EQUITY OUTLOOK

Benchmark indices are likely to gain for the fourth session in a row today and hit new milestones, driven by the strong momentum in bank stocks, as relief measures for telecom companies and approval by the Union Cabinet to set up a bad bank are likely to trigger follow-up buying. Investors' concern over mounting non-performing assets in banks were eased due to relief announced for telecom companies and setting up of a bad bank, which are expected to provide some comfort to the banks. Owing to the strong buying interest in bank stocks, the Nifty Bank index witnessed a fresh breakout on the technical chart on Thursday. With the Nifty Bank index touching its all-time high, the next immediate target for the index would be 38100 points. Besides foreign institutional investors, strong buying from retail investors and high net-worth individuals are fuelling the uptrend, and it is expected to continue. FIIs net bought 16.2 bln rupees worth of shares in the cash market on Thursday. In the last five sessions, they have net bought shares worth 53 bln rupees. On sustained momentum, analysts expect Nifty 50 index to touch 17750 points in the near term, and suggest that one can remain long with trailing stop loss at 17300 points. Shares of Biocon may gain as its arm Biocon Biologics will offer 15% stake in it to Serum Institute Life Sciences at a valuation of $4.9 bln. In return, the company will get committed access to 100 mln doses of vaccines per annum for 15 years and commercialisation rights of the Serum Institute Life Sciences' vaccine portfolio for global markets. Shares of Hero MotoCorp may also gain as the company will increase prices of its motorcycles and scooters by 3,000 rupees, depending on the model and the market, from Monday. Kotak Mahindra Bank may also gain as the Kotak Mahindra Group has acquired the loan vehicle portfolio of Volkswagen Finance, with a total book of around 13.4 bln rupees. In the long-term, with the structural uptrend intact, Nifty 50 is expected to touch 18600 points by December.

For Week ended 17th September, 2021