The Nifty range has been narrowing for the last three sessions but the index has gained for three straight days in a row and has been making higher highs and higher lows consistently on the charts as well. The market will resume trading on Thursday after a mid-week holiday.
Even as the Nifty traded in a narrow 80-point band on Tuesday, it made a new record high of 24,661 and the intraday low of 24,588 was also higher compared to Monday's low.
Earnings continue to remain the key driver for the market as reactions to those continue. Global cues have been benign, particularly in the US markets, with the rotation out of megacap tech stocks, which began last week, continued on Tuesday as well.
The Dow Jones hit a record high, the Nasdaq underperformed, while the Smallcap Russell 2000 index gained another 3% on Tuesday. Wall Street will be open for trading on Wednesday and hence, Indian equities will react to two days of data from the US markets.
With Tuesday's high, the Nifty is up nearly 3,500 points in just 29 trading sessions since June 4, which was the day the Lok Sabha election results were declared and the index had declined by 6%.
Thursday is also the weekly options expiry of the Nifty 50 contracts. Earnings reaction will also be seen in stocks like Asian Paints, Just Dial, LTIMindtree, Hathaway Cables, Elcon Engineering and others.
There are also a host of Nifty and broader market earnings scheduled to be reported on Thursday, including Infosys, Persistent Systems, Polycab, Havells India, JSW Steel, JSW Infra, Tata Technologies, Newgen Software, South Indian Bank, Rallis India, Swaraj Engines among others.
Foreign investors continued to remain net buyers in the cash market on Tuesday, while domestic institutions continued to book profits.
Nagaraj Shetti of HDFC Securities continues to maintain that the Nifty will touch levels of 24,900 in the coming week as there is no significant reversal pattern building at the record high levels. Immediate support on the downside is at 24,450.
24,665 will now be the immediate breakout for the bulls, above which, the Nifty can move towards levels of 24,775. On the flip side, a quick intraday fall may be seen if the Nifty sustains below 24,500. That fall can take the index lower to levels of 24,425, said Shrikant Chouhan of Kotak Securities.
Angel One's Osho Krishnan said that the current support zone for the Nifty is between 24,500 - 24,400, which may see the buyers step in if there is a dip towards that level. However, it is not entirely clear that the trend will sustain at higher levels. A sustained move above 24,610 can take the Nifty higher towards 24,700 - 24,750 levels.
It was yet another sluggish day for the Nifty Bank too as the index continued to underperform the Nifty. The banking index continues to find resistance above the mark of 52,500 and is struggling to sustain above it even after crossing it intraday for three sessions in a row, including Tuesday's weekly expiry session. Contrary to the Nifty, the Nifty Bank has been making lower highs on its charts.
The Nifty Bank is witnessing a possible accumulation phase as the index remains above the key support level of 52,000 and above the 20-Day Exponential Moving Average of 51,900. The trend will only weaken on a slip below 51,750, while a rise above 52,800 will indicate continuation of a bullish trend.
Hrishikesh Yedve of Asit C Mehta Investment Interrmediates said that the Nifty Bank is consolidating in a narrow band but is holding above the 21-Day Exponential Moving Average, which is near the 51,960 mark, while the recent swing low is near 51,750. He advises using a buy-on-dips strategy on the index till it holds above 51,750. On the upside, 52,800 and 53,000 are key support levels.
What Are The F&O Cues Indicating?
