MarketBuzz
1213: Marketbuzz Podcast With Hormaz Fatakia: Smallcaps in focus with ITC, Federal Bank, Coal India
Good morning and welcome to CNVCTV18's Market Buzz podcast with me, Harmas Patakya. Now, there have been many such days in the last 12 months where we have waited with baited breath for the markets to open so that they can go from one high to another. I am sure yesterday was definitely not one such day as most of us waited for it to end. I don't think we need to revisit what happened yesterday after a 14 lakh crore wipe out. So, let's tell you what's in store today. It's the weekly options expiry of the NFT50 contracts today. The index is now at very crucial levels having closed just below the 22,000 mark. And since it's expiry, you can brace for more volatility. F&O data suggests heavy call writing from 22,000 to 22,400 strikes on the NFT for today's expiry session. But what lies ahead for the market after such a big fall? Nilesha of Kotak Mahindra AMC told CNVCTV18 that he sees scope for further correction in the market, particularly in micro caps and in stocks with less public floats. He also said that this is actually the real test for those retail investors who purchased bad quality stocks. Therefore, keep an eye out on all of these PSU stocks that have less public float. In fact, PSU's lost six lakh crore in market cap on Wednesday, which was nearly half of the overall 14 lakh crore erosion. Prasam Kimka of Y2 Capital also said that there was some overconfidence building in the market, particularly in the small cap space. And therefore, this was a much awaited correction, which according to him is also a healthy one. And he would not be too worried about it. Now, if this may give any solace to the market or it's something that is already priced in, but a pan-India opinion poll by News 18 shows 80% of the people polled are satisfied with the central government ahead of the Lok Sabha elections. Now, another word of solace coming in from Jeffries, who's called this recent correction in the mid and small cap space a correction and not a meltdown. Now, it believes that a strengthening capex cycle makes small and mid-caps an attractive option for the long term and its preferred place when select real estate stocks, industrials and select PSUs. The ITC was supposed to be the focal point of yesterday's session, but then it got overshadowed in that broader market mayhem. Now, plenty of buyers have emerged in yesterday's block deal, where BIT sold three and a half percent stake, GIC, Aberdeen, ICIC, a Prudential, DSP and other sovereign and wealth funds are also buyers in that transaction. We'll see if there is any follow-up buying in ITC in today's trading session. Now, two brokerages had mentioned yesterday that the correction in ITC is a good opportunity to buy. Another stock has joined that list and that is Cole India, where Jeffries believes that this recent 13 percent correction that the stock has seen is a good buying opportunity. It has a price target of 520 rupees on Cole India, which implies a potential upside of nearly 25 percent. The IFL finance has been in the line of fire recently and yesterday, it approved raising 2,000 crore rupees, of which it will raise 1,500 crore through a rights issue and the rest through non-convertible debentures or NCDs. Both federal bank and South Indian bank will also be in focus today, as both of them will not onboard any new customers for their respective co-branded credit cards till they comply with their respective directives issued by the Reserve Bank of India. There are plenty of other stocks that will be in action today as well, like AC International of the Order Wing, Tata Motors on the Tamil Nadu investment, signed for its Airbus deal, as well as Sanofi. So, you can read about all of them on CNBCTV18.com. Today is also the day when India will report its wholesale price inflation at noon, so we will keep an eye out on that as well. The handover from Wall Street has been subdued. The US markets ended mixed last night and Asian markets have also opened in a narrow range. Whereas we speak, the gift Nifty is indicating a gap downstart for the Indian markets as it is trading lower by around 90 points. So, we will brace for some more volatility, as I said, in today's session. That's all from today. It's a new day, so we walk into the trading session with renowned hope for the sharpest market insights and analysis. Stay tuned to CNVCTV18 and CNVCTV18.com.