Closing Bell: Market ends with marginal gains; IT drags, financials shine

Taking Stock: Market ends flat amid volatility; IT stocks worst hit, realty gains

For the week, Sensex and Nifty rose 1 percent each. The market will remain closed on April 14 on account of Ambedkar Jayanti.... Read More

Markets traded volatile in a range and ended almost unchanged, taking a breather after the recent surge. After the flat start, pressure in the IT majors pushed the Nifty lower however buying in select heavyweights especially from the banking pack trimmed all the losses and helped index to close flat. Apart from banking, realty and auto pack also performed well while IT, pharma and energy traded subdued.

Markets will react to results of two heavy weights viz. Infosys and HDFC Bank in early trades on Monday. Indications are in favor of the prevailing tone to continue, so intermediate dips should be considered as a buying opportunity. We reiterate our preference for banking, financials and FMCG pack and recommend picking selectively from others.

The Nifty continued with positive momentum and closed with gains for the ninth consecutive trading session. On the charts we can observe that the Nifty witnessed an intraday dip however the zone of 17750 – 17720 where support in the form of the 20-hour moving average was placed absorbed the selling pressure and restricted further slide.

On a weekly basis the Nifty has managed to close above the 20-week moving average (17789) which is a Bullish sign. The weekly momentum indicator has triggered a fresh positive crossover which is a buy signal.

On a higher time, frame chart structure has turned in favour of bulls. Considering the sharp run up in the previous nine trading sessions a consolidation is highly probable however, it should be considered as a buying opportunity. In terms of levels, 17860 – 17900 is the immediate hurdle one, while 17730 – 17700 shall act as a crucial support from short term perspective. On the upside we expect the Nifty to target levels of 18000.

Rupee traded positive with strong gains of 0.30% at 81.85 on back of weakness from dollar and FII's positive momentum in Indian markets helping rupee strengthen.

CPI in US came lower than expectation at 5.0% and CPI in India came at 5.66% again lower than expected lines thus helping rupee on broad bases, as interest rate cycle hike will be seen with dovish points according to data specific approach. Rupee going ahead can be seen in the range of 81.50-82.10.

Benchmark indices maintained their winning streak, but the sharp intra-day gyration shows that the rally could be losing steam given the continuous upward movement over the past week or so. The market seems to be in an overbought zone and profit-taking could emerge in the next few sessions. Technically, the market is trading above 50 and 200-day SMA (Simple Moving Average) and on intraday charts it is holding a higher bottom formation which is largely positive.

However, momentum indicators are indicating temporary overbought conditions and due to this we could see range bound activity in the near future. For the bulls now, 17,700-17,600 would be the key support areas while 17,900-18,000 would act as a crucial resistance zone for the traders.

Meanwhile, positive sentiment is likely to continue in Bank Nifty, and for the trend following traders now 41,500 would be the sacrosanct support zone. Above which, it could move up till 42,500-42,700. On the flip side, below 41,500, the uptrend would be vulnerable.

The fight between bulls and bears ended in favour of the bulls as Nifty ended the session about 100 points off the day's low. The benchmark Nifty has posted a winning streak for the ninth consecutive trading session.

The critical moving averages are sitting comfortably below the current index value. The trend is likely to remain positive as long as it stays above 17,700. On the higher end, 18,000 will likely act as crucial resistance.

Indian shares experienced a downturn, weighed down by IT stocks following weak quarterly earnings and a cautious outlook from the top IT firm, which flagged apprehensions over deferred spending and uncertainty in its BFSI segment. The decrease in CPI inflation to 5.66 percentin India, coupled with the moderation of core inflation, supports the decision of the MPC to keep policy rates on hold. While US inflation cooled to 5 percent, anxieties grew globally after the FOMC minutes hinted at a possible "mild recession" due to the impact of banking turmoil.

Indian rupee ended 23 paise higher at 81.85 per dollar against previous close of 82.08.

: Indian benchmark indices ended marginally higher in the highly volatile market.

At close, the Sensex was up 38.23 points or 0.06 percentat 60,431.00, and the Nifty was up 15.60 points or 0.09percentat 17,828. About 1,871 shares advanced, 1,526 shares declined, and 117 shares were unchanged.

Top gainers on the Nifty were IndusInd Bank, HDFC Life, Eicher Motors, Apollo Hospitals and Power Grid Corp, while losers included Infosys, HCL Technologies, Tech Mahindra, NTPC and TCS.

On the sectoral front, Information Technology index shed 2 percent, while capital goods, pharma and oil & gas indices down 0.5 percent each. On the other hand, PSU Bank and Realty indices rose 1 percent each.

The BSE smallcap index was up 0.33 percent and midcap index added 0.16 percent.

Change in taxation led to encouraging flows in the fixed income category in the last week of March. Investors continue to believe in the long term growth story and continue to add investments through SIPs and lumpsum.

Net inflows into equity funds has continued to show a strong uptrend in March with net inflows of Rs20,534 crores which is higher by about 30% compared to February 2023. The SIP amount has also hit an all-time high of Rs14,276 crores in March. This reinforces our belief that domestic investors continue to have a high level of confidence in the Indian growth story and also in mutual funds as an effective vehicle for wealth creation.

From a low of about Rs2250 crores in November, the net inflows into equity funds have been steadily increasing every month, which augurs well for the future of the equity markets.

On the fixed income side, there was unusual interest towards the end of March to invest in bond funds, mainly thanks to the change in taxation from 1st April. However, given the relatively higher yield levels and the possibility of interest rate hikes nearing the end of the cycle, there could be sustained interest in fixed income funds for some more time.

Jefferies has given TCS a “hold” rating with a target price of Rs 3,375 per share TCS's Q4FY23 results missed estimates and there is rising caution among clients across several verticals in Europe and North America. The book-to-bill ratio is at a three-year low and headcount additions are subdued, which point to a slowdown.

Jefferies has cut its estimates for TCS by 2-3 percent but expects the company to deliver 6.7 percent CAGR in constant currency revenue and 10 percent EPS CAGR. TCS's premium valuations, however, are limiting the upside, it said.

Tata Consultancy Services was quoting at Rs 3,189.80, down Rs 52.30, or 1.61 percent on the BSE.