The Nifty gained strength in the last couple of hours of trade in a volatile session on October 11 and closed with more than half a percent gain, driven by technology (except TCS), metals, select auto and FMCG stocks.
The index closed above 11,300 levels after trading in a range of 180 points and registered a Spinning Top kind of indecisive formation on daily charts, but formed bullish candle on weekly scale.
Sensex, Nifty and Bank Nifty gained 1 percent each for the week while the midcap index ended flat.
"Markets during the week saw paradigm reversal of sentiments. The government's efforts are indeed paying off. These steps include an increase in dearness allowance to 17 percent, corporate tax cuts, interest rate reduction, timely tax refunds as well as nudging capital expenditure from PSUs have all reflected in the confidence of domestic bourses," said Jimeet Modi, Founder & CEO at Samco Securities.
"Steady inflows of SIP in mutual funds at around Rs 8,200 crore for the month of August 2019 strengthened support in our stock market. On the other hand, FPI data shows that outflows have also reduced nearly by half which in a way indicates that they can soon turn bullish now, given the increased optimism in the Indian economy," he added.
Bank Nifty remained highly volatile and continued to trade in wider range between 27,500-28,600 levels. The index closed 0.08 percent higher at 28,036.35 and formed a bearish candle on the daily scale while small-bodied candle on a weekly scale with a long upper shadow which suggests that selling pressure is seen at higher zones.
Maximum Put open interest is at 11,000 followed by 11,200 strike, while maximum Call open interest is at 11,500 followed by 12,000 strike. Marginal Put writing was seen at 11,000 then 11,300 strike while Call Unwinding was seen at all the immediate strike.
Options data suggests the Nifty could trade in the wider 11,000 to 11,600 levels range.
"Technically, Nifty formed bullish candle on daily as well as weekly scale with the long upper and lower shadow which implies that dips are being bought but at the same time supply is intact at higher levels. Now it needs to continue to hold above 11,250 zones to witness a bounce towards 11,400 then 11,500 zones while on the downside major support is seen at 11,100 levels," said Siddhartha Khemka, Head - Retail Research at Motilal Oswal Financial Services.
Here are the top 10 stocks which moved the most this week:
Top Gainers:
Bandhan Bank, up 22%
Shares gained 20 percent on October 11 amid reports that the Bandhan Bank stock could be added to the MSCI Index in the coming week. Gruh Finance, which merged with the private sector lender, also climbed 20 percent. The bank could be added to the MSCI Index from October 16 following the Gruh Finance acquisition.
"We expect the stock to be included in the index with the weight of approximately 50 basis points, which could bring a flow of $180 million," Motilal Oswal said in its note.
The National Company Law Tribunal (NCLT) had approved the merger in September and the record date was fixed as October 17 for determining the shareholders of Gruh Finance who will be entitled to equity shares of the bank. The bank will issue and allot 568 equity shares for every 1,000 shares held by Gruh shareholders.
Vodafone Idea, up 18%
The share price of Vodafone Idea jumped as much as 19 percent this week with the scrip spiking 17 percent on October 10. The movement followed Reliance Jio's announcement that they will be charging an Interconnect Usage Charge (IUC) from customers for calls made to the other networks.
According to CLSA, Jio’s IUC charge is likely to pressure TRAI to abolish the tariff. Further, if Bharti Airtel and Vodafone Idea maintain their tariffs, the FY21 EBITDA will be 2-11 percent higher. The benefits of the current move for incumbents is unclear and remain cautious on Bharti Airtel and Vodafone Idea, said Jefferies.
GRUH Finance, up 14%
Gruh Finance jumped 14 percent for the week with the stock adding 25 percent in the last nine months. The company merged with Bandhan Bank and climbed 20 percent on October 11. Bandhan Bank could be added to the MSCI Index from October 16 following its acquisition of Gruh Finance.
NCLT had approved the merger in September and the record date was fixed as October 17 for determining the shareholders of Gruh Finance who will be entitled to equity shares of the bank. The bank will issue and allot 568 equity shares for every 1,000 shares held by Gruh shareholders.
