Closing Bell: Nifty settles below 17,400, Sensex falls 175 pts; realty, banks outshine

Ajit Mishra, VP - Technical Research, Religare Broking

Markets started the week on a feeble note and lost nearly half a percent, in continuation to the prevailing corrective phase. After the initial downtick, Nifty breached the budget day low i.e. 17,353 levels and oscillated in a narrow band thereafter. Meanwhile, pressure in the IT, metal and auto majors kept the tone negative however resilience in the banking pack capped the damage. And, a fresh fall in the broader indices further deteriorated the sentiment.

The pressure in banking and financial majors was weighing on the sentiment during the initial phase of correction and now it’s cascading to the other sectors as well. Besides, the fall in the US markets is adding to the pessimism. Amid all, we feel it’s prudent to wait for a rebound for creating fresh shorts citing oversold positions and some resilience in select private banking names.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Weak Asian markets cues and worsening global macro economic indicators like higher inflation level, rising interest rates and volatile commodity prices are forcing investors to slash their equity exposure. Besides, currency fluctuation coupled with concerns of slowing growth and FII outflows are also keeping the mood bearish.

Technically, on intraday charts, Nifty has formed a double bottom and also formed a Hammer candlestick pattern on daily charts which is broadly positive.

We could see a quick pullback rally if the index trades above 17,300 and above the same the pullback move could continue till 17,500- 17,600 levels. On the flip side, a fresh round of selling is possible only after the dismissal of 17,300. Below the same the index could slip till 17,230-17,200.

Bajaj Auto falls over 5% with big volumes after a month long consolidation

Bajaj Auto shares corrected more than 5 percent for first time since June 2022 and formed large bearish candlestick pattern on the daily charts, following nervousness in overall equity markets on February 27.

This is the top loser in Nifty Auto index which corrected over 2 percent and the second biggest loser in Nifty50 which was down seven-tenth of a percent.

After a month long consolidation, the stock has seen a big gap down opening and traded way below all key moving averages, down 5.5 percent at Rs 3,640 on the NSE.

The momentum indicator RSI (relative strength index 14) also dropped significantly to 35 level, but one needs to watchful for hidden bullish divergence with price making higher low and RSI making lower low, indicating some signs of reversal.

"The latest gap down opening suggests continued downside pressure, with prices falling below the prior three weeks' lows and breaching the Lower Bollinger band, indicating increased volatility in the downward direction," Vidnyan Sawant, AVP - Technical Research at GEPL Capital said.

He feels the momentum indicator, RSI, has fallen below the 50 mark, suggesting a lack of positive momentum.

"The key support level for the stock is around Rs 3,450, while a move beyond Rs 4,000 is likely to spark further bullish momentum till record Highs (Rs 4,361.40), the expert said.

Vinod Nair, Head of Research at Geojit Financial Services

Bears continued to wreak havoc in the domestic market as the latest data releases from the US heightened the existing worries of aggressive rate hikes. The personal consumption expenditure in the US, which is Fed’s key monitorable of inflation, increased in January, pressuring investors to stay away from equities markets. The US dollar index surpassed 105, adding further pressure on the INR.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas

The Nifty opened on a weak note and witnessed volatile trading action throughout the day. It closed the day on a negative note for the seventh consecutive trading session.

On the daily charts we can observe that the Nifty has broken the support of the rising support trend line and also closed below it which is a sign of weakness. The Nifty is hovering around the 200-day moving average (17,376) which is likely to provide cushion and attract interest from long term investors.

The hourly momentum indicator has a positive divergence along with a positive crossover which indicates that selling pressure is weakening on the downside. After a continuous fall for seven trading sessions a pullback is possible, however it is unlikely to be a trend reversal.

Overall, the downtrend is still intact and any bounce should be used as an opportunity to create fresh short positions. Today, Nifty has achieved our short-term target of 17,350 and hence we are revising it downwards to 17,200.

Rupee Close:

Indian rupee ended 9 paise lower at 82.84 per dollar against previous close of 82.75.

Market Close:

Benchmark indices ended lower for the seventh straight session on February 27 with Nifty around 17,400.

At Close, the Sensex was down 175.58 points or 0.30% at 59,288.35, and the Nifty was down 73.10 points or 0.42% at 17,392.70. About 944 shares have advanced, 2511 shares declined, and 174 shares are unchanged

Adani Enterprises, Bajaj Auto, UPL, Tata Steel and Infosys were among the top losers on the Nifty, while gainers were ICICI Bank, Kotak Mahindra Bank, Power Grid Corporation, SBI and HDFC Life.

Except bank and realty, all other sectoral indices ended lower.

The BSE midcap index down 0.6 percent and smallcap index fell 1 percent.

Ashoka Buildcon wins order from Bangladesh Government

Ashoka Buildcon has received Notification of Award (NoA) from Ministry of Road Transport and Bridges (MORTB), Govt. of Bangladesh for the project viz. ‘Improvement of Baraiyerhat - Heanko - Ramgarh Road (R151 & R152) by widening & Reconstruction of Existing Pavement, Bangladesh.

The accepted contract value for the project is USD 80,154,324.32.

Nomura View On Crompton Greaves Consumer Electrical

-Buy rating, target at Rs 377 per share
-Company’s R&D center came up in 2019 & is ramping up
-Company is putting in significant R&D efforts across multiple segments
-Benefits of R&D will start flowing over next few years as products are rolled out
-Believe margin could be impacted due to price cut in pumps & high marketing expenses
-Company will be able to deliver ahead of industry revenue growth over next few years

Crompton Greaves Consumer Electrical was quoting at Rs 300.75, up Rs 2.10, or 0.70 percent on the BSE.

BSE 500

Anuj Choudharyy - Research Analyst at Sharekhan by BNP Paribas

Indian Rupee depreciated by 0.13% on weak domestic markets and a strong greenback. Surge in crude oil prices and FII outflows also weighed on Rupee. Dollar strengthened on concerns over higher interest rates for longer amid higher inflation and upbeat economic data from US. Core PCE deflator, the primary gauge of inflation used by the Fed rose to 4.7% in January, above forecast of 4.3%.

We expect Rupee to trade with a negative bias on risk aversion in global markets and positive greenback. Month-end Dollar demand from importers may weigh on Rupee.

However, any intervention by the Reserve Bank of India may prevent sharp fall in Rupee. Traders may remain cautious ahead of durable goods orders and pending home sales data from US. USDINR spot price is expected to trade in a range of Rs 82.50 to Rs 83.30.

JPMorgan View On Tata Motors

-Neutral rating, target at Rs 415 per share
-JLR retails outperform as expected; rising industry discounts key to monitor
-Monthly sales tracker for JLR indicates January 2023 retails grew 8% on YoY basis
-Track monthly retail sales releases of various end markets accounting for 85-90% of JLR’s volumes
-For JLR, key remains ramping up quarterly volumes to >1 Lk
-For JLR, key is generating close to GBP 1 billion FCF to resume deleveraging journey

Edelweiss receives shareholders' approval for demerger of wealth management business

Edelweiss Financial Services has received the shareholders’ approval for the proposed demerger of its Wealth Management business. The demerger will pave the way for listing of Nuvama Wealth Management (NWML), which was earlier known as Edelweiss Wealth Management.

NWML will allot 1.05 crore equity shares to shareholders of Edelweiss Financial Services on proportionate basis as a consideration for demerger.

Edelweiss Financial Services was quoting at Rs 63.45, down Rs 0.55, or 0.86 percent on the BSE.

Market at 3 PM

Benchmark indices erased some of the intraday losses but still trading lower with Nifty around 17,350.

The Sensex was down 247.61 points or 0.42% at 59,216.32, and the Nifty was down 91.40 points or 0.52% at 17,374.40. About 794 shares have advanced, 2530 shares declined, and 144 shares are unchanged.

