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00:00 Good morning, I'm Neeraj Shah and thanks so much for tuning into the Trade Setup.
00:04 Let's take stock of what the global news flow is because there's a lot that's happened
00:08 post Friday market hours.
00:09 First, India has forged a global biofuel alliance in a push towards net zero aim.
00:15 The US, EU have agreed on the Mideast India rail and shipping corridor at G20 and a diagram
00:23 or a photograph of what that could be has been doing the rounds.
00:27 It's a big, large global initiative and an important one at that.
00:32 The market will want to discount a lot of benefits today, but that notwithstanding,
00:36 it's an important one.
00:37 Italy's Maloney has met with China's Li as Italy's continued participation in the Belt
00:42 and Road is in doubt as per global media.
00:45 Nvidia is going to partner with Reliance and Tata for a big AI play in India.
00:49 By the way, amongst other things also what's happened is that oil is dipped after technical
00:56 signal that the rallies may have run too hot.
00:59 So that's the other thing.
01:00 A moving part from an India perspective, which is important.
01:03 Now, remember, we had a good week, but the US markets also ended Friday.
01:08 Dow, S&P, Nasdaq, mildly positively.
01:11 Nasdaq was the best, of course, 0.89 percent, but the Dow and S&P too, marginally in the
01:16 green.
01:17 Unfortunately, the other indicators, and if you look at the 10-year yield, you look at
01:23 volatility, etc., they all kind of stay elevated.
01:26 They haven't come off.
01:27 So bear that in mind, which is why, I mean, for now, the Gift Nifty may suggest a flat
01:32 start, but it's not quite the same lead indicator, by the way.
01:37 You've got to keep in mind, we missed the start of flat, but I think we've been anything
01:41 but flat in the last week.
01:43 So it was a trending week with every sectoral market index ending in the green, led by PSUs.
01:50 Quite a stark move in trade yesterday relative to all the indecision that we've had in the
01:57 previous few weeks.
01:58 So there is a strong move that has happened.
02:01 We might be marginally in the green territory, but I doubt that we are really in extreme
02:07 green currently as well.
02:09 Looking at the indicators, the rolls have the weekly expiry numbers as well.
02:15 It didn't suggest too much of an alarm bell on any front whatsoever.
02:19 The stock levels as per the technical experts are much lower for most experts, except in
02:23 some of the small and mid cap indices.
02:25 But they are doing what they are doing.
02:28 The capital market related stocks may well come in flavor due to the recent optimism.
02:37 So do watch out for that as well.
02:39 Remember, we've hit the 10 crore account.
02:41 That is an optimistic outtake there.
02:44 I was looking at some newsletters from a few people.
02:47 Two of those newsletters had Angel One as a stock to monitor.
02:51 So who knows, the capital market stocks might be in focus today or this week.
02:56 And subscription to the recent engineering and manufacturing IPOs shows the flavor for
03:01 that sector.
03:02 You see what happened to Rishabh Instruments and one more on Friday when they shut the
03:07 - when it was closed for subscription.
03:10 But the kind of subscription that came into some of those stocks was just stunning.
03:14 And it just tells you, you know, the kind of participation that is happening.
03:18 You know, yet this week, viewers, we can move on to this plate.
03:22 The good part for last week was that there was leadership that came in from other pockets.
03:27 So Bank Nifty, which started to move when it was not just HDFC Bank, which was a lone
03:32 ranger on Thursday, but others, Coal India, Larsen and DuPro have all moved, which is
03:37 actually a great sign.
03:39 And I was looking at what is the kind of relative valuations that, you know, that sectors have
03:45 to the MSCI India piece.
03:47 So financials are actually a negative one standard deviation even now with the index
03:51 at 19,900 odd.
03:53 IT is largely in line.
03:56 Consumer staples and autos are just about 0.5 standard deviation.
04:00 We know that Reliance has hardly made a move.
04:04 The clutch of sectors out there, which if the market wants to participate, can take
04:09 the indices higher without it looking like there are alarm bells.
04:13 So bear that in mind.
04:14 There is a query that is coming about whether we can expect Nifty 20,200 or 20,000 as the
04:21 case may be.