Bharti Airtel, up 11%
The share price of telecom major Bharti Airtel registered gains of over 11 percent for the week with the stock zooming over 45 percent in the last year. It touched a 52-week high of Rs 384.85, gaining 7 percent on October 10. The movement followed Reliance Jio's announcement that they will be charging IUC from customers for calls made to the other networks.
Edelweiss has maintained buy on Bharti with a target at Rs 414 per share.
Biocon, up 6%
Pharma company Biocon added 6 percent for the week with the stock gaining 14 percent in the last 15 days. The stock rose over 4 percent after the company said that its wholly-owned subsidiary Biocon Biologics and Just - Evotec Biologics have entered into a strategic licensing agreement for an early stage, pre-clinical biosimilar asset.
"Through this in-licensing deal, Biocon Biologics has expanded its current therapeutic basket of biosimilars going beyond diabetes, oncology and immunology," the press release stated.
Cipla, up 5%
Cipla added 5 percent gains this week with the stock rising 4 percent on October 11 after management clarified on Goa unit inspection, saying there are no data integrity and repeat observations. The stock fell nearly 8 percent in early trade today after seeing 12 observations issued for Goa unit last month.
"Site at Goa has about 10 units just to clarify across various dosage forms. If you read the 483 document there are no data integrity-related observations and no repeat observations there. We would not read too much into the number of observations. We still have some time to respond to them (US FDA). It should be soon," Kedar Upadhye, Joint President and Global CFO, Cipla told CNBC-TV18.
Top Losers
Century Textiles, down 55%
The share price of Century Textiles & Industries slumped over 55 percent for the week and has been seen a steady decline in the last few months. The company will hive off its cement division and merge it with UltraTech Cement. Century Textiles shareholders will get one share of UltraTech for every eight held.
Aurobindo Pharma, down 24%
Aurobindo Pharma tanked 24 percent hitting a five-year low after promoters create pledge earlier this week. K Nityananda Reddy created a pledge on its 7.85 lakh shares (representing 0.13 percent of total paid-up equity) on October 9, taking total pledged shares to 58 lakh or 0.99 percent of total paid-up equity.
"Pledge creation - on the shortfall of security for the existing loans due to fall in share price," the company reasoned in its BSE filing. Aurobindo, in its BSE filing, said Spoorthi pledged 5 lakh shares with Bajaj Finance on October 7 while 1,50,000 shares each are pledged with Sharekhan BNP Paribas Financial Services and Aditya Birla Finance on October 9.
Indiabulls Housing Finance, down 21%
Indiabulls Housing Finance ended 21 percent lower for the week after the RBI on October 9 rejected the merger proposal between Lakshmi Vilas Bank and mortgage lender Indiabulls Housing Finance.
"This is to inform that RBI vide their letter dated October 09, 2019, informed that the application for voluntary amalgamation of Indiabulls Housing Finance and Indiabulls Commercial Credit with Lakshmi Vilas Bank cannot be approved," Lakshmi Vilas Bank said.
Indiabulls Housing will be affected by the central bank's decision as it was seeking to diversify its asset base. After the deal was rejected, Indiabulls Housing executive director Ajit Kumar Mittal said they are relieved as there will be no more uncertainty in the market over the proposed merger plan.
Edelweiss Financial Services, down 18%
Edelweiss Financial Services was down 18 percent for the week after its subsidiary approached the Bombay High Court to recover dues from debt-laden DHFL.
"Our subsidiary Edelweiss Asset Management (which has various schemes of mutual funds) has approached the Bombay High Court for recovery of principal and interest dues from DHFL," it said in a regulatory filing on October 10.
The company said that its action is in accordance with other peers in the industry. "The company has a very small exposure. The overall exposure is less than Rs 70 crores. Many other companies have moved court. Whatever the company is doing is in the interest of the shareholders," a source said.
RBL Bank, down 14%
The share price of RBL Bank was down 14 percent for the week. The stock has registered a 60 percent loss in the last six months. However, CARE Ratings on October 9 reaffirmed the CARE AA- (Stable) rating for the Basel III-compliant Tier II bond programme of RBL Bank for Rs 800 crore.
The agency said the deposit base is also fairly concentrated on account of higher reliance on bulk deposits, with top 20 depositors accounting for 18.41 percent of total deposits as on March 31, 2019, although the same has reduced from 19.27 percent as on March 31, 2018.
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