Market Analysis: MMTC-STC merger, Lupin, Reliance Nippon AMC, HDFC Life IPO

Stock market update
After many trading sessions, investors have now started selling at higher levels in market. Pharma sector is one of the top losers in the the market this month. But sectors like few government companies have seen a great buying in this month. However, at present levels it may possible that market would consolidate for some time. Because of fair quarterly results so far, there are less chances that market would see any great buying interest in November.

MMTC-STC Merger?

There are some news in market that MMTC-STC would soon be merged to form a single stronger trading company. As of now, there is no final decision by government on that matter. However, the great buying in both stocks shows some positivity in this merger.

If this merger really happens, then definitely it would be a good news for all the STC and MMTC investors. But as much of the buying have already came in stocks, there are less chances of having another great rally in stocks in next few weeks.

I remember, when MMTC was quoting at Rs 1300 just few years ago or around 2011. From that price, stock has continuously seen only price depreciation.

Although, if the merger between both the companies really happen, then it would definitely have a positive impact on both companies valuations in near-term. However, who wants to enter in stock should avoid any bulk buying at current levels. But remember, stocks have already rallied over 30 percent in this month.

Lupin under high selling pressure

On tuesday trading session, lupin was conveniently quoting around Rs1020. But around 1 pm, a sudden high selling pressure came in stock after USFDA issues. Company received warning letters from USFDA on their plants. With an hour of this news, stock got broke almost 20 percent from its highs.

Fundamentally, i don’t think that it would be a good choice to buy Pharma stocks at current levels except few companies. Compare to other sectors, pharma companies still trades at good valuations. Growth is also not getting sustain in most of the companies due to US Market conditions and USFDA issues. Even, sunpharna in Q1 had posted an unexpected very big loss. However, on the other hand, few companies like Cipla have well managed to post good results in Q2.

Although, i would suggest to avoid pharma sector for some time and wait until the condition of pharma companies start improving.

Reliance Nippon AMC Listing

Reliance Nippon AMC on Monday saw a good listing on both exchanges. Till now, we have not seen any selling pressure on it despite of ongoing issues with Reliance Communication.

Mutual Fund in india has a great future in long-term. A large percentage of public is still not connected with any investment instrument. However, particularly in Reliance Nippon, there are few chances that we can see some profit booking in short-term. But for long-term, i think it would be a great choice to hold from ADAG.

HDFC Life IPO

HDFC Life is a next upcoming listing in our markets. HDFC Life has a wide presence over the country and is among the top insurance company in india. However, due to great size of IPO, i don’t think that we would see any overload subscribed number in it.

I think HDFC Life would probably give a consistent and good return in long-term. Maybe, we could also see a good listing of it. But as of now, i don’t think that we would see any great listing like with 10-15 premium.

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