04:22 Well, sort of looking at the technicals, it does seem that there is momentum in our favour.
04:30 And with the kind of positive outcome that has come out of G20, you never know.
04:36 Chris Wood in a Bloomberg interview last week mentioned about how India remains the market
04:41 that he would want to be when it comes to Asia.
04:44 There are others too, but India remains his favourite.
04:46 We'll be talking to him, I think, next Monday.
04:50 So that is important as to what's coming in from some of the global strategists as well
04:55 as the fund managers.
04:56 So remember, we've done this despite the flows not being great.
05:02 I mean, we know that the yields are pinched higher.
05:04 We know that the currency is weakened or the dollar index is strengthened.
05:08 And there was cumulatively about 8,000 crores of outflows.
05:11 Despite that, we've actually made this 300-400 point dash in the Nifty in the last week.
05:16 Just shows you the inherent strength.
05:18 And therefore, I doubt anybody can tell you with concrete belief that, no, this is too
05:25 much and we will correct, or no, this is too little and therefore we will move up.
05:29 But just looking at the fact that we defended 19,300, something that Gautam Shah of Goldilocks
05:35 had mentioned in an interview to us, something that CK Narayan wrote in a note to us, just
05:40 bringing technicals into the picture, it does seem like that people are saying that there
05:44 could be more in store.
05:46 So I think 100 points, 120 points is, you know, a day's move, half a percent can happen
05:53 any time, frankly.
05:54 20,000, I think now is just a number.
05:56 Ab ki baar Nifty 50,000, remember, that's a note that I've written.
06:01 So not necessarily in the current rally, but the optimism is very, very strong.
06:06 Anyways, coming back to what could happen.
06:08 So the answer is yes, I think it could very well happen, but who knows.
06:13 I do think that there is the construct laid for that, but it's a small number, 100 points
06:18 doesn't matter.
06:20 Stocks to watch in the session today in such a scenario.
06:23 Well, price volume buzzes as far as Friday's session go.
06:28 So have a 6% higher.
06:30 RECB have seen massive moves there on good volumes.
06:34 The delivery percentages were a bit lower, but there is a damn capital note, which at
06:38 the end of the trade setup, I will bring out and say, what is it that they are saying is
06:42 likely happening there?
06:44 IRCTC was up to 1.5%, Concor was up about 2.5% on good volumes.
06:48 I'm bringing out the liquid names, a touch of mid cap and small caps would have been
06:51 even higher, but I'm just bringing on the liquid names and what's happened in some of
07:00 those.
07:01 Then the newsmakers, so Sham Metallics have announced an OFS up to 5.11% stake for 414
07:07 rupees a piece.
07:08 That's lower than the current market price of 467 obviously.
07:14 Promoters will sell stake, will bring their stake down to 83%.
07:18 However, promoters have to bring their stake down below 75% by sometime next year.
07:24 So there is still some selling that could happen, but it's a business that has done
07:29 very well in the recent past.
07:34 Maybe there's a technical pullback that could come in Sham, but certainly looks that the
07:38 business momentum for Sham is very strong.
07:41 This is a technical overhang that stays on the stock until they bring that stake down
07:45 to 75%.
07:46 But the business momentum looks very strong as they are reading some of the notes.
07:51 I say say securities, I believe in some of the others.
07:53 They all talk about some fairly strong earnings for Sham as well.
07:58 Let's see, we'll try and talk to the management once this OFS is done to get a sense of what
08:03 looks like in their business.
08:04 So lots of things happening.
08:07 Keep Sham in focus.
08:08 I was reading a note from an advisor which has advised its clients to subscribe to the
08:15 OFS as well in the book build process, I believe.
08:18 So watch out for Sham.
08:20 It may not necessarily stay low, even if it goes down.
08:24 Raj, BPCL, ethanol stocks, all of these will be in focus.
08:30 The Global Biofuels Alliance has been launched with the support of 19 major consumer, producer
08:35 and interested countries.
08:36 Remember, this is too soon to try and talk about what will happen.
08:39 Right now it's government to government.
08:41 When the industry will be brought into picture in a month, month and a half, whatever you
08:44 call it.
