Share Market Today - 2nd August 2019

NIFTY Daily Chart

Share Market Today 2nd August 2019 NIFTY Daily Chart

It was a dreadful session yesterday for the domestic market post the hopeful closing of Wednesday. The markets started the session with a downside gap and kept on sinking as the day progressed to close with massive loss. The index Nifty spot lost around 240 points from previous close to sneak below 10900 mark during the session. However, a V-Shape recovery in the final hour helped the index to cut half of its loss and close near 11000 mark.
It was horrific day for NIFTY BANK index too since it collapsed more than 800 points during the process. As usual the market breadth again turned in the favour of declining counters. On the sectoral front, the NIFTY MEDIA (-3.12%) and NIFTY METAL (-3.13%) stocks were the worst performers while the NIFTY AUTO (+0.06%) stocks underwent some recovery. From the F&O space, UJJIVAN (+6.25%), STAR (+4.86%) and VOLTAS (+4.11%) remained top gainers.

Yesterday, for a moment we expected the markets to continue with its relief rally post opening with a downside gap. But, unfortunately Nifty breached support of 11000 and in line with our broader view we witnessed severe selling after that. The low registered at 10881 while the close was 100 points above that at 10980. The zone from which Nifty turned yesterday was a consolidation zone during the months of Dec 2018 to Mar 2019 from where the index started its fresh rally of all time high. This being a demand zone there is a possibility of some relief for the bulls if 10880 level is intact.
However, since the broader view is bearish we don’t want to get carried away with a buy trade as of now. Post the opening, we would reassess the conditions and then go for any recommendation. As of now we maintain our stance that aggressive bets can be made only above 11150 mark. With regards to NIFTY BANK index , it breached 28500 support and met the 28000 level. Now, 28000 – 28700 could be the trading range for the index. Coming to the option chain, yesterday huge positions were built in 11000 strike CE (a rise of 32 lac shares) which indicates a short covering in CE once Nifty clears 11000 mark. On the downside, PE concentration is at 10900.


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Share Market Today - 1st August 2019

NIFTY Daily ChartInitially, Nifty turned down and tested the support of 11000 and then recovered sharply to cross 11100 mark. However, our mentioned level of 11150 acted as a strong resistance yesterday (this was again the 200 Day SMA). Going ahead a move above 11150 only would result in some more relief in the market. However, on the downside 11000 would continue to act as support. As per the option chain, highest built up is seen in 11200 CE to the tune of around 2.5 million shares. So this could be a strong hurdle whereas on the downside 11000 is a base with 2.4 million shares in 11000 strike PE. Since the SGX NIFTY indicates a negative opening, traders can look for buying opportunity near 11000 levels only. Aggressive bets can be made only above 11150 mark. With regards to NIFTY BANK index , the index turned from the 28500 mark but on the upside failed to clear 29000 levels. Thus, it is stuck between 28500 – 29000 range. A move on the either side will dictate the further trend. Although we expect a bounce in the market but we maintain our cautious stance.BEL : BULLISH Post recent correction, the stock took a U – turn from the extension of its previous breakout The support coincides with the placement of 200 day SMA which indicates fresh upside. Even the daily RSI has turned from the support of 30. Traders can buy the stock between 102 – 98with a stop of 92 for the upside target of 116. Disclaimer)

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Spandana Sphoorty Financial Ltd. IPO 2019 – Issue Details, Balance Sheet & Company Highlights

ISSUE HIGHLIGHTS Issue Size of 1,40,29,622 shares which consists of offer for sale of 93,56,725 shares by investors and the Promoters amounting to Rs. 800 crores and a fresh issue of approximately 46,72,897 shares of around Rs. 400 crores. In aggregate upto 1,201 crs will be raised. Proceeds from fresh issue will be utilised towards Augmenting capital base General corporate purposes SHAREHOLDING PATTERN COMPANY HIGHLIGHTS   Spandana is a leading, rural focused NBFC-MFI, having dominant business presence in AP and Telangana. Spandana was incorporated as a public company in 2003 and registered as an NBFC with the RBI in 2004. Subsequently, company got registered as NBFC-MFI in 2015. Through customer centric loan products, Spandana endeavoured to strengthen the socio-economic well-being of low-income households. Product portfolio of Spandana comprises of following offerings: Abhilasha (JLG Loans)- Abhilasha stands for “Aspiration”. This unique loan is designed especially for low-income households. Loans Against Property (LAP)- Sometimes big ideas need small help, thus Spandana has designed Loan Against Property scheme for low income home buyers. Phinix Loans- Women empowerment being centric. Spandana designed special financing facility for women of Andhra Pradesh who already have an income generating source. Shree Loans- Shree stands for “Good Beginning”, this loan is given to low/lower-middle-income people having clear credit history. Gold Loans (Keertana)- They also provide ‘Gold Loans’ are given against the mortgage of Jewellery. Interim Loans- Spandana has working capital offering under the name of ‘Interim loans’ to assist borrowers to meet their liquidity requirements.   VALUATION Spandana is a well diversified rural focussed NBFC. It enjoys decent return ratios. Post issue at upper band of issue price of Rs.856 it’s P/BV stands at 2.40x (ttm basis). Loan book has grown at a Cagr of 27% for past 5 years. For FY19 its advances grew at 38% yoy basis. Assuming, the company delivers similar growth in foreseeable future, the issue is fairly priced.)

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