Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Bulls on Dalal Street kept the momentum going as Sensex zoomed past the psychological 60,000-mark and Nifty inched towards 18000 level on the back of softening inflation and strong FII buying in the current month. While global factors remain hazy, India is seen as a bright spot in today's challenging times.
Technically, the market is consistently forming higher high and higher low series formation, indicating continuation of an uptrend in the near future.
The Nifty has also formed a bullish candle on daily charts that also supports the uptrend. However, a quick intraday correction is not ruled out if the index trades below 17850, and below the same it could touch 17700-17680 levels. On the flip side, above 17850 the first upside target for the index would be 18000 and on further upsurge it could move up to 18175.
Santosh Meena, Head of Research, Swastika Investmart:
Nifty is continuing its northward journey thanks to continuous buying by FIIs and the cool-off in crude oil prices, however there is a risk of some profit booking after a 7-day winning streak as Nifty is approaching the psychological level of 18000.
On the downside, 17700 will be the immediate support level while 17500-17400 is a strong demand zone at any pullback.
PSU Banks and IT stocks helped Nifty today to move above the 17900 mark, however some profit booking was seen in auto names. HDFC twins recouped all initial losses that led to a recovery in Bank Nifty from lower levels.
Bank Nifty is consolidating near 39500 level where we can expect some profit booking towards 38700-38400, zone while if it sustains above 39500 level then we can expect a move towards 40000 level.
S. Hariharan, Head- Sales Trading, Emkay Global Financial Services:
India has been an outperformer over the last 45 days relative to both EM and DM peers, gaining for cooling inflation expectations as a commodity importer as well as reducing equity risk premia, as a growth market. FII flows over the last 45 days have totalled $1.5 bn, more than double the inflows from domestic institutions.
Domestic retail investors have not participated in the recent rally as evidenced in their single stock futures net long position having contracted to $8.5 bn – for perspective, when Nifty was at 18000 in early April, Retail net long in stock futures was at $12 bn.
This suggests that there may still be further room for participation as well as dry powder to cushion any falls caused by global macro factors. Banks, Industrials and Autos have been the leaders and continue to attract incremental flows. While Metals names have seen some short covering, weakening global growth impulses would act as headwind to any meaningful upward revisions to earnings estimates. IT appears most vulnerable in this environment, due to its leverage to US & EU growth.
Rupak De, Senior Technical Analyst at LKP Securities:
Nifty has remained above the falling trend line, confirming the continuation of the ongoing bull run. The up trend remains intact as the barometer index has not shown any weakness.
The popular momentum oscillator is in a deep overbought zone but has no bearish crossover, suggesting a continuation of bullish momentum. On the higher end, resistance is seen at 18000-18100. On the lower end, support is visible at 17700.
Ajit Mishra, VP - Research, Religare Broking:
Markets extended up move for yet another session and gained over half a percent. After the flat start, the benchmark gradually inched higher as the day progressed however marginal profit taking in the final trades trimmed some gains. Eventually, the Nifty ended higher by 0.7% at 17,944 levels. Meanwhile, mostly sectoral indices ended higher.
The buoyancy in the global markets, especially the US, combined with favorable domestic factors viz. improving macros, consistent foreign flows, etc. are helping the markets to maintain the prevailing trend.
We thus reiterate our bullish view and suggest using any intermediate dip or pause to create fresh longs. The scheduled weekly expiry may result in some whipsaws so plan accordingly.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities:
Nifty has staged a strong recovery in the past few weeks. This move has pushed the markets out of the consolidative/corrective phase it was in since past few months. Any correction in the near term should be used for buying for the medium term uptrend.
An extended phase of consolidation is possible before the index attempts to move towards the 18600 mark. IT stocks remain strong while Metals continue to consolidate. Value is seen in select midcap stocks.
Vinod Nair, Head of Research at Geojit Financial Services.
Consistent participation by FIIs is the backbone of the current rally in the domestic market. This reversal in the FII trend is owed to the resilience showcased by the Indian economy even as inflation continues to plague the western markets.
