December 1, 2023

Markets Hit New All-Time High!

Tale of the Tape

Hiya everyone. The weekend is here! 👯

Strong Q2 GDP data helped the Nifty hit a new all-time high of 20,291 and the Sensex ended +0.7% higher. Midcaps (+1.1%) also Smallcaps (+0.5%) saw healthy movement. The advance-decline ratio was split in favour of the bulls (3:2). 📈

Most sectors ended in the green. PSU Banks (+2%) and FMCG (+1.6%) led the rally today. Real Estate (+1.3%) and Metal (+1%) stocks also saw healthy gains. Auto (-0.3%) was the lone loser. 🚗

With a new Nifty ATH, which stocks were the top winners since the last high? Read our top story below. 💯

PSU Insurers are on a roll, but will it last? More details below. 🔥

Brokerage firm UBS downgraded Bajaj Auto (-1%) to a ‘sell’, citing stiff competition & rising costs. 👎

Dixon Technologies (+8%) hit a 52-week-high. Its subsidiary started production of Xiaomi phones at its new plant today. 📱

Bharti Airtel hit a record high after 1.4% equity changed hands in a block deal. 🤝

Whirlpool of India (-10%) was the top NSE 500 loser after its parent company said it would sell a 24% stake in the firm. 📉

HAL hit a 52-week-high after it said it bagged a massive Rs 65,000-cr order from the Defence Ministry. 💰

Kesoram Industries was locked in a 5% upper circuit. UltraTech Cement will be acquiring its cement biz in a Rs 5,379 cr deal. 🏭

IPO update. Flair Writing Industries listed a strong 66% premium to its issue price. 🤑

Here are the closing prints:

Nifty	20,267	+0.7%
Sensex	67,481	+0.7%
Bank Nifty	44,814	+0.8%

Leading The Way

The Nifty has officially hit a new record high! The index hit 20,291 today, beating its previous record of 20,222 which it scaled back on Sept 15. FYI – most of the gains since then came after October 26, which is when the Nifty corrected to a low of 18,837. 🚀

Since the last ATH, here are the top winners across different market segments:

1) Nifty: The top gainers are Hero MotoCorp (+25%), Bharat Petroleum Corporation (+24%) and Coal India (+22.5%). Overall, auto + energy stocks have outperformed the index since September 15. This is because global oil prices fell from a high of $94 per barrel to around $80 per barrel. Two-wheeler and auto companies also had a GREAT festive sales season. 🏍️

2) Midcaps: Prestige Estates (+66%), Power Finance Corporation (+63%) and REC (+53%) saw the biggest gains. Real estate has been a major 2023 winner and seen a reversal of its fortunes after the Covid years; Prestige has been the sector’s star performer. As for power PSUs, the energy theme plays a big role. FYI – power demand hit a 5-year-high in Sept 2023! ⚡

3) Smallcaps: The top 3 winners are BSE (+98%), Multi Commodity Exchange of India (+77%) and Angel One (+62%). FYI – the two stock exchanges have been killing it for sometime now. BSE hit its HIGHEST-EVER revenue in Q2FY24 (+53% YoY). MCX on the other hand finally shed some legacy issues by transferring over its tech platform. Finally, Angel One has been the darling of the broking industry for some time now. But it’s also looking to expand into the insurance & mutual fund biz, a move that’s earned the attention of bulls. 📈

Stocktwits Specials

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Insurance Stocks Are Hot!

Is Life Insurance Corporation of India (LIC) starting to see some signs of life? After a disastrous IPO, it hit an all-time low in March 2023. Since then, it’s recovered and is up 8% in the last week and 13% in the last month. ✅

FYI – other PSU insurers like New India Assurance (+67% over the last month) or General Insurance Corporation (+34%) are seeing monstrous gains as well. 😍

The sudden gold rush is due to several factors. For starters, they’ve launched new products that have seen a lot of buzz. LIC for instance rolled out a new ‘guaranteed 10% return product’ this week. Customers can apply for a life insurance product that offers income benefits of 10% of the sum assured. The income benefits start flowing after the policy period, which is in turn linked to the premium payment cycle. They make little sense for the savvy investor, but experts say they are likely to be big hits with the general public. 💸

Another key bull factor is that fundamentals across the sector are improving. Last month, several credit rating agencies upgraded firms like General Insurance Company, citing a remarkable improvement in the risk-adjusted capitalisation + regulatory solvency position over the last year. 📊

Finally, it’s possible that broader regulatory rules are sparking investor interest. As Samco Securities Veer Trivedi notes: “This [insurer stock movement] may be due to the external factors like increased risk-weights for NBFCs which may have led to institutional outflows from these stocks to insurance companies.” 🤓

Big Picture: While there’s momentum going right now, experts are divided over long-term prospects for the sector. Brokerage firm Motilal Oswal believes that LIC has a bunch of growth levers and has a target price of Rs 820 p/sh (+27% from current levels!). Others like JP Morgan believe New India Assurance will crack 65%, citing inefficient capital allocation. We’ll have to wait and watch how this develops. ⏱️

Movers and Shakers

Here’s a look at this week’s top NSE500 movers. Adani Total Gas took the pole position after rallying +31% 🥇 Aster DM Healthcare (+19%) hit a new all-time after agreeing to sell its GCC business. Aether Industries slipped -11% after a fire broke out at its Surat plant. Whirlpool of India (-9%) was under pressure on reports of promoters reducing their stake. 📉 Check out their charts below: