Closing Bell: Nifty ends above 17,700, Sensex rises 695 pts led by IT, pharma, financials

Markets continued to trade buoyant and ended with gains of over a percent. Positive global cues combined with budget-led buoyancy triggered a gap-up start and the benchmark gradually inched higher as the day progressed.

Consequently, Nifty settled around the day’s high to close at 17,780 levels. Among the sectors, banking and financials were in the focus from the beginning, closely followed by media, healthcare and IT. In line with the move, the market breadth was also inclined strongly on the advancing side.

Markets are currently riding high on the back of optimism post the Union Budget. Besides, global recovery and favourable earnings are also adding to the positivity. Amid all, one shouldn’t forget that the Nifty index is still in a trading range and 18,000-18,300 would continue to act as a hurdle.

We feel participants should focus on identifying the sectors/themes which are trading in sync with the index. Among the sectors, banking and financials have the potential to outshine others.

Indian equity remained strong during the last trading session as Nifty moved to its 61.8% retracement level of the previous fall.

Going forward, Nifty needs to sustain above 17775-17800 to witness further rally toward 18000 and higher over the short term. On the lower end support seen at 17700, below which the index may consolidate over the near term.

Post the recovery on the Budget day, Nifty started the day with a gap up above 17700. The index kept the momentum intact throughout the session and ended around its highest point to end tad below 17800 with gains of over a percent.

The indices kept the momentum intact after the budget day as the sentiment remained positive and the global markets too continued the up move. Technically, Nifty has retraced 61.8 percent of the recent corrective phase which is placed at 17700-17800.

Although this is a resistance zone, the index maintained its positive structure for most part of the day around this zone which is a positive sign and hence, we could see a continuation of the up move.

If the markets sustain above 17800, then the index could approach 18000-18050 zone in the near term. The Banking space, as expected, is showing outperformance and is leading the momentum on the higher side. Hence, we continue with our optimistic stance on the index and continue with our advice to trade with a positive bias and look for buying opportunities in intraday declines. The immediate support for Nifty is now placed in the range of 17675-17600.

The domestic market continued its bull ride tracking budget cues and positive sentiments from global markets. Most sectors remained green while banking and finance stocks contributed most to the gain.

Global markets added its gain as strong earnings numbers helped investors to digest geopolitical worries. Besides corporate numbers, investors are also awaiting the outcome of OPEC+meeting and Eurozone inflation numbers for January.

Benchmark indices ended higher for the third straight session on February 2 with Nifty comfortably closing above 17,700.

At close, the Sensex was up 695.76 points or 1.18% at 59,558.33, and the Nifty was up 203.20 points or 1.16% at 17,780. About 2243 shares have advanced, 1038 shares declined, and 90 shares are unchanged.

IndusInd Bank, Bajaj Finserv, HCL Technologies, Bajaj Finance and HDFC Life were the top Nifty gainers, while losers included Tech Mahindra, Britannia Industries, UltraTech Cement, Hero MotoCorp and Nestle India.

All the sectoral indices ended in the green with bank, realty, pharma, FMCG, IT and PSU Bank indices up 1-3 percent. BSE midcap and smallcap indices rose 1-1.5 percent.

S&P Global Ratings on Wednesday downgraded Future Retail Ltd’s long-term issuer credit rating from 'CCC-' to 'SD' after the company failed to repay the principal on its debt.

Future Retail Ltd failed to make the principal payments due on its restructured domestic bank borrowings on December 31, 2021. The 30-day review period (grace period to pay) allowed by the Reserve Bank of India (RBI) has ended, S&P said in a statement.

Wholesale sales volume reported by auto companies were under pressure in January 2021. Passenger vehicle segment remained impacted from chip shortage issue. However, the consumer sentiments in the domestic passenger vehicle is strong and we expect swift recovery post resolution of chip shortage situation.

The domestic two wheeler companies reported sharp volume decline (over January 2021) possibly on account of delayed harvesting impacting rural cash flows, channel destocking and rising ownership cost.

Tractor segment too reported sharp yoy volume decline in January 2022 due to unseasonal rains and channel destocking. Medium and Heavy Commercial Vehicle segment continued volume recovery supported by pick-up in economic activity.

The Budget highlighted Government’s focus on developing electric vehicle ecosystem including EV charging station, push for EV’s in public transport and battery swapping policy.

Research house JPMorgan has maintained buy call and raised the target price to Rs 160 from Rs 147 per share.

It was a strong underlying quarter ex-excise-driven inventory loss and it is well positioned for a refining recovery.

The strong operating cash flows allows company to pursue growth aggressively, said JPMorgan.

Indian Oil Corporation was quoting at Rs 124.30, up Rs 2.55, or 2.09 percent on the BSE.

Balrampur Chini Mills has reported December quarter net profit at Rs 64.1 crore versus Rs 26.9 crore and revenue was up 13.1% at Rs 1,212.3 crore versus Rs 1,072.3 crore, YoY.

Earnings before interest, tax, depreciation and amortization (EBITDA) was at Rs 99.8 crore versus Rs 36.4 crore and margin at 8.2% versus 3.4%, YoY.

Balrampur Chini Mills was quoting at Rs 414.00, down Rs 11.25, or 2.65 percent on the BSE.

The increase in infra spend for the year has risen from Rs 5.54 lakh crore to Rs 7.5 lakh crore. This is a huge number and an increase of 35.4%. Of course, it is likely to include catch-up spend from the prior years that was not deployed due to the pandemic.

One of the highlights was the Rs 60,000 crore allocation for providing tap water to 3.8 crore households. 20% of this will be spent on pipes, benefiting the steel pipe sector.

The national highway is to be expanded by 25,000km. This will be a positive for road-laying EPCs. Also, 4 new multi-modal logistic parks are to be kicked off, as well as 400 new express trains and 100 new cargo terminals to be built in the next 3 years. While design and execution are equally important, all these pushes should benefit the overall infra sectors such as steel, cement, pipes EPC and India in general.

Somany Ceramics has posted 10.7 percent jump in its Q3 net profit at Rs 34.2 crore versus Rs 30.9 crore and revenue was up 18.8% at Rs 585.2 crore versus Rs 492.5 crore, YoY.

Earnings before interest, tax, depreciation and amortization (EBITDA) was down 4 percent at Rs 60.6 crore versus Rs 63.1 crore and margin was at 10.4% versus 12.8%, YoY

Somany Ceramics was quoting at Rs 887.05, up Rs 9.25, or 1.05 percent.

Benchmark indices extended the gains and trading at day's high level with Nifty near 17,800 level.

The Sensex was up 650.43 points or 1.10% at 59513, and the Nifty was up 192 points or 1.09% at 17768.80. About 2171 shares have advanced, 979 shares declined, and 84 shares are unchanged.

Shares of Jubilant FoodWorks fell more than 3 percent after the company’s Q3 earnings largely disappointed investors.

The QSR major reported a same-store sales growth of 7.5 percent, which was below analysts’ estimate of 8-10 percent.

The consolidated net profit of the company rose 7.5 percent on-year to Rs 133.2 crore but missed analysts’ estimate of Rs 150 crore.

The fast-food company’s operating margins also failed to impress as they expanded 40 basis points on-year to 26.6 percent.