Closing Bell: Market ends with marginal gains; PSU Bank, power shine

The Nifty opened on a flat note and witnessed a day of consolidation. It closed in the green up ~26 points. On the daily charts, we can observe that the positive momentum from April, 24 continued today as well and the Nifty continued to trade with a positive bias. As it is approaching its previous swing high of 17,863 it is witnessing some profit booking as the speed of upmove has reduced.

As we are in the final week of the April series expiry volatility can be high for the next couple of trading sessions. So, the crucial support zone to keep a watch is 17,620 – 17,600. Until the Nifty manages to hold and trade above this zone, we can expect the upmove to continue. On the upside, the initial hurdle stands at 17,863 – 17,880. A break above that shall lead to a sharp rise towards the 18,000 psychological mark.

Overall, we shall continue to maintain our positive stance from a short-term perspective for the target of 18,100.

Markets consolidated in a narrow range and ended almost unchanged amid mixed cues. After the flat start, Nifty tried to inch higher however profit taking around the 17,800 zone capped the upside. Most sectors traded in sync and ended flat but continued buying in PSU banking combined with a recovery in select energy, metal and realty counters kept the traders busy. Meanwhile, the broader indices also traded mixed, however buoyancy in smallcap space helped market breadth to stay on the advancing side.

We reiterate our positive view on Nifty and suggest continuing with “buy on dips” till 17,500 is intact. However, participants shouldn’t go overboard and maintain their focus on sector/stock selection citing restricted participation so far.

Cautious optimism prevailed as sluggish to negative global markets' sentiment prompted traders to take selective bets in metals, oil & gas, and financial stocks.

The bigger concern is that the rate hike cycle in the US and European nations is likely to continue, which may further push key economies into a slowdown phase and hurt growth.

On daily charts, the Nifty has formed a small Doji candlestick formation which indicates indecisiveness between the bulls and bears. A minor intraday correction is possible, if the index slips below 17,720 and retests the level of 17,670-17,625.

On the flip side, a fresh uptrend wave is possible only after the dismissal of 17,820. Post breakout the chances of the index hitting 17,900-17,925 would turn bright.

The domestic market succeeded in holding the gains, though multiple attempts were made by bears to reverse the trend considering the weak global market.

Investors are highly nervous as they await the release of US GDP and PCE inflation data, which will guide the upcoming Fed action. The Fed is expected to raise its rates by another 25 basis points in its announcement on 3rd May.

Indian rupee closed flat at 81.91 per dollar against previous close of 81.91.

: Benchmark indices ended on a positive note in a volatile session on April 25.

Bajaj Finance, Adani Enterprises, Britannia Industries, Bajaj Finserv and IndusInd Bank were among the major gainers on the Nifty, while losers included HDFC Life, UPL, HDFC Bank, HDFC and Tech Mahindra.

Among sectors, power and PSU Bank indices were up 1 percent each, while metal, infra, oil & gas and realty gained0.5percenteach.

The BSE midcap and smallcap indices ended on a flat note.

The initial public offering of Mankind Pharma has garnered bids for 0.17 crore equity shares against an IPO size of 2.8 crore shares, subscribing 6 percent on April 25, the first day of bidding.

The offer size has been reduced to 2.8 crore equity shares, from over 4 crore shares after the company mobilised Rs 1,298 crore via anchor book, the part of qualified institutional buyers (QIBs), on April 24.

Retail investors with over 35 percent reservation in the IPO bid for 7 percent shares of the allotted quota.

High net-worth individuals (HNIs) have bought 8.08 lakh shares against the reservation of 60 lakh shares, while QIBs bid for 1,560 shares so far.

The research house has kept an overweight rating on the stock with a target price of Rs 1,525 per share. The bank's core pre-provision operating profit (PPoP) rose 20 percentyear-over-year, helped by a stable margin despite higher rates.

Credit costs moderated quarter-over-quarter to 146 basis points. However, elevated gross slippages were slightly negative.

The retail deposits per liquidity coverage ratio (LCR) rose 4percentquarter-over-quarter and 19percentyear-over-year. However, negatives were further moderation in the savings account (SA) ratio.

IndusInd Bank was quoting at Rs 1,122.00, up Rs 19.95, or 1.81 percent on the BSE.

While any form of fiscal or tax incentive for homebuying is a welcome move, particularly the stamp duty incentive in large markets like Mumbai and Pune had served as a crucial catalyst even during the peak pandemic period of 2020 and 2021. The market not just recovered from the ebbs of the pandemic, but also charted a long-term growth path afterwards ensuring that the state exchequer emerged as the biggest beneficiary with increased revenue collections.

A strong market typically does not need an incentive for this order and housing markets like Mumbai have demonstrated strong sales volume in the last two years. However, the headwinds in the form of a significant 200 – 250 basis point increase in home loan interest rate over the last year have shrunk the house purchase affordability of a typical homebuyer by close to 15 percent.

For instance, compared to the ability to purchase a Rs 1 crore home a year ago, the increase in mortgage rate has shrunk it to around Rs 85 lakh thereby serving a considerable headwind alongside the double whammy of increased construction and living cost. Hence, even though the homebuyer sentiment remains intact her ability to purchase that dream home has taken a hit.

A helping hand from the state government in the form of a limited-period stamp duty cut will not just temporarily improve this ability but also boost consumer sentiment and reinvigorate the housing market.

-Equal-weight rating, target at Rs 1,145 per share
-Pre-sales momentum, new project acquisition & deleveraging remain key objectives
-Demand outlook for residential in Mumbai remains healthy
-Demand outlook drives strong FY24 guidance for pre-sales & new project acquisition

-Overweight rating, target at Rs 1,170 per share
-Near-term headwinds are getting worse
-Mohali supplies are now temporarily halted
-Recently, business has been affected by Halol import alert, IT issues & concert cash burn
-Beyond near-term challenges, comapny has a good pipeline of launches

Sun Pharmaceutical Industries was quoting at Rs 972.15, down Rs 7.10, or 0.73 percent on the BSE.

-Neutral rating, target at Rs 9,928 per share
-Announces prices for its first coupe crossover, Fronx SUV
-Fronx priced at a premium to Baleno
-Recent dealer surveys suggest a 2.5-3 months waiting period for the model
Currently factor in 8,000 units/month for Fronx in FY24, which could have some risk

Maruti Suzuki India was quoting at Rs 8,488.20, up Rs 25.10, or 0.30 percent.