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Last Updated : Feb 06, 2020 09:23 AM IST | Source: Moneycontrol.com

Market Headstart: Nifty likely to consolidate; investors await RBI MPC decision on rates

Trends on SGX Nifty indicate a negative opening in India, with a 21 points, or 0.18 percent, loss


Indian market is likely to consolidate on February 6 amid mixed trend seen in other Asian markets. Overnight, US market hit a fresh record peak following encouraging economic data, while investors keep a wary eye on the impact of the coronavirus outbreak.

Trends on SGX Nifty indicate a negative opening in India, with a 21 points, or 0.18 percent, loss. The Nifty futures were trading around 12,078-level on the Singaporean Exchange.

Let’s look at the final tally on D-Street on January 5 – the S&P BSE Sensex rose 353 points to 41,142 while the Nifty50 closed 109 points to close at 12,089.

Close

Sectorally, action was seen in metals, telecom, realty, and capital goods space, while profit taking was visible in power and consumer discretionary.

All eyes will be on the outcome of the monetary policy meeting (MPC) which will be out later today. Most experts feel that the committee might leave the rates unchanged, but the future commentary on rates and stance will be watched out for.

The growth has to walk has to play the balancing act of managing growth as well as inflation at the same time. The core CPI inflation rose to 3.75 percent in December 2019 compared with 3.50 percent in November same year.

The rupee pared initial gains to settle nearly flat at 71.24 (provisional) against the US dollar on Wednesday, as market participants await fresh cues from the RBI's monetary policy.

Foreign institutional investors (FIIs) bought shares worth Rs 248.94 crore, and domestic institutional investors (DIIs) purchased shares of worth Rs 262.75 crore in the Indian equity market on February 5, provisional data available on the NSE showed.

Big News:

As many as 78 companies on the BSE will declare their results for December quarter that include names like AB Fashion, Adani Power, Bata India, Dalmia Bharat, EID Parry, Hero MotoCorp, ICRA, IDFC Ltd, Lupin, Mphasis, NMDC, Sun Pharma, United Breweries, Uco Bank, and Trent Ltd.

Lupin: PAT likely to grow marginally on the YoY basis

Sun Pharma: PAT likely to grow by 11% YoY

Hero MotoCorp: PAT likely to fall by 7% YoY

United Breweries: PAT likely to fall by 6% YoY

(All estimates are from Motilal Oswal)

Technical View:

Nifty formed a Three White Soldiers kind of candlestick pattern hinting at a near-term trend reversal in favour of bulls

Nifty is staring at a 50-Days simple moving average at 12,117 which could led to some profit taking

Traders are advised to retain optimistic outlook as long as Nifty sustains above the recent bullish gap zone of 11783 – 11789 levels.

If Nifty manages to sustain above 12120 levels then the next target shall be placed around 12266 whereas initial sign of weakness shall emerge on a close below 11953 levels, suggest experts.

Three levels: 11953, 12098, 12117

Max Call OI: 12500, 12400

Max Put OI: 12000, 11500

Stocks in news:

Realty major DLF Ltd on Wednesday reported a 24 per cent increase in its consolidated net profit to Rs 414.01 crore for the quarter ended December. Its net profit stood at Rs 335.15 crore in the year-ago period.

Indiabulls Housing Finance Ltd (IBHFL) on Wednesday reported a 44 per cent decline in its consolidated net profit to Rs 546.87 crore in the third quarter ended December 31, due to a fall in income.

Hindustan Petroleum Corp Ltd (HPCL) on Wednesday reported trebling of net profit in December quarter as inventory gains made up for lower refinery margins.

Brokerage View:

HSBC On Shriram Trans
Maintain Buy Call, Target Raised To `1,500 From `1,450/Sh
Delivered A Strong Earnings Beat In Q3 On Stable Asset Quality
Growth Moderates On Lower Demand & Margin Largely Stable QoQ

Raise FY20-22 Earnings By An Average 5%

CLSA On HPCL
Sell Call, Target Cut To `210 From `240/Sh
Big PAT Miss As Refining & Marketing Margins Come In Lower
Building In Lower GRMs, Cut FY20-22 EPS Estimates By 9-12%

Spectre Of A Large Q4 Inventory Loss Near-term Worries

Technical Recommendations:

We spoke to Bonanza Portfolio and here’s what they have to recommend:

REC | Buy | LTP: Rs 151 | Target: Rs 164.50 | Stop loss: Rs 143.50 | Upside: 9%

United Breweries (UBL) | Buy | LTP: Rs 1,314.60 | Target: Rs 1,415 | Stop loss: Rs 1,260 | Upside: 8%

Oil India | Buy | LTP: Rs 129.80 | Target: Rs 141 | Stop loss: Rs 122 | Upside: 9%

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Feb 6, 2020 08:49 am
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