Declining commodity and oil prices also instilled confidence in foreign investors. Western markets were weak ahead of the release of the US FOMC meeting minutes.
Market Close:
Benchmark indices ended higher on August 17 with Nifty closing above 17,900 led by PSU bank, power and Information Technology stocks.
At Close, the Sensex was up 417.92 points or 0.70% at 60,260.13, and the Nifty was up 119 points or 0.67% at 17,944.30. About 1941 shares have advanced, 1401 shares declined, and 119 shares are unchanged.
Bajaj Finserv, Hero MotoCorp, HDFC Life, Bajaj Finance and Bharti Airtel were among the major Nifty gainers.
The losers included M&M, Apollo Hospitals, Tata Motors, Cipla and UltraTech Cement.
Except auto, all other sectoral indices ended in the green with PSU Bank and Information Technology up 1-2 percent.
BSE midcap and smallcap indices added 0.5 percent each.
Rupee Close:
Indian rupee ended higher by 21 paise at 79.44 per dollar against Friday's close of 79.65.
Morgan Stanley View On Torrent Power
Morgan Stanley has kept equal-weight rating on Torrent Power with a target at Rs 533 per share.
Most of its portfolio is contracted with strong counterparties like SECI & NTPC.
As per reports, the company in a fray to buy 700 MW RE capacity from vector green, reported CNBC-TV18.
Torrent Power was quoting at Rs 581.30, up Rs 0.55, or 0.09 percent.
Morgan Stanley View On Sobha
Morgan Stanley has kept overweight rating on Sobha and cut the target to Rs 1,024 from Rs 1,095 per share.
Brokerage firm reduced its FY23-F24 EPS estimates by 8% each and reduced NAV estimates by 6% which reflects MTM project level price & cost changes.
The company is a beneficiary of a new residential demand upcycle. And like it for steadily improving balance sheet & reasonable relative valuation.
The higher new launches could increase the pace of presales, reported CNBC-TV18.
Sobha was quoting at Rs 717.10, up Rs 7.20, or 1.01 percent on the BSE.
Market at 3 PM
Benchmark indices extended the gains and trading at day's high with Nifty around 17950.
The Sensex was up 460.86 points or 0.77% at 60303.07, and the Nifty was up 132.90 points or 0.75% at 17958.20. About 1907 shares have advanced, 1277 shares declined, and 106 shares are unchanged.
Investec View On Railtel Corporation of India
Investec has maintained hold call on the Railtel Corporation of India and cut the target price to Rs 110 from Rs 144 per share.
The company has disappointed on growth & margin since its listing. The higher RoCE projects business expected to drive growth, has underperformed.
The telecom business performed relatively better with 18% YoY growth in FY22.
Broking house cut its FY23/FY24 EPS estimates by 46.7%/25.6%, reported CNBC-TV18.
Railtel Corporation of India was quoting at Rs 97.75, down Rs 2.05, or 2.05 percent.
Jaideep Hansraj, MD & CEO Kotak securities:
Today’s rescaling of the 60000 peaks is a sign of the strength of retail investors in India. It shows the belief of the investors in the India growth story and is another reminder to all of us to be optimistic about India inc.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
:
Crude oil prices traded lower with benchmark NYMEX WTI crude oil prices were trading 0.30% down near $86.25 per barrel on Wednesday. Crude oil prices fell to a six-month low after a brief respite as concerns about the prospect of a global recession that would weaken demand overshadowed a report showing lower US crude and gasoline stocks.
We expect crude oil prices to trade sideways to down with resistance at $89 per barrel with support at $85 per barrel. MCX Crude oil August contract has important support at Rs 6750 and resistance at Rs 6980 per barrel.