Lemon Tree Hotels signs license agreement for a 110 rooms property in Himachal Pradesh

Lemon Tree Hotels has signed a License Agreement for a 110 rooms property in Kasauli, Himachal Pradesh under the company's brand 'Aurika'. The hotel is expected to be operational in November, 2024. Subsidiary Carnation Hotels will be operating this hotel.

Lemon Tree Hotels Ltd. was quoting at Rs 73.85, down Rs 0.10, or 0.14 percent.

Route Mobile launches TruSense, a digital identity and security suite

Route Mobile has announced the launch of TruSense, a digital identity and security suite that is critical to securing digital transactions through a reliable ecosystem, enabling businesses to authenticate the end user in a frictionless way.

Route Mobile was quoting at Rs 1,334.30, down Rs 2.75, or 0.21 percent on the BSE.

Sharekhan View on Sanofi India

Sharekhan has retained buy rating on Sanofi India with a revised price target of Rs 6,200.

Company’s established presence in chronic therapies, likely growth in insulin products, and portfolio expansion in cardiology continue to be the profitability drivers. We believe the emphasis on leveraging the digital platform and divestment of the slow-moving business have led to OPM expansion in Q4Y2022.

High-growth visibility from chronics, strong balance sheet and cashflows, and sturdy dividends are key positives. The stock price has corrected by 14% in the last six months and by 8% YTD, making valuations reasonable at 22.3x its CY2024E.

BSE Realty index added 2 percent led by Macrotech Developers, Indiabulls Real Estate, Mahindra Lifespace

Rajesh Bhosale, Technical Analyst, Angel One

Wipro is an underperformer as it didn't participate in the recent run seen in the IT space. The stock prices have struggled to cross the 200SMA placed around Rs 410 and for the uptrend to begin the prices need to close strongly above this key average.

On the flip side, Rs 380 - 370 is a strong support zone. Overall, the counter is trading in a broad range showing no signs of major traction.

Adani Enterprises shaves off 12% to near 52-week low, group stocks continue to bleed

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The share price of Adani Enterprises, the ports-to-power conglomerate Adani Group flagship, slipped further on February 27 to inch closer to its 52-week low of Rs 1,017.

The stock has lost two-thirds of its value since the explosive short seller report was released on January 24. Hindenburg Research accused Adani Group of fraud, stock manipulation, and accounting anomalies, and the group denied every allegation. From its 52-week high of Rs 4,189.55 hit in December 2022, Adani Enterprise has lost about three-fourths of its value.

In the options market, bulls and bears were fighting out at 1,200 levels. Some put writing was seen at 1,100, meaning it is emerging as a local support area. The 1,300 level, on the other hand, has large call positions as it remains a resistance for the stock. Read more

European Markets Updates

Jai Balaji Industries to expand into cement business in addition to its existing business

Market update at 2 PM

Sensex was down 282.39 points or 0.47% at 59,181.54, and the Nifty was down 105.60 points or 0.60% at 17,360.20.

Softening in the RBI’s tightening stand, a trigger for Indian market: Shankar Sharma

For the Indian market the trigger is going to be a softening in the RBI’s tightening stand because there is enough evidence that there is an impact of the rate-tightening cycle on consumer demand, both in rural India as well as in urban India, said Shankar Sharma, founder of GQuant Investech.

If you look at the numbers of consumer companies, Asian Paints and others, it is telling you that there is a softening in demand. So I think the trigger is going to be the next policy meeting when the RBI probably should give a pause or enough indication that it is turning dovish, instead of hawkish, he added.

Selling intensifies in Adani Group stocks, taking MC A10 index sharply lower for seventh straight day. Adani Enterprises is down almost 10%

Jayesh Faria, Associate Director, Regional Head – West, Motilal Oswal Private Wealth

India 10 year bond yield hits the high level of 7.45% which is the highest since November 22, this is an indication of nervousness in the market. In the last policy meeting, MPC refrained from giving forward guidance and retained the optionality to be on either side based on incoming data to change their stance to neutral on interest rates.

