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Late Santa Rally

Tale of the Tape 

Hey guys. Markets closed up for a second straight day. 📈

Nifty and Sensex climbed higher on hopes of improving economic outlook while Omicron cases continue to rise. Midcaps (+1.2%) and Smallcaps (+1.6%) rose for the fifth time in the last six days. The market breadth was extremely positive, with five stocks advancing for every one loser. 💪

It was a sea of green across the board. Auto (+1.3%) stocks closed higher for a second straight day. Real Estate and PSU Banks also saw healthy gains, +1.1% each. 🏆

RBL Bank gained 3% after entering in F&O ban. FYI – traders can’t take fresh positions in a stock when it enters the ban list. But, they can close their existing positions. 😎

BSE (+5%) will consider the proposal of a bonus issue on Feb 08. ✌️

Shyam Metalics (+8%) received regulatory approval to increase steel production at its Odisha plant. 🏭

Eris LifeSciences jumped +7%. Brokerage firm Motilal Oswal initiated coverage on the stock with a “Buy” rating, indicating ~20% upside from current prices. 📉

Supriya Lifesciences had a blockbuster listing. The stock closed at Rs 391 p/sh, +43% from its issue price. 💸

Sastasundar Ventures was locked in a 5% upper circuit. Renowned investor Ashish Kacholia bought +2 lakh shares of the company. 👍

Ajanta Pharma (+4%) will buy back shares at Rs 2,550 per share.🤑

Cryptos crept lower. Bitcoin and Ethereum cooled off ~3%. Doge, Cardano and Polkadot dove 4%-6%. 😬

Here are the closing prints:

Nifty 17,233 +0.9%
Sensex 57,897 +0.8%
Bank Nifty 35,183 +0.4%

We’re Not Done Yet

The last few months have been tough. Key indices are down ~8% from all-time highs. The newsflow is equally negative: from the US Fed tapering to the global surge in Covid ases. Naturally, some investors have turned cautious. But, ICICI Securities believes this may not be “The End” of this bull market. Here’s why? 🤔  

The NSE500 closed higher in nine out of the last 12 months. This only happened three times in the past 20 years. Each time in the past, markets rallied for a minimum of 3.5 years, according to ICICI Securities. 📈

But, the ride won’t be bump-free. The average correction in the past has been roughly 14%. According to ICICI, long-term investors should use the opportunity to add quality stocks to their portfolio.💰

ICICI also touched on the topic of rising interest rates. Everyone has been saying that higher rates are bad for stocks. According to ICICI’s analysis, markets rallied during the US Fed’s last three rate hikes! It actually makes sense as rate hikes happen during improving economic periods. 🤓

Based on the above, ICICI thinks the Nifty could hit 21,300 by the end of 2022. That’s a healthy 24% upside from here. All we can say is, aapke muh main ghee shakkar. ✌️

Show Me The Money

Despite Paytm’s lackluster market debut, tech IPOs may continue to turn heads in 2022. 👍 

Rising internet adoption and the pandemic have accelerated digital adoption. We’re seeing tons of startups killing it across fintech and e-commerce. Factors like a favorable regulatory environment and access to venture capital are huge growth drivers. Ola, Snapdeal, Oyo, and Pharmeasy are examples of flagship start-ups expected to grab headlines in 2022. 😍

By the way, it’s not just tech start-ups, 30 more companies have received SEBI’s approval to IPO. The mega LIC IPO may also hit markets in the coming months. 💸 

In 2021, ~60 startups raised Rs 1.2 lakh cr from the markets. Tech start-ups, in particular, had a memorable year. Zomato became the first Indian unicorn to list on the bourses. Policybazaar and Nykaa also received a warm reception. Feels like 2022 could look a lot like 2021! 🤞

More Time

Google has sought more time to answer the Competition Commission of India’s (CCI) questions on Play Store rules. ⏲️ 

What’s the matter: Earlier this year, Google made it mandatory for Indian developers to sell their app services via its Play Store. It even asked developers to integrate their billing system with that of Google. The deadline was set for March 2022, but was later pushed to October. 👍 

Developers claim that Google is abusing its monopoly position and filed an appeal with the antitrust body. PS, Google earned a whopping $11 billion from app purchases in 2019. Meanwhile, developers still complain about revenue loss even after Google reduced its commission to 15% (from 30% earlier). The Alliance of Digital India Foundation (ADIF) has called Google’s latest move a time-wasting tactic.

Both Google and Apple have received backlash from developers in several countries over their app store policies. ICYMI, Fortnite developer Epic Games, and Apple were also involved in a messy legal battle over revenue sharing. Here’s the latest on the case. 👀