European Markets Updates
Devang Mehta, Head- Equity Advisory, Centrum Wealth on Sensex at 60,000
:
Markets are just 3- 4 percent off their life time highs. I think, clearly the sentiment along with liquidity & macro plus micro fundamentals are supportive for a long term rally but yes it will have its share of speed breakers & volatility. Clearly the day when US inflation came in at 9.1 percent, a lot more than expectations, markets factored in an aggressive rate hike and moved forward. While inflation & interest rates can still come & haunt the economies & markets, but a confluence of factors including low valuations be it P/E, P/BV, Mcap to GDP, oversold markets, the fall in commodity prices etc helped markets to move northwards. Add to it, crude from130 to 93, is a huge tailwind for our own economy & hence markets. The return of Foreign institutional investors, credit growth in mid teens for the banking sector, decent monsoon, commentary on impending capex & above all the first quarter earnings season, which did not disappoint the street, were catalysts for this up move. With festive season in India for the next few months, revenge shopping, eating out & revenge travel, a lot of consumption oriented sectors would find favour t & with credit growth and capex coming back, BFSI would also be a beneficiary.
Market update at 2 PM: Sensex is up 332.77 points or 0.56% at 60174.98, and the Nifty up 97.10 points or 0.54% at 17922.40.
Energy Prices Update:
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
Sensex hits 60k level after 4 month period led by consumption related stocks & sectors. From the macro factors, crude oil prices helped our markets to revive from lower levels.
At one point Sensex was about to break the psychological level of 50k but the confidence in the domestic economy from the retail investors, domestic institutions and fund manager managers helped the markets to stay above it. The market is not far from crossing the levels all time highest levels.
India
Ratings and Research (Ind-Ra) has upgraded IRB Infrastructure Developers Limited’s (IRB) Rating to ‘IND AA-’ from ‘IND A+’. The Outlook is Stable.IRB Infrastructure Developers was quoting at Rs 258.15, down Rs 0.60, or 0.23 percent on the BSE.
Geojit on Tata Chemicals
Tata Chemicals has been reporting solid performance consistently despite a challenging environment. We remain optimistic about continued soda ash demand across geographies, which will boost the topline.
The ongoing global soda ash shortage will further improve realisations through heightened pricing. The management expects the positive momentum to continue in the near to short term and aims to leverage digitalisation for further growth. Hence, we reiterate our BUY rating on the stock, with a revised target price of Rs 1,340 using a target multiple of 20x P/E on FY24E adj. EPS.
Tata Chemicals was quoting at Rs 1,118.55, down Rs 4.10, or 0.37 percent.
JUST IN | UK July CPI Inflation at 10.1% YoY against estimates of 9.8%
Nifty PSU Bank index rose over 1 percent supported by the Bank of Baroda, Canara Bank, Indian Bank
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
The ferocity of this rally has proved wrong the majority of experts who believed that this is a bear market rally. It appears that the market may remain resilient. There is global support to this rally since Nasdaq and S&P 500 have rebounded by 24% and 18% from the June lows.
Nifty too has rebounded 18% from the June lows. The decline in inflation has increased the possibility of a soft landing for the US economy. In India, the decline in inflation, declining crude, strong growth momentum, good monsoon and above all FIIs turning consistent buyers have turned the sentiments in favour of the bulls. However, high valuation is a concern.
Market at 1 PM
Benchmark indices are trading at day's high with Nifty around 17950.
The Sensex was up 390.41 points or 0.65% at 60232.62, and the Nifty was up 114.70 points or 0.64% at 17940. About 1930 shares have advanced, 1202 shares declined, and 109 shares are unchanged.
Nifty FMCG index added 0.5 percent led by the HUL, Tata Consumer, ITC
Kush Ghodasara, CMT
Today we saw a 60000 mark on Sensex and the sentiments around the streets are of new life high soon but technically we have seen 5 weeks of rally and we are near strong resistance of 60500. So I believe we have a profit booking on cards before reaching out new highs as indicators are weakening.
BSE Smallcap index gained 0.6 percent led by the Rossell India, S Chand and Company and Nava
Sharekhan View on Zee Entertainment Enterprises:
Zee Entertainment Enterprises has been progressing well on digital business with launching new shows each quarter. We believe the proposed merger would be a strategic fit from a revenue perspective and would help the combined entity to emerge as a strong player in the entertainment industry for capturing the significant opportunity in the linear business.
