Closing Bell: Nifty ends above 17,900, Sensex gains 600 pts led by IT, FMCG, metals

Taking Stock | Market snaps 2-day losing streak, Sensex up 600 points; Nifty above 17,900

Among sectors, power and realty were down a percent each and IT, FMCG and metals rose a percent each... Read More

Markets recovered strongly on Tuesday and gained nearly a percent. Initially, upbeat global cues triggered a firm start which further strengthened with buying in select heavyweights as the day progressed. Consequently, Nifty surpassed the hurdle at 17,900 and finally settled around the day’s high.

Meanwhile, a mixed trend was witnessed on the sectoral front wherein metal, FMCG, IT and banking posted decent gains while realty, auto and healthcare ended lower.

Indications are favorable for further recovery and we’re now eyeing 18,200 in Nifty. However, the move could be gradual citing restricted participation by select index heavyweights. Traders should align their positions accordingly and prefer index majors over others.

After a positive start, the Nifty gradually inched higher as the day progressed. Buying aggression is witnessed after crossing the intraday resistance around 17,880 levels. The Benchmark Index closed above its previous 9 sessions high at 17,929 with a gain of 0.89 % and witnessed a consolidation breakout. Prices have whipsawed its bearish engulfing candle stick pattern and have closed above the same.

The open interest (OI) has shown a sharp rise in 17,800 Put OI, suggesting strong commitment by bulls with a reduction at 18,000 Calls. The major hurdle for bulls will be faced near 18,000 – 18050 levels. If prices break above the said levels, then we will be witnessing a breakout in Nifty. Similarly, the closest support for the Nifty is placed near 17,800 – 17,650, and if prices breach below these levels, then 17,500 will be on the cards.

The Nifty opened on a positive note and continued to inch higher throughout the day to close around the highs for the day. It closed with gains of ~159 points. On the daily charts we can observe that the Nifty has managed to close above the immediate hurdle zone of 17,850 – 17,900 which takes the bulls in a position of advantage.

The hourly Bollinger bands have begun to expand indicating expansion in volatility and with prices trading along the upper band suggests that the positive momentum is likely to continue.

The daily momentum indicator has a positive crossover which is a buy signal. Thus both price and momentum indicator is suggesting further upside in the Index. On the upside, we expect the Nifty to test the upper end (18,100) of the downward sloping channel from short term perspective.

Domestic indices edged higher, inspired by their global counterparts, as investors await the US inflation numbers today. The whammy over India’s retail inflation breaching the RBI’s tolerance level was cooled by WPI inflation easing to 4.73% in January. IT stocks were in focus as investors anticipated a slowdown in US inflation, which could result in favourable Fed policy.

The Indian rupee in line with other Asian currencies gained amid lower crude oil prices and recovery in the domestic equities backed by foreign fund inflows. However, traders remained cautious ahead of crucial US inflation figures. Risk appetite in risk-asset was partly helped by a Federal Reserve survey showing US wage growth expectations slipped in January.

In the near term, spot USDINR has resistance at 82.90 and support at 82.40. We expect the pair could consolidate between 82.90 to 82.40 before heading north.

Indian rupee closed marginally lower at 82.76 per dollar against previous close of 82.72.

: Benchmark indices ended higher on February 14 with Nifty above 17,900.

At Close, the Sensex was up 600.42 points or 0.99% at 61,032.26, and the Nifty was up 158.90 points or 0.89% at 17,929.80. About 1252 shares have advanced, 2158 shares declined, and 114 shares are unchanged.

UPL, ITC, Reliance Industries, Adani Ports and Adani Enterprises were among the biggest gainers on the Nifty, while losers were Eicher Motors, Apollo Hospitals, SBI Life Insurance, Grasim Industries and BPCL.

Among sectors, power and realty down 1 percent each, while IT, FMCG, metal rose 1 percent each.

BSE midcap index shed 0.4 percent and smallcap index fell 0.6 percent.

-Equal-weight rating, target cut to Rs 1,350 per share
-Major expansion of labs & collection centres is underway
-Should transform metropolis into a Pan-India player over time
-Expansion of labs provides longer-term growth visibility
-Focus remains on specialised tests

Metropolis Healthcare was quoting at Rs 1,328.75, up Rs 16.45, or 1.25 percent on the BSE.

-Buy rating, target raised to Rs 633 per share
-All segments grew ahead of estimates
-Cash flow remains a concern, limiting expansion in valuation multiple
-Management expects US sales to grow by mid-single digit in FY24 and brand divestments in India to sharpen focus on key brands
-Management expects maintained revenue growth & EBITDA margin guidance for FY23

Glenmark Pharma was quoting at Rs 429.75, up Rs 6.95, or 1.64 percent.

Gold inched higher but hovering around seven week lows, as the dollar holds ground near it's one week high and as investors brace themselves for US inflation data to gauge its influence on the Federal Reserve’s policy path. The data is expected to show that while inflation eased further in January from the prior month, it is still expected to remain near higher levels from the Fed target zone. This trend could potentially give the Fed enough impetus to maintain its hawkish rhetoric.

A spike in short-term Treasury yields also pressured bullion prices in recent sessions, as did a recovery in the dollar. Fed official Bowman mentioned in his speech that the US central bank will need to continue to raise rates in order to get them to a level high enough to bring Inflation down to the central banks target rate.

Along with US CPI, focus will also be on the EU GDP data. Broader trend on COMEX could be in the range of USD 1825- 1870 and on domestic front prices could hover in the range of Rs 56,250 – 56,900 could be expected.

-Buy rating, target at Rs 2,520 per share
-Q3 EBITDA In-line with expectations as margin surprised with the execution pick-up
-Management highlighted margin traction will continue as lower commodity price impact reflects
-Base orders rise, but larger orders will take a few quarter to pick-up as refinery & FGD have slowed

Thermax was quoting at Rs 2,141.35, up Rs 1.65, or 0.08 percent.