NIACL, IFCI shares tumble after recent gains amid NSE IPO buzz; check technical outlook

Shares of The New India Assurance Company Ltd (NIACL) and IFCI Ltd fell sharply in Tuesday's trade, with both stocks coming under pressure after strong gains in recent weeks.

NIACL shares were down 10.96 per cent at Rs 205.85 at the last check. Despite Tuesday's decline, the stock has gained 14.78 per cent over the past month and 52.82 per cent in the last six months.

IFCI shares were trading 6.82 per cent lower at Rs 95.62. The stock, however, has risen 25.73 per cent in the past month and 83.81 per cent over the six-month period.

Both stocks have gained recently amid market focus on their exposure to the National Stock Exchange (NSE) and its proposed initial public offering (IPO).

NIACL holds a direct 1.42 per cent stake in NSE. IFCI has an indirect exposure through its 52 per cent holding in Stock Holding Corporation of India Ltd (SHCIL), which owns around 4.4 per cent in NSE.

NSE, the operator of the world's busiest derivatives market by trading volume, received Sebi approval earlier this month for its IPO. The issue is expected to hit the market in the latter part of September.

IFCI share price: Technical view

Osho Krishan, Chief Manager – Technical & Derivative Research at Angel One, said IFCI had witnessed strong momentum recently and broken out above the Rs 85-88 zone to hit fresh lifetime highs.

"In the recent period, the counter is showcasing some kind of breather from the higher zone and is expected to have its cushion around the breakout neckline, which is placed around the zone of Rs 85. The overall trend remains bullish, with sideways to positive momentum likely to persist in the counter. On the higher end, the Rs 102-105 range is likely to provide some kind of resistance in the near-term period," he said.

Jigar S Patel, Senior Manager – Technical Research at Anand Rathi, said support for IFCI is placed at Rs 86, while resistance is seen near Rs 101.

"A decisive move above Rs 101 could trigger further upside towards Rs 105. The stock is expected to trade within the Rs 86-105 range in the short term," Patel said.

NIACL share price: Technical view

On NIACL, Krishan said the stock had moved above its short-term moving average on strong volumes in the previous week. He added that the counter was currently seeing some breather and profit booking from higher levels, while the overall technical structure remained bullish.

"For now, the support lies around the zone of Rs 190 to Rs 185, while on the higher end the Rs 225 to Rs 230 range is likely to provide resistance in the short-term period for the counter," he said.

Patel said support for NIACL is placed at Rs 195, while resistance is seen near Rs 220.

"A decisive move above Rs 220 could trigger further upside towards Rs 240. The stock is expected to trade within the Rs 190-240 range in the short term," he said.