Eqwires | Stock Market Advisory

With the markets in a downtrend several stocks have logged back-to-back losses in the recent trading sessions. Data from NSE futures & options market shows, that 33 out of the 223 stocks in the derivatives segment logged a net loss in the last four trading sessions; with a majority of them i.e. 30 out of these 33 stocks seeing an over 10 per cent increase in open interest (OI). 

In general, a dip in price accompanied with a corresponding increase in open position (interest) is considered as build-up of short position at the particular contract. 

Meanwhile, the NSE Nifty 50 index had ended last week with a loss of 2.4 per cent at 23,432. The Nifty January futures were down 0.6 per cent on Friday while the OI also dipped by 0.7 per cent. However, over the last four trading sessions the Nifty January contract has seen near 9 per cent increase in OI amid the declining trend. 

NSE data shows that Tata Exlsi has seen a huge 63.5 per cent increase in OI, while the stock dipped by 8 per cent. On Friday along the stock was down 7 per cent on the back of 33.5 per cent rise in OI.

Among others, in the last four trading sessions, CESC has shed 7.2 per cent while the OI jumped by 44.3 per cent. Paytm tumbled 12.5 per cent amid a near 40 per cent surge in OI. Kalyan Jewellers has cracked 16.5 per cent while the OI rose over 35 per cent.

Similarly, Angel One and JSW Energy too witnessed an over 27 per cent increase in open positions, while the respective stocks logged an 8.2 per cent and 10.2 per cent fall. 

Category-wise bets on Nifty / Index futures 

Data shows that retail investors are most bullish at current juncture, with the long-short ratio in index futures at a seven-month high. An analysis of F&O data reveals that retail investors index futures long-short ratio now stands at 2.53 – implying 5 open positions on the long (bullish) side of trade as against 2 short (bearish) bets. 

Retail investors were this bullish last on June 04, 2024, the day of Lok Sabha Elections results, with a long-short ratio at 2.45. 

On the other hand, foreign institutional investors (FIIs) continue to hold heavy short positions with index futures long-short ratio at 0.19. This ratio implies that FIIs hold 5 short positions for every long trade in index futures. 

Data shows that FIIs OI in Nifty futures alone has increased by 20 per cent in the last four trading sessions; while the total OI in index futures has increased by 16.9 per cent in the same period. FIIs OI in Bank Nifty and   MidCap Nifty futures has risen by 16 per cent and 8.8 per cent, respectively. Thus suggesting an overall negative bias on the Indian stock market for now. 

Analysis of the Nifty options data too suggests softening sentiment, with aggressive call writing and reduced put interest. 

“Aggressive call writing in the 23,500 – 24,000 range signalled diminishing buying interest while unwinding put positions underscored mounting bearish sentiment. The Put-Call Ratio (PCR) edged up from 0.65 to 0.73, reinforcing a prevailing bearish tone. The max pain point stands at 23,700.” said Dhupesh Dhameja, Derivatives Analyst at  SAMCO Securities.

A sustained dip below 23,270 would expose the Nifty to further declines toward 23,000. The broader trend remains bearish, favoring a “sell-on-rise” strategy as buyers struggle to sustain gains at elevated levels, Dhupesh added.

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India stock markets today crashed 1 per cent in intraday trade on Monday, January 13, 2025, leaving investors looking for cover. The BSE Sensex index today tumbled 1,128 points or 1.4 per cent to hit a low of 76,250. The NSE Nifty50, on the other hand, shed 357.5 points or 1.5 per cent to touch a low of 23,047. The BSE MidCap and SmallCap indices, on the other hand, bled over 4 per cent each in the intraday trade. 

While the benchmarks have dropped 1 per cent in the first seven sessions of January, they are down up to 11 per cent (Sensex 10 per cent, Nifty 10.8 per cent) from their record high levels hit in September 2024.

Analysts attribute the ongoing correction in the stock markets to a confluence of factors, including profit booking by foreign investors, weak capex by the Central government during the first half of the current financial year (H1FY25), tepid consumer demand triggered by prolonged rains and sharp spike in food inflation, and US President-elect Donald Trump returning to the White House with his protectionist policies. 

Besides, fears of a shallow rate cut cycle by the Reserve Bank of India (RBI), amid sticky inflation (back home) and likely inflationary policies by Trump (globally), has added to the currency volatility amid rising yields.

Going ahead, analysts see a slow pace of recovery for the India stock markets, with Trump’s Presidency and the Union Budget 2025, back home, holding the key to the recovery in investors’ portfolio.

When will Indian stock markets recover from ongoing correction? What should investors do now? Stock market prediction:

Prabhudas Lilladher Institutional Equities:

With food inflation having peaked out at 10.9 per cent in October 2024, and the Government trying to accelerate capex spending, we expect gradual economic recovery to set in. We are already witnessing an uptick in ordering momentum in Railways, Defence, Power, Data centers etc, the execution of which will accelerate growth in FY26 and beyond.

We believe the upcoming budget 2025 and Trump 2.0 hold key to market returns. 

