Traders monitor BSE index at a brokerage firm, as the Sensex goes down, in Mumbai | PTI
The month of May saw two large share sales —Rs 25,000-crore in Hindustan Unilever (HUL), and Rs 8,400-crore in Bharti Airtel
(Airtel). The common factor in both share sales was that French bank Société Générale (SG) was the biggest buyer. In the case of HUL, SG picked up nearly 10 per cent of the shares on offer at an outgo of over Rs 2,400 crore. In the case of Airtel, it picked up nearly a fourth of the shares on offer by paying Rs 1,981 crore. At a time when overseas investors are in withdrawal mode, such huge investment is an encouraging sign. “Marquee long-term investors like SG are on the lookout for block deals in large companies. Such a huge acquisi-tion is not possible in the secondary market without price distortion,” said an investment banker.
The long build-up by foreign portfolio investors
(FPIs) in index futures during the last few days and the fall in India VIX, a fear gauge, by 11 per cent in May has added to optimism that the Nifty50 index will see an uptick in the June series. The options data suggests a wider trading range between 9,000 and 10,000. Crucial support for Nifty
is placed at 9,000-8,800 zone, while resistance can be seen around 9,900 and then 10,300 levels. Banking counters ended the May series in negative territory and formed a good amount of short positions. Some short covering was seen in bank stocks in the last few trading sessions. "If the Nifty
Bank sustains above 19,500, we may see further short covering taking it towards 20,600 and then 22,000 mark. The immediate support for the index is at 18,200 level," said Chandan Taparia, derivatives analyst at Motilal Oswal Financial Services.