08:45 But the point being the stage of the decks are being laid out for biofuel policy to succeed.
08:52 And therefore the players within that would have more confidence to invest, would probably
08:56 have more years in the global arena as well and global companies in the Indian arena.
09:01 So it works both ways.
09:03 I think this is a shot in the arm.
09:05 I would reckon that some of these stocks stand a chance to react today as well.
09:10 It would be wrong to try and think of the benefits accruing to these companies immediately.
09:15 Fundamentally, it is wrong, but it's a market which is hungry for ideas, for news and for
09:22 reactions and therefore reactions may well happen.
09:25 Into these and into the railway and shipping stocks as well.
09:27 India, Saudi Arabia, UAE, US and select European countries have joined hands to do a large
09:33 infrastructure deal.
09:35 The potential rail and shipping corridor will enable greater trade amongst the countries.
09:38 This for a lot of people is a counter to China's one belt one road initiative.
09:47 For a lot of people, it is also a laying out of a corridor which is a higher likelihood
09:54 of success simply because it's not happening amongst indebted nations alone.
09:59 The limited point from a stock perspective is that it again sets the stage for some of
10:06 these companies to have a larger global presence.
10:09 Remember, company after company has spoken to us about global ambitions as well.
10:13 In fact, we've done a conversation with TTAGAR back in TTAGAR rail systems from their shop
10:18 floor, which will be on BQ Prime either today or tomorrow.
10:22 And it will show the global ambitions that promoters now have for these companies.
10:27 So this is to be watched out for.
10:29 I would reckon that some of these stocks could react today as well.
10:33 Fundamentally is there a reason for them to react?
10:34 No, the details are not known as yet.
10:36 But like I said, it's a market that is hungry.
10:39 And even if these are expensive names, you might well see a reaction today.
10:42 IRCTC, the company will cater all coaches and trains booked on FDR as detected by the
10:47 Ministry of Indian Railways.
10:49 Watch out for IRCTC had a move, as I explained earlier in Friday's session, but will be in
10:55 focus today.
10:56 Phoenix Mills, the company's opened the Phoenix Mall of the millennium at Wacar, Pune.
11:01 The mall encompasses 12 lakh square feet of gross legal space with entertainment zone
11:04 covering one lakh square feet, an addition of 14 lakh square feet of modern offices.
11:09 I don't know if it's 14 or 1.4, but be that as it may, but whatever the number, but addition
11:14 of, let's say, 14 lakh square feet of modern offices and with two start operations in FY25.
11:19 So if this gets a good response and if the office space gets leased out well, then, you
11:27 know, it's a shot in the arm for the stock.
11:30 It's at 1841.
11:31 Never know, there could be a modern store.
11:33 We are at Logistics.
11:34 SBI Mutual Fund has bought about 19.29 lakh shares at 681 rupees a piece.
11:40 Watch out for this one.
11:42 Then Morgan Stanley on PB FinTech, largely the PB FinTech clarifications.
11:45 Morgan Stanley maintains the world with the price target of 910.
11:49 It says that the company clarified that it has no plans to become a direct insurer, no
11:53 decision on reinsurance business as yet, and believes that the reinsurance market in India
11:58 could be an interesting opportunity, unlike the crowded direct insurance market.
12:03 Watch out for PB FinTech, had a move in Friday's session.
12:08 This clarification, does it bring about a bit of a corrective move?
12:12 Good.
12:13 Then Macquarie came out with a note on Friday, during market hours, but I'm bringing some
12:17 of the updates today because people are looking for value.
12:21 Macquarie is saying that stocks that are trading at a discount to their own five-year average
12:25 P multiples, rolling to your forward multiples, and where they have a price target upside.
12:30 HDFC Bank, TCS, HPCL, ICICI Bank, Asian Pains, Tata Motors, HUL.
12:38 So well, you know, watch out.
12:42 There could be some bit of flavor into these stocks now that the market starts hunting
12:45 for pockets which have not rallied thus far.
12:48 Remember, that's the thing that we've been talking about all through the last two weeks.
12:51 And we saw signs of that in L&T.
12:53 We saw signs of that in Gold India.
12:54 We're starting to see signs of that in HDFC Bank.