We expect markets to remain volatile in the near-term but stabilise towards the end of Q4FY25. We would recommend selective buying in current turbulent times for long-term gains given reasonable valuations as long-term India growth story remains intact. 

We are turning IT services to overweight and auto to equal weight. We are increasing weights in Capital goods, Healthcare, IT services, and Oil and Gas (RIL). Among stocks, we are removing Hero Moto, Avenue Supermart, and Nestle from model portfolio. We are increasing the allocation for L&T, Siemens, HDFC Bank, Maruti, Britannia, HUL, ITC, Max Healthcare, Infosys, and Reliance Industries.

Emkay Global Financial Services:

The markets should remain weak during Q1CY25, but we expect stability from Q2CY25, with earnings outlook improving and the FPI selling abating by then. We see the Dollar Index rally petering out after the Trump inauguration, as we see minimal risk of a full-blown trade war. 

Moreover, India’s earnings downgrade cycle should be done by then, and the froth in valuations has also subsided. We don’t see aggressive FPI buying returning, though. 

That said, Q1CY25 could see extreme volatility and spells of intense selling until the dust settles around the geopolitical uncertainties.

As a strategy, we go contrarian and downgrade Technology to ‘Neutral’ on valuations and upgrade Consumer Discretionary to ‘Overweight’ on the expected turnaround. Staples and Financials are our ‘Underweight’ sectors. We are also ‘Overweight’ on Healthcare and Real Estate. 

Top stock ideas for CY-2025: We like Lupin, Zomato, and Tata Motors among large-caps; IndusInd Bank, Escorts, and One97 Communications in mind-caps; and StoveKraft, Metropolis Healthcare, and Quess Corp in small-cap stocks. 

Kotak Institutional Equities:

The recent sharp correction in the Indian market and stocks across caps does not change our cautious outlook for the market, given full-to-frothy valuations in most parts of the market, low scope for earnings upgrades, and an uncertain global macro-environment and likely higher-for-longer bond yields and interest rates.

In our view, large-cap stocks may hold up better in the next few months while mid-cap, small-cap, and ‘narrative’ stocks will see further severe correction if the alignment to fundamentals and value were to continue. FPIs are unlikely to look at India favorably in a hurry, and retail investors would increasingly contend with dwindling trailing returns. 

Yashovardhan Khemka, senior manager – research and analytics at Abans Holdings:

We anticipate a further market correction of 4-6 per cent before the recovery begins. A clearer understanding of Trump’s policies, likely one-two weeks after his inauguration, could help stabilise market sentiment. Investors are advised to adopt a cautious “wait-and-watch”.

Manish Chowdhury, head of research, StoxBox:

Our sense is that downside risks from the current levels looks limited and it would be prudent to build positions in high-quality stocks where valuations are reasonably comfortable from a medium to long term perspective. The upcoming Union budget and the RBI monetary policy meeting in February have the potential to surprise market participants on the upside, by unveiling measures to catalyse growth in the Indian economy.

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Shares of Atlas Cycles (Haryana) were locked in the upper circuit for the 10th straight day, up 10 per cent at Rs 112.78 on the BSE in Friday’s intra-day trade. In the past 10 trading days, the stock of this micro-cap company zoomed 71 per cent from a level of Rs 66.13 on the BSE. 

Till 02:04 PM; a combined 30,000 equity shares changed hands and there were pending buy orders for around 600,000 shares on the NSE and BSE. In comparison, the BSE Sensex was trading 0.02 per cent lower at 77,603. Currently, Atlas market capitalisation stands at Rs 73.31 crore. Last, on August 2, 2021, the stock price of Atlas closed at Rs 29 on the BSE, the exchange data shows.

The exchanges revoked the suspension in trading of equity shares of Atlas with effect from December 27, 2024. The trading in the securities of the company will be resumed in “T” group, BSE had said in notice dated December 19, 2024. The T group is a surveillance measure that requires securities to be settled on a trade-to-trade basis. 

The trading of shares was suspended by the BSE Limited and National Stock Exchange of India Limited with effect from December 16, 2020 due to non-filing/ delay in filing of financial results of the company, Atlas said in its FY24 annual report.

As on September 30, 2024, Atlas has total 6.5 million outstanding shares of which, 41.92 per cent stake was held by the promoters. The remaining 58.08 per cent stake were with resident individual investors (50.23 per cent), bodies corporate (2.31 per cent) and non resident Indians (NRIs) (1.03 per cent), the shareholding pattern data shows.

Atlas on January 6, 2025 said the movement in company’s share price is purely due to market conditions on which company has neither control nor has any knowledge of reasons. 

“We would like to clarify that the company has intimated/ disclosed to the exchange, every relevant events/ information from time to time which could have any impact on performance of the company, which include all price sensitive information etc. as required to be disclosed under listing regulations,” the company said on clarification on the significant movement in price of the company’s security.

Further, no such disclosure/information/announcement etc. is withheld or pending to be disclosed which could have a bearing on the company’s securities’ price movement, it added. 