Further, the merged entity would allocate its growth capital towards premium content, including sports event rights, which would strengthen its position in the OTT space.
We expect the company to deliver a 14% CAGR in adjusted net profit over FY2022-FY2024E.
Given its strong regional presence and strong traction on its digital platform, we maintain Buy rating on ZEEL with a revised Price Target of Rs 310 (reflecting a cut in earnings estimates).
Market at 12 PM
Indian benchmark indices were trading near the day's higher with Nifty above 17900.
The Sensex was up 341.85 points or 0.57% at 60184.06, and the Nifty was up 103.30 points or 0.58% at 17928.60. About 1921 shares have advanced, 1166 shares declined, and 114 shares are unchanged.
BSE Midcap index rose 0.6 percent supported by the ICICI Securities, Zee Entertainment, Adani Power
UPL & Oro Agri sign agreement for development of Orange Oil
UPL announced a new collaboration with Oro Agri, a Rovensa company, for the co-distribution and further development of Orange Oil, a biosolution effective against a wide range of pests and diseases.
UPL was quoting at Rs 789.45, up Rs 1.00, or 0.13 percent on the BSE.
Motilal Oswal View on Apollo Tyres
Among its tyre peers, Apollo Tyres offers the best blend of earnings growth and cheap valuations. The stock trades at 15.4x/10.9x FY23E/FY24E consolidated EPS.
Maintain BUY with a Target Price of Rs 310 (based on ~12x Sep’24E consolidated EPS).
Bharti Airtel pays Rs 8312.4 crore for 5G spectrum to DOT
Bharti Airtel has paid Rs 8312.4 crore to the Department of Telecom (Government of India) towards dues for spectrum acquired in the recently concluded 5G auctions.
Airtel has paid 4 years of 2022 spectrum dues upfront. The company believes that this upfront payment coupled with the moratorium on spectrum dues and AGR related payments for four years will free up future cash flows and allow Airtel to dedicate resourcesto single-mindedly concentrate on the 5G roll out.
Over last one year, Airtel has also cleared Rs 24,333.7 crores of its deferred spectrum liabilities much ahead of scheduled maturities.
Goldman sees India bonds getting added to JPMorgan index in 2023
Indian government bonds may be added to a global index next year, triggering passive inflows of about $30 billion that will help the country to finance its current account and fiscal deficits, according to Goldman Sachs Group Inc.
The nation’s sovereign bonds may be added to JPMorgan’s GBI-EM Global Diversified bond index with an initial 10% weightage, analysts Danny Suwanapruti and Santanu Sengupta wrote in a note to clients. India’s $1 trillion sovereign bond market is one of the biggest among emerging markets not to be part of any global index.
Market update at 11 AM: Sensex is up 332.21 points or 0.56% at 60174.42, and the Nifty added 98.40 points or 0.55% at 17923.70.
Motilal Oswal View on Maruti Suzuki
Strong demand and favorable product lifecycle for Maruti Suzuki India augurs well for market share and margin. We expect a recovery in both market share and margin in 2HFY23, led by an improvement in supplies and mix, a favorable product lifecycle, RM and forex benefits, and operating leverage.
The stock trades at 39x/23.5x FY23E/FY24E consolidated EPS. We maintain our Buy rating with a Target Price of Rs 11,300 (27x Sep’24E consolidated EPS).
Maruti Suzuki India was quoting at Rs 8,984.05, down Rs 15.40, or 0.17 percent.
Nifty Information Technology index added 1 percent led by the L&T Technology Services, Coforge, L&T Infotech
Techno Electric & Engineering bags orders:
Techno Electric & Engineering Company Limited has recently secured prestigious new orders for FGD totalling to Rs 1,455 crore.
It included order from Rajasthan Rajya Vidyut Utpadan Nigam LTD – Kota – Rs 666 crore (1x210 MW +2X 195 MW) and from Rajasthan Rajya Vidyut Utpadan Nigam LTD – Jhalawar – Rs 789 crore (2x 600 MW).
