Closing Bell: Nifty above 18,000, Sensex up 243 points; IT, auto, realty gain

Taking Stock | Market ends higher on late buying; Sensex up 243 points, Nifty reclaims 18,000

On the sectoral front, information technology, auto and realty were up a percent each... Read More

Markets edged higher for the second consecutive session and gained nearly half a percent amid mixed cues. Weakness in the global markets was weighing on the sentiment in early trades but resilience in the select heavyweights pushed the index gradually higher. Consequently, Nifty reclaimed the 18,000 mark, after struggling for three weeks. On the sectoral front, IT, auto and realty posted decent gains while defensive viz. pharma and FMCG traded subdued.

We reiterate our positive view on the market however intermediate consolidation/profit taking on the global front and restricted participation within the index heavyweights could keep the momentum in check. We thus recommend staying selective and preferring exposure to the counters which are leading from the front.

Finally, the frontline index has surpassed the high of the big Budget Day candle and closed just above the psychological 18,000 mark. Despite the weak start Nifty managed to recover from its losses and witnessed a triangle pattern breakout in the lower time frame (30 mins).

Two consecutive bullish candles on the daily chart indicate bulls are back in action and the index also closed above its 9 & 21 EMA which is positive for the short term.

The positive takeaway was that the Nifty technical landscape looked bullish and the benchmark now should aim to sustain above the 18,000 mark. The immediate cap for the index is seen at 18,200 levels and 17,900 will act as instant support for tomorrow's weekly expiry day.

Nifty has given a falling channel breakout on the daily timeframe, suggesting a bullish reversal of the price trend. The trend looks positive now for the near term, with the 14 DMA sitting below price.

The momentum indicator RSI is in support of the price trend, with a current reading above 50. Over the near term, the index may move up towards 18,350–18,400. On the lower end, support is placed at 17,950.

Nifty rose for the second consecutive session on February 15. At close, Nifty was up 0.48% or 86 points at 18015.9. Midcap index rose more than the Nifty even as the advance decline ratio improved to 1.23:1. Indian markets were the star performers in the Asian region where most markets ended in the red.

Asian stocks were mostly down but European markets recovered from the initial weakness on Wednesday after US inflation edged down less than expected, fuelling concern the Federal Reserve might think more interest rate hikes are needed. UK CPI data showed inflation fell for the third month in a row January to hit 10.1%, according to the Office for National Statistics, below Reuters economists’ expectations of 10.3%.

India's trade deficit narrowed in January as imports fell at a faster rate than exports. The trade deficit narrowed to USD 17.75 billion in January, compared with USD 23.76 billion in December 2022.
Exports contracted by 6.6% to USD 32.91 billion y-o-y. Imports contracted by 3.6% to USD 50.7 billion y-o-y.

Nifty broke out upwards out of a trading range, as expected. Now the trading range of the Nifty shifts to 17,856-18,118 with an upward bias for the near term.

Markets were slightly volatile in early trades, but recovered in late trades to end with steady gains as investors mostly resorted to selective buying. Traders are taking a cautious approach currently due to uncertainty in global markets and the trend could continue for some more time.

Technically, post the 17,900 breakout the market is comfortably trading above 17,850, which is largely positive. The Nifty has also formed a bullish candle and a higher bottom formation on intraday charts which supports further uptrend from the current levels.

For the trend following traders, 17,900 would act as a key support zone, above which the index could move up to 18,100-18,150. On the flip side, below 17,900, bulls may prefer to exit out from the trading long position.

The US inflation, though it slowed down compared to the previous month, came in higher than expected at 6.4% YoY. Higher inflation, combined with a strong labour market, has raised concerns that the Fed will remain hawkish for an extended period.

Despite a sluggish start in the domestic market, recovery in the IT and auto sectors contributed to a positive finish. A reversal in the FII pattern to net buying has also helped maintain optimism in the domestic market.

Indian rupee closed marginally lower at 82.80 per dollar on Wednesday against Tuesday's close of 82.76.

benchmark indices ended higher with Nifty above 18,000.

At Close, the Sensex was up 242.83 points or 0.40% at 61,275.09, and the Nifty was up 86 points or 0.48% at 18,015.80. About 1722 shares have advanced, 1657 shares declined, and 129 shares are unchanged.

Tech Mahindra, Apollo Hospitals, Eicher Motors, Reliance Industries and Adani Enterprises were among the biggest gainers on the Nifty, while losers included HUL, Sun Pharma, ITC, L&T and ONGC.

On the sectoral front, IT, auto and realty up 1 percent each.

BSE midcap index added 0.7 percent and the smallcap index rose 0.4 percent.

Indian Rupee declined by 0.05% on strong Dollar. However, positive domestic equities and weak crude oil prices capped sharp gains. Rupee also erased earlier losses on upbeat trade deficit data. India’s trade deficit unexpectedly narrowed to $17.75 billion in January from $23.76 billion in December. It topped estimates of $24.20 billion. While exports slipped to $32.91 billion from $34.48 billion a month earlier, imports dwindled to $50.66 billion from $58.24 billion in the previous month.

Dollar strengthened as CPI data from US printed at 6.4% in January, above estimates of 6.2%, but slightly lower than 6.5% in December, signaling that sticky inflation may keep interest rates holding on at higher levels for longer.

We expect Rupee to trade with a negative bias strength in the Dollar amid expectations of positive economic data and concerns over hawkish Fed. However, narrowing trade deficit with FII inflows may support Rupee at lower levels. Traders may remain cautious ahead of retail sales, industrial production and Empire State manufacturing index. USDINR spot price is expected to trade in a range of Rs 82.20 to Rs 83.30.

Morgan Stanley has kept an 'equal-weight' rating on the stock with a target price of Rs 3,553 per share.

The report notes that the company gained market share following the launch of the Hunter model. It also suggests that the margin and market share of the company are likely to peak in 2023.

The launch of Bajaj Triumph in 2023 and Hero Harley in 2024 are key developments to watch in the industry.