Markets likely to be range-bound as Nifty eyes 10,000, two IPOs open this week
Mumbai: The markets are expected to be range-bound this week as the Nifty is close to touching the 10,000 level once again. Investors may also react to the third cabinet expansion by Prime Minister Narendra Modi on Sunday. The National Democratic Alliance (NDA) added nine ministers to the Union Cabinet on Sunday.
Nagaraj Shetti, technical research analyst, HDFC Securities, said the Nifty indicates an upside bounce-back, which could extend a little further before showing sharp declines from the highs. “For near term, Nifty is expected to show further upmove and is likely to reach the upside of around 10,100-10,150 levels in the next 1-2 weeks,” he added.
However, global markets may turn weak as North Korea tested a hydrogen bomb which may spark a sell-off in India as well. According to AFP, North Korea detonated a hydrogen bomb with “perfect success”, its state media said on Sunday, adding that the device was capable of being loaded onto its long- range missiles.
In the primary markets, shrimp exporter company Apex Frozen Foods will make market debut on Monday. With an issue price at Rs175 per share, the Rs152 crore initial public offer (IPO) was oversubscribed 6.14 times, receiving bids for 3.8 crore equity shares.
Two IPOs, Dixon Technologies and Bharat Road Network, will open for subscription this week. Dixon Technologies, which is a contract manufacturer of electronic products, is aiming to raise Rs600 crore through an issue price of Rs1,760-1,766 per share. Bharat Road Network, a Srei Infrastructure Finance initiative, has fixed a price band of Rs195-205 per share for its IPO and aims to raise Rs600 crore.
Meanwhile, India’s service sector Purchasing Manager’s Index (PMI) for August will be released this week. The Nikkei/Markit Manufacturing Purchasing Managers’ Index rose more than three points to 51.2 in August from 47.9 in July.
Mustafa Nadeem, chief executive officer, Epic Research, said the strategy for investors in September should be buy on dips if markets are able to hold 9,750-9,700 levels, while we see momentum to pick up once we breach the wall of 10,100. “Our view will negate in case a close below our supports are seen. That will be a point of stop and reverse for lower levels of 9,400-9,450,” he added.