel="noopener">Bharti Airtel (BHARTI IN)</a> announced that they would be meeting on 29 August to consider various capital raising options through equity or equity linked or debt instruments or a combination thereof. The stock dropped 4.2% on 26 August and then gained 1.4% on 27 August.Last evening, <a href="https://www.smartkarma.com/entities/bharti-airtel-ltd" target="_blank" data-smartkarma-citation="entities:953:1" rel="noopener">Bharti Airtel (BHARTI IN)</a> announced a 1:14 rights issue (shareholders can subscribe to 1 share for every 14 shares they own) at INR 535/share to raise up to INR 21,000 crores (INR 210 bn; US$2.86bn). That is a 10.1% discount to the last close on the NSE.Subscribers to the issue will need to pay 25% on application and the balance will need to be paid in two additional calls within an overall time horizon of 36 months.The promoter and promoter group will subscribe to the full extent of their entitlement and will also subscribe to any unsubscribed shares in the issue.The record date has not been announced yet and a 'Special Committee of Directors' has been formed to decide other terms and conditions of the offer, including the issue period and record date.Given the small dilution, we do not expect the stock to trade a lot lower today. The stock could trade higher as investors that sold in size on Thursday and Friday re-enter the stock.<a href="https://www.smartkarma.com/entities/bharti-airtel-ltd" target="_blank" data-smartkarma-citation="entities:953:1" rel="noopener">Bharti Airtel (BHARTI IN)</a> has continued to gain subscribers at the expense of <a href="https://www.smartkarma.com/entities/vodafone-idea-ltd" target="_blank" data-smartkarma-citation="entities:15678:1" rel="noopener">Vodafone Idea (IDEA IN)</a> and the rights issue could help cement its position while helping pay the Adjusted Gross Revenue (AGR) dues.

On 25 August, the Board of Bharti Airtel (BHARTI IN) announced that they would be meeting on 29 August to consider various capital raising options through equity or equity linked or debt instruments or a combination thereof. The stock dropped 4.2% on 26 August and then gained 1.4% on 27 August.Last evening, Bharti Airtel (BHARTI IN) announced a 1:14 rights issue (shareholders can subscribe to 1 share for every 14 shares they own) at INR 535/share to raise up to INR 21,000 crores (INR 210 bn; US$2.86bn). That is a 10.1% discount to the last close on the NSE.Subscribers to the issue will need to pay 25% on application and the balance will need to be paid in two additional calls within an overall time horizon of 36 months.The promoter and promoter group will subscribe to the full extent of their entitlement and will also subscribe to any unsubscribed shares in the issue.The record date has not been announced yet and a 'Special Committee of Directors' has been formed to decide other terms and conditions of the offer, including the issue period and record date.Given the small dilution, we do not expect the stock to trade a lot lower today. The stock could trade higher as investors that sold in size on Thursday and Friday re-enter the stock.Bharti Airtel (BHARTI IN) has continued to gain subscribers at the expense of Vodafone Idea (IDEA IN) and the rights issue could help cement its position while helping pay the Adjusted Gross Revenue (AGR) dues.

Bharti Airtel's Large Partly Paid Rights Offering

In Asia the market that still looks attractive is India’s Nifty as it trades near the trend highs. Previous examples of a rally and breakouts on the Nifty Index saw the market move more than 10% from the base. Since we started from a recent low of 15,513, we could expect at least 17,064 if not the 17,400 area before seeing a consolidation or a meaningful pullback.Such a move coupled with USDINR looking like it could make it to the base of the range - approximately 72.50 - would put the Nifty in USD terms at 240 which is still 7% above current levels.Indeed, it might even be in India’s interest to see a slightly stronger currency given the trade deficit and the rising Oil price.

In Asia the market that still looks attractive is India’s Nifty as it trades near the trend highs. Previous examples of a rally and breakouts on the Nifty Index saw the market move more than 10% from the base. Since we started from a recent low of 15,513, we could expect at least 17,064 if not the 17,400 area before seeing a consolidation or a meaningful pullback.Such a move coupled with USDINR looking like it could make it to the base of the range - approximately 72.50 - would put the Nifty in USD terms at 240 which is still 7% above current levels.Indeed, it might even be in India’s interest to see a slightly stronger currency given the trade deficit and the rising Oil price.