The market is still worried about domestic inflation numbers and global issues like the Ukraine war etc., adding to discomfort with growth projections. The Yield curve in the last couple of weeks has been flat due to monetary policy tightening, normalization of liquidity by RBI, and global factors.

There was hardly any liquidity premium left for locking in yield beyond 5 years of maturity. The term spreads between 5-10 years of maturity have been compressed to only 10bps as compared to 100 bps in 2020. So this increase in the yield will force interest rates to move to the new range of 7.50% to 7.75%.

Market experts feel that policy rates may have peaked and real rates would gradually increase with the easing of inflation. On account of global and domestic factors like Global Central Banks’ policy actions, currency, inflation, crude oil, and geopolitical events, yields may remain volatile with an upward bias. This will be a good time for investors to lock in higher rates rather than take credit risk.

Kalpataru Power completes sale of additional stake in Kohima-Mariani Transmission

Kalpataru Power Transmission has successfully completed the sale and transfer of an additional 25% stake in Kohima-Mariani Transmission, to Apraava Energy.

Post the transaction, the company has now transferred an aggregate of 48% stake in KMTL, with an agreement to sell balance 26% to Apraava, after obtaining requisite regulatory and other approvals.The company had held 74% equity stake in Kohima-Mariani Transmission, and the remaining 26% held by Techno Electric and Engineering Company.

Kalpataru Power Transmission was quoting at Rs 520.50, down Rs 1.10, or 0.21 percent on the BSE.

Power Grid shares gain:

Power Grid Corporation of India's committee of directors on investment of the company has approved 4 projects worth Rs 803.57 crore including implementation of western region expansion scheme-XXV, and north eastern region expansion scheme-XX.

Power Grid Corporation of India was quoting at Rs 215.65, up Rs 0.65, or 0.30 percent.

Will early onset of summer help Voltas? Goldman Sachs, Jefferies have opposing views

Zee Learn appoints Manish Rastogi as Chief Executive Officer

Zee Learn share price gained 4 percent after company approved the appointment of Manish Rastogi as its Chief Executive Officer (CEO). Earlier, he was the Chief Executive Officer at Vibgyor Group of Schools.

At 13:23 hrs Zee Learn was quoting at Rs 3.11, up Rs 0.14, or 4.71 percent. Ittouched a 52-week low of Rs 2.85.

Market at 1 PM

Benchmark indices were trading lower with Nifty around 17,350.

At 13:06 hrs IST, the Sensex was down 341.19 points or 0.57% at 59,122.74, and the Nifty was down 124.10 points or 0.71% at 17,341.70.About 740 shares have advanced, 2504 shares declined, and 148 shares are unchanged.

Tega Industries set to acquire McNally Sayaji Engineering

Tega Industries is set to acquire McNally Sayaji Engineering. NCLT has approved Tega's resolution plan for the acquisition of McNally Sayaji Engineering through CIRP process.

Once completed, this will be Tega’s first acquisition in India and fourth worldwide. The acquisition is in line with the company’s objective of widening its product portfolio to service global and Indian businesses better.

Tega Industries was quoting at Rs 620.95, down Rs 22.05, or 3.43 percent on the BSE.

Citi View On Power Sector 

-Healthy power demand growth continues, NTPC top pick
-Power demand growth in India continues at a healthy clip
-6month/12month moving average of base power demand growing 8%/10% YoY in January 2023
-Base power demand has grown at 3-year CAGR of 5% over April 2022-January 2023
-Expect peak power demand to surge to 228 GW versus 216 GW in April 2022
-Government to invoke section 11 to enable imported coal-based plants to operate at max capacity
-NTPC is trading at 1x P/BV & 5% dividend yield
-Maintain sell on Tata Power & JSW Energy

Divgi Torqtransfer sets IPO price band at Rs 560-590 a share

Automotive component firm Divgi Torqtransfer Systems Ltd, the first mainboard initial public offering in 2023 after a gap of nearly two months, has set a price band for its share sale at Rs 560-590 apiece.