Atlas is engaged in manufacturing of bicycles and bicycles components. Bicycle industry has continued to show a growth of around 4 to 5 per cent during last two years inspite of general slowdown in the economy.  

Standard bicycle segment which contributes around 55 per cent of the total sales is growing marginally as compared to Fancy and Kids segments which are growing at 7 to 8 per cent every year. Fancy cycles with features like disc brakes, shockers, alloy wheels and gears are driving the sales particularly in metro and mini-metro cities. With rising income of the middle class, fancy segment especially the kids segment is showing a very healthy growth, the company said in its FY24 annual report.

India is the second largest manufacturer of bicycles in the world. Unlike the developed nations where bicycles are used primarily for health & recreational purposes, India needs bicycles for socio-economic empowerment of 1/3rd of its populations. Growth in population, health consciousness and socioeconomically sustainable rural development are most important demographic trends promoting bicycles as the obvious choice of transportation in future. Out of the total quantity sold, approximately 55 per cent bicycles are roadsters, 25 per cent fancy and about 20 per cent meant for kids. With rising income of the middle class, fancy and kids segment will grow at a much faster pace as compared to normal roadster cycles, the company said.

However, small manufacturers from unorganized sectors are increasing their market presence every year. With little infrastructure and low overheads, they are able to supply bicycles at a very low price as compared to the organized sector because of which profitability of the industry is under stress. Though they are not supplying very good quality products and their after sales service is not comparable, but because of the price advantage, their sales volume is increasing every year, the company said.

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Just Dial Ltd, a local search engine, has reported 42.7 per cent increase in consolidated net profit at Rs 131.31 crore for December quarter FY25.

It had a net profit of Rs 92.01 crore in the October-December period a year ago, according to a regulatory filing from Just Dial, now controlled by Reliance Retail Ventures Ltd.

Revenue from operation was up 8.4 per cent at Rs 287.33 crore in the December quarter.The company “achieved its highest-ever quarterly revenue in Q3 FY25, further solidifying its position as a leader in the digital services,” said Just Dial in its earning statement.

Total expenses were at Rs 215.57 crore, down 1.55 per cent from the year-ago period. Total income during the quarter under review stood at Rs 364.74 crore, up 7.3 per cent.

Commenting on the results, Chief Growth Officer Shwetank Dixit said Just Dial’s focus remains on driving top-line growth while maintaining operational efficiency.

“By enhancing our offerings for users and providing businesses with easy-to-use, advanced tools, we are creating sustainable growth for all stakeholders,” he said.

During the quarter, the company prioritised empowering SMEs by introducing tools designed to simplify campaign management and streamline lead conversion processes.

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Elon Musk has once again raised alarm about the world’s declining population, calling it one of humanity’s greatest threats. Taking to X (formerly Twitter), Musk shared a graph highlighting projected population changes between 2018 and 2100, drawing attention to dramatic demographic shifts in countries like Nigeria, the US, China, and India. 

The graph was initially posted by the Tesla Owners Silicon Valley account, accompanied by the caption: “Population collapse is humanity’s greatest threat… Elon Musk.” Musk retweeted it with a “Yes.”

A declining trend with global implications

Experts have long acknowledged the reality of population decline, but the speed and scale of the crisis remain hotly debated. Declining fertility rates, ageing populations, and emigration are the main factors driving this trend. For a population to remain stable, the average number of children per woman needs to be 2.1— a threshold most countries are failing to meet.

The problem is starkly evident in the United Kingdom (UK), where the fertility rate in England and Wales hit an all-time low of 1.44 children per woman in 2023, according to the Office for National Statistics. This is part of a broader global trend: fertility rates have plummeted from an average of 5.3 children per woman in 1963 to less than half that figure today, as reported by the Daily Express. 

Dramatic shifts in population projections

The graph, first published in 2020, illustrates the profound changes anticipated by the end of this century. In 2018, both India and China had populations of approximately 1.5 billion. By 2100, however, these figures are projected to diverge sharply. India’s population is expected to decline to just under 1.1 billion— a reduction of 400 million. China faces an even steeper drop, with its population projected to plummet to 731.9 million, a staggering loss of 731 million people. If these projections hold, Nigeria will become the second-most populous nation in the world by 2100, with a population of 790.1 million.

A 2020 report by researchers at the University of Washington also suggests that the decline in countries like China and India may occur even faster than previously anticipated. Such rapid changes could reshape global economic and political landscapes. 

Migration offers a buffer for some nations

While many nations grapple with declining fertility rates, the US is expected to maintain its position as the fourth-largest country in the world by 2100, thanks to positive net migration. Similarly, Canada and Australia are projected to sustain relatively stable populations through migration policies. 

Other countries, like Indonesia and Pakistan, will see slight population declines, while African nations such as the Democratic Republic of the Congo and Ethiopia are poised for significant growth. By the end of the century, these two countries are expected to surpass current population giants like Indonesia and Pakistan.

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