12:58 Watch out for these pockets, even the oil marketing companies for that matter.
13:02 So do watch out for that.
13:03 Now, a lot of your queries, view on cement sector, especially Ambuja.
13:09 I can't talk on specific stocks, of course, especially Ambuja, which is an Adani Group
13:13 company because we are 14% owned by the Adani Group, by Adani Media Networks.
13:19 But cement, well, logically speaking, Kevin, if infrastructure is going to be the blue
13:23 eye of India CapEx over the next few months, naturally so cement benefits.
13:32 Now is there pricing discipline?
13:35 Maybe not.
13:36 Is there, are the takers at much higher prices?
13:39 Maybe not.
13:40 But is the industry getting more and more consolidated?
13:42 You can see that with the Sangi deal and some of the other deals on offer, they're very
13:45 likely so.
13:47 And therefore, some of the larger players never know, could benefit disproportionately
13:51 in the times to come.
13:52 So yeah, do watch out for that.
13:55 Any teams coming out of G20 meet?
13:58 You know, we spoke about that earlier in the stocks to watch things, Sahil.
14:01 I mean, look at the biofuels, look at the infrastructure piece.
14:06 And just I think one of the strongest teams coming out is India and the fanfare for India,
14:10 a really strong move that should hold us in good step.
14:14 And even if even as we are expensive, there's a large story on that same today as well.
14:18 They put a bunch of global managers talking about how India seems to be the signature
14:23 of multiple eyes.
14:24 You and Archon again can't talk about specific stocks, unfortunately, but almost everything
14:30 related to this pocket is looking very, very solid.
14:34 I would just urge that little bit of caution, because, you know, last week we spoke to Samir
14:39 Arora, we spoke to Ashwini Agarwal and all of them had to say that, you know, this tape
14:44 has played out multiple times in the past, but in the markets, nothing can go wrong.
14:47 And it does.
14:48 It was the same case with speciality chemicals, same case with IT.
14:51 Everybody said the world is getting digitized.
14:53 How can I be stocks correct?
14:55 And then look at what happened to them.
14:57 So just be a bit cautious on the valuations into some of these companies in this pocket.
15:03 I don't unfortunately have a specific view on Archon.
15:05 I can't narrate a specific view on a specific stock.
15:08 It's just wrong.
15:09 But I'm just saying that this pocket has got meat around it for sure.
15:15 Can the stocks rally further?
15:16 Surely they can.
15:17 Are they expensive?
15:18 In a lot of cases, they are.
15:22 And just be a bit careful is the limited point.
15:24 If you're making a fresh entry, please be very sure about your view and the time duration
15:28 for which you are entering into some of these stocks.
15:30 That's my limited request.
15:34 But you know what?
15:35 We will talk about all of these things with an expert today at 10am on Talking Point.
15:39 That's a flagship show where we try and talk about what some of the teams that are the
15:44 current ones would be like.
15:46 And Franklin Templeton's Ajay Argil joins in at 10am on Talking Point to talk about
15:50 that.
15:51 We will do a conversation on the biofuels alliance with Praj Industries.
15:55 So Shishir Joshipura of Praj joins in at 10.30am.
15:58 We spoke to him last week, I know.
16:00 But it's important because of what's happened to talk to him again.
16:03 So join in for that conversation at 10.30am if you want to understand what the global
16:07 biofuels alliance could mean for India and for the companies operating in that sector
16:12 as well.
16:13 So that's the other thing.
16:14 And a clutch of the standard conversations that we do, IPOR does, the trade talks.
16:19 We are going to be starting Ask BQ, wherein you can pose your queries as well.
16:23 So a lot of queries that you're posing to me, you can also pose on that show.
16:27 And my colleague Alex will be talking about it.
16:30 So our small cap stocks showing signs of overheating.
16:33 We'll be talking about that pocket in particular.
16:36 But if there are individual queries, please go out and ask.
16:39 And maybe Alex will be able to take some of those.
16:41 So keep that at the back of your mind as well.
16:44 Thanks so much for tuning in to the trade setup today.
16:47 Have a great day ahead.
16:56 Thanks.
16:57 Thanks.
16:57 Bye.