The issue will open on March 1 for subscription and close on March 3. The anchor bidding will be on February 28.Read More

Nifty Bank index up 0.5 percent supported by Bank of Baroda, ICICI Bank, Kotak Mahindra Bank

Uflex share price down over 13 percent on February 27; continues losing streak on fifth straight day

Dollar gains

The dollar held firm near a seven-week peak on Monday, after a slew of strong U.S. economic data reinforced the view that the Federal Reserve will have to raise interest rates further and for longer.

The dollar index, which measures the U.S. currency against six major peers, was up 0.038% at 105.21, just shy of the seven week high of 105.32 it touched on Friday after the hotter-than-expected data was released.

The euro was flat and pinned near the seven week low of $1.0536 it hit on Friday.

Sterling was last at $1.1943, down 0.01% on the day.

The Japanese yen strengthened 0.12% to 136.29 per dollar, having slipped to more than two month lows of 136.58 earlier in the session.

Gold hits 2-month low:

Gold prices slipped to a two-month low on Monday, after strong U.S. economic data stoked fears that the Federal Reserve would deliver more interest rate hikes to bring down inflation.

Spot gold eased 0.1% to $1,808.51 per ounce, as of 0541 GMT. U.S. gold futures were down at $1,815.00.

Market  at 12 PM

Benchmark indices were trading lower with Nifty around 17,350.

The Sensex was down 280.36 points or 0.47% at 59,183.57, and the Nifty was down 106.40 points or 0.61% at 17,359.40.About 806 shares have advanced, 2385 shares declined, and 153 shares are unchanged.

Vishnu Chemicals board approves investment proposal of up to Rs 1,000 crore

The board of directors of Vishnu Chemicals at their meeting held on February 27, 2023 approved the investment proposal upto Rs 1000 crores for development of Green Field Project in the states of Gujarat and Andhra Pradesh by way of setting up Speciality Chemicals Integrated Plant in a span of next five years.

SpiceJet board approves to raise upto Rs 2,500 crore via QIB

The Board of Directors of SpiceJet has proposed to seek enabling approval of members of the company for raising fresh capital of upto Rs 2,500 crore through issue of eligible securities to qualified
institutional buyers, in accordance with the relevant provisions of applicable law and subject to receipt of applicable regulatory approvals, as may be required.

Also, board agreed to enter into a business transfer agreement with its subsidiary namely SpiceXpress and Logistics Private Limited for transfer of its cargo business undertaking as a going concern, on slump sale basis. Accordingly, cargo business shall be exclusively undertaken by SXPL effective April 1, 2023 or such other date as may be finalized.

Jefferies On Real Estate 

-Delayed pause in rate hike & risk-off sentiments led to stock underperformance
-Find 40% valuation contraction since late 2021 is already near past cycle levels
-Valuations are now at pre-RERA reform levels
-Valuations are ignoring the sector discipline & strong housing cycle
-Developers with valuations at/below average including Lodha, Godrej Props, Prestige Estates & DLF

IRB Infrastructure Developers receives LoA from NHAI

IRB Infrastructure Developers has received Letter of Award from National Highways Authority of India (NHAI) for the project of 'upgradation to six lane with paved shoulder of NH-27 from Samakhiyali to Santalpur section in Gujarat on BOT (Toll) mode.

Jefferies On SBI: Buy Rating, Target at Rs 760

-Hosted Chairman, DMD-Finance & CFO for NDR in US & UK
-Two topical issues were risk from exposure to Adani group & capital raise
-Management said exposure to AdaniGroup is all encompassing & cash generating
-Capital raising isn’t an immediate plan as CET1 at >10.2% RoE will aid growth
-See mid-teens loan growth, wider NIM & RoA of 1%

50 DMA