These stocks saw fresh long positions on Tuesday, meaning an increase in both price and Open Interest:
These stocks saw fresh short positions on Tuesday, meaning a decline in price and an increase in Open Interest:
StockPrice ChangeOI ChangeL&T Technology Services-3.95%19.76%Vedanta-1.17%8.60%CONCOR-0.81%8.39%L&T Finance-0.80%8.06%Dalmia Bharat-0.73%7.24%
Short covering was seen in these stocks on Tuesday, meaning an increase in price but a decline in Open Interest:
StockPrice ChangeOI ChangeIGL1.01%-8.51%Petronet LNG0.14%-7.91%Bandhan Bank1.26%-7.39%Indus Towers2.53%-6.69%Bharti Airtel1.72%-5.98%
Unwinding of long positions was seen in these stocks on Tuesday, meaning a decline in both price and Open Interest:
StockPrice ChangeOI ChangeONGC-0.20%-7.79%Max Financial-0.02%-7.24%Biocon-1.36%-5.94%SBI-0.25%-5.24%GMR Infra-1.25%-3.73%
These are the stocks to watch out for ahead of Thursday's trading session:
- Asian Paints: Net profit of ₹1,187 crore was below CNBC-TV18 poll of ₹1,401 crore. Revenue, EBITDA and margin also below estimates. On a year-on-year basis, EBITDA fell 20%, while margin narrowed by 420 basis points. Domestic decorative business volume growth of 7% with a revenue decline of 3%. Subdued demand environment due to general elections, heatwaves, impacted consumption. Revenue impacted due to price cuts implemented in previous quarter and a shift in product mix. Industrial business did better and grew by 5.8% in value. Expect demand conditions to improve in the near term on the back of improving rural sentiment and monsoons picking up gradually.
- LTIMindtree: US Dollar revenue at $1,096.2 million compared to estimate of $1,088 million. Net profit up 3.1% sequentially to ₹11,351 crore. EBIT up 4.8% quarter-on-quarter to ₹13,709 crore. To set up a wholly-owned subsidiary in Brazil with an initial investment of $1 million.
- L&T Finance: Disbursements up 21.5% year-on-year to ₹15,019 crore. AUM growth of 12.9% to ₹88,718 crore. Gross NPA at 3.14% from 3.15% last quarter. Net NPA flat at 0.79%. Net Interest Margin at 9.31% from 8.06% last year and 9.14% in March. Net Interest Income up 22.9% year-on-year to ₹2,020 crore. Net profit up 29.2% from last year to ₹686 crore.
- Zee Entertainment: To raise $239 million or ₹1,997 crore via issue of Foreign Currency Convertible Bonds. The FCCBs will have a tenor of 10 years with a coupon rate of 5%. The FCCBs will be issued to Resonance Opportunities Fund, St. John's Wood Fund Ltd. and Ebisu Global Opportunities, on terms and conditions mutually decided between the company and the 'proposed' investors. Proceeds from the FCCBs will be drawn in tranches and these bonds will be divided into 10 series.
- IREDA: Accorded in-principle approval for equity investment of up to 10% shareholding each in M/s GMR Upper Karnali Hydro Power Ltd., Nepal and M/s Karnali Transmission Company Pvt. Ltd., Nepal, in association with SJVN Ltd. for setting up a 900 MW Upper Karnali Hydro-electric power project in Nepal, subject to approval from Government of India. The total equity investment in both SPVs is nearly ₹290 crore.
- Glenmark Pharma: Gets final approval from the USFDA for Topiramate capsules USP, 15 mg and 25 mg. These capsules are used in the treatment of Epilepsy and are also known as anti-epileptic medicines. The capsules had annual sales of nearly $21.9 million in the US market as of the IQVIA data ending May 2024.
- Techno Electric & Engineering: In confirmation of a CNBC-TV18 newsbreak, company launches QIP to raise funds. Floor price set at ₹1,506.58 per share, which is a 2.44% premium to Tuesday's closing price.
- Adani Green Energy: Operational Capacity up 31% year-on-year to 10,934 MW. Sale of energy up 22% year-on-year to 7,356 million units. Solar Portfolio at 25.4% backed by 99.4% plant availability.
- Network18: Consolidated revenue down 3% to ₹3,141 crore from ₹3,239 crore last year. Consolidated operating EBITDA loss at ₹148 crore from loss of ₹84 crore last year.
- TV18: Consolidated revenue down 3% to ₹3,069 crore from ₹3,176 crore last year. Operating EBITDA loss at ₹109 crore. TV News EBITDA at ₹40 crore from EBITDA loss of ₹6 crore last year. Entertainment business EBITDA loss of ₹149 crore from loss of ₹49 crore last year.
- ONGC: Begins production from Coal Bed Methane block in Bokaro The initial production of 1,70,000 SCMD is expected to ramp up to 3,00,000 SCMD by the end of the current financial year.
- Bajaj Electricals: Anuj Poddar to resign as MD & CEO from September 30, 2024 to explore an external opportunity.
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