Post market close on 23 August, the Index Maintenance Sub-Committee (IMSC) of NSE Indices announced the results of the September index review for the NIFTY family of indices. The rebalance will be effective after the close of trading on 29 September and passive funds will need to trade at the close (VWAP over the last 30 minutes of trading) on the day.There are no changes to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a>, in line with what we expected.There are 5 changes to the NIFTY Next 50 Index. <a href="https://www.smartkarma.com/entities/bank-of-baroda" target="_blank" data-smartkarma-citation="entities:545:1" rel="noopener">Bank Of Baroda (BOB IN)</a>, <a href="https://www.smartkarma.com/entities/cholamandalam-investment-and-finance" target="_blank" data-smartkarma-citation="entities:17583:1" rel="noopener">Cholamandalam Investment and Finance (CIFC IN)</a>, <a href="https://www.smartkarma.com/entities/jindal-steel-power-ltd" target="_blank" data-smartkarma-citation="entities:6614:1" rel="noopener">Jindal Steel &amp; Power (JSP IN)</a>, <a href="https://www.smartkarma.com/entities/pi-industries-ltd" target="_blank" data-smartkarma-citation="entities:6040:1" rel="noopener">Pi Industries (PI IN)</a> and <a href="https://www.smartkarma.com/entities/steel-authority-of-india" target="_blank" data-smartkarma-citation="entities:14323:1" rel="noopener">Steel Authority of India (SAIL IN)</a> will be included in the index, while <a href="https://www.smartkarma.com/entities/abbott-india-ltd" target="_blank" data-smartkarma-citation="entities:9687:1" rel="noopener">Abbott India (BOOT IN)</a>, <a href="https://www.smartkarma.com/entities/alkem-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:26928:1" rel="noopener">Alkem Laboratories Ltd (ALKEM IN)</a>, <a href="https://www.smartkarma.com/entities/mrf-ltd" target="_blank" data-smartkarma-citation="entities:2930:1" rel="noopener">Mrf Ltd (MRF IN)</a>, <a href="https://www.smartkarma.com/entities/petronet-lng-ltd" target="_blank" data-smartkarma-citation="entities:15235:1" rel="noopener">Petronet LNG (PLNG IN)</a> and <a href="https://www.smartkarma.com/entities/united-breweries-ltd" target="_blank" data-smartkarma-citation="entities:18080:1" rel="noopener">United Breweries (UBBL IN)</a> will be deleted from the index.While the headline impact in terms of ADV looks low, a look at the impact compared to the delivery volumes paints a different picture.There are a whole bunch of changes to constituents of other indices too. However, the assets tracking these indices are small and there will be negligible impact on the stocks.There is an expansion of the index universe for the NIFTY indices with REITs and Infrastructure Investment Trusts (InvITs) becoming eligible for inclusion in the indices.

Post market close on 23 August, the Index Maintenance Sub-Committee (IMSC) of NSE Indices announced the results of the September index review for the NIFTY family of indices. The rebalance will be effective after the close of trading on 29 September and passive funds will need to trade at the close (VWAP over the last 30 minutes of trading) on the day.There are no changes to the NIFTY Index (NIFTY INDEX), in line with what we expected.There are 5 changes to the NIFTY Next 50 Index. Bank Of Baroda (BOB IN), Cholamandalam Investment and Finance (CIFC IN), Jindal Steel &amp; Power (JSP IN), Pi Industries (PI IN) and Steel Authority of India (SAIL IN) will be included in the index, while Abbott India (BOOT IN), Alkem Laboratories Ltd (ALKEM IN), Mrf Ltd (MRF IN), Petronet LNG (PLNG IN) and United Breweries (UBBL IN) will be deleted from the index.While the headline impact in terms of ADV looks low, a look at the impact compared to the delivery volumes paints a different picture.There are a whole bunch of changes to constituents of other indices too. However, the assets tracking these indices are small and there will be negligible impact on the stocks.There is an expansion of the index universe for the NIFTY indices with REITs and Infrastructure Investment Trusts (InvITs) becoming eligible for inclusion in the indices.

NIFTY NEXT50 Index Rebalance: More Beneath The Surface

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Nifty has been a good long play since early 2021 but is now starting to show bull energy deterioration as we push toward our ideal rally objective. Near pivot support lies at 16,200. Rally stall call near 16,630/700 for a dip and rally sequence into a top.Weekly indicators are not confirming new highs for a case of higher degree divergence building.Nifty RSI is top building. Buy volumes are deteriorating on this rise.Banks continue to underperform and a red flag into a Nifty rise.

Nifty has been a good long play since early 2021 but is now starting to show bull energy deterioration as we push toward our ideal rally objective. Near pivot support lies at 16,200. Rally stall call near 16,630/700 for a dip and rally sequence into a top.Weekly indicators are not confirming new highs for a case of higher degree divergence building.Nifty RSI is top building. Buy volumes are deteriorating on this rise.Banks continue to underperform and a red flag into a Nifty rise.

India

The NIFTY 50 index is National Stock Exchange of India's benchmark stock market index for Indian equity market. Nifty is owned and managed by India Index Services and Products (IISL), which is a wholly owned subsidiary of the NSE Strategic Investment Corporation Limited.

NIFTY Index (NIFTY INDEX)

India’s Nifty Target Met - Time for a Consolidation

India's Nifty Index has met the topside target in Rupee terms and almost in USD terms. Recent price action suggests it is prudent to step back and...

Shyam Devani

Bharti Airtel's Large Partly Paid Rights Offering

Bharti Airtel has announced a US$2.8bn rights offer. This is a partly paid offering with 25% paid upfront and 2 calls within 36 months. Expect the...

Brian Freitas

India Markets Refreshed

India's Nifty is still in an uptrend and looks even more attractive in USD terms as USDINR threatens to take out supports.

Shyam Devani

NIFTY NEXT50 Index Rebalance: More Beneath The Surface

There are 5 changes to the NIFTY Next 50 Index that will be implemented at the close on 29 September. The impact is quite large compared to the...

Brian Freitas

Level to Sell India

Nifty has been a good long play now showing bull energy deterioration into our ideal rally objective. Rally stall call near 16,630/700 for a dip...

Thomas Schroeder