Closing Bell: Market ends marginally higher amid volatility; metals outshine, realty, bank drag

Nifty had a volatile session amid weak global cues and weekly expiry. It closes above 18,250 as bulls maintain the momentum on Dalal Street.

The index has once again given a flat to a marginal positive start in today's session. Volatility was visible owing to weekly expiry with wild swings on both sides.

Going ahead 17,940 -18,000 will be good short-term support for upcoming trading sessions and on the upside 18,340 will act as new immediate resistance.

A hammer candlestick pattern is visible on daily charts indicating that the steam is cooling off and we can see sideways or profit booking sessions in the coming days. The structure of the index is in favor of bulls. Market breadth has remained at 2:1 with 36 stocks on the advancing side & 14 stocks on the declining side.

Markets extended gains for the fifth straight session, but it looks like bulls are showing signs of fatigue as trading largely remained rangebound.

The Nifty has formed a Doji candlestick formation indicating indecisiveness between bulls and bears. However, the medium-term texture is still positive.

Direction wise, below 18200 we can expect profit booking and post breakdown the chances of hitting 18140-18100 levels are bright. On the other hand, as long as the index is trading above 18200, the uptrend will continue till 18300-18350.

Nifty’s ascent towards 18,605 is on the radar. Interestingly, the gains came despite US CPI surging to the highest level since June 1982 and core CPI registering the biggest advance since 1991. The stronger readings reinforce the need for quicker interest rate hikes by the Federal Reserve.

Also, in a double whammy for the economy, India’s retail inflation rate shot up to a five month high in December and growth in factory output decelerated to a nine-month low in November.

There is likely to be lots of opportunities on the buy side as long as Nifty stays above 17889 mark. The immediate goalpost on Nifty is seen at its all-time-high at 18605 mark.

Metals stole the show in today's trade with the metal index rising over 3.5% well supported by the pharma & PSE index.

Sugar stocks were in demand on the back of Ethanol push and robust outlook in CY2022. Profit booking was seen in select cement & IT stocks in today's trade.

The Nifty opened gap up on January 13 post which it traded in a sideways manner & ultimately formed a Dragonfly Doji on the daily chart. This gives a warning that the rally can run out of the steam in the short term. The hourly momentum indicator continues to show negative divergence near the overbought zone that also shows that the index is losing momentum on the upside.

The hourly chart shows that the index is trading near lower end of a rising channel, which is near 18160. Below that, a recent gap area of 18081 – 18128 will be the key support to watch out for.

The short term trajectory can remain positive as long as the index trades above these supports & the Nifty can test its weekly upper Bollinger Band near 18400. On the other hand, breach of these supports will be an indication of exhaustion in the trend from short term perspective.

Nifty remains in an uptrend and is expected to test 19000-19500 levels going ahead. Any correction in the short term can be used to initiate fresh long positions.

We remain positive on Metals and FMCG at current levels; Realty, IT, and Auto trade with positive bias but can be bought only on deeper corrections.

The Nifty has given a positive close above 18250. Ideally, the next target is 18500 with strong support at 17800. Any dip can be utilized to accumulate long positions on the index.

The domestic market traded between gains and losses weighing the initial positive earnings results and weak global cues. Globally, western markets traded lower due to 4-decade high inflation as the US consumer price index rose by 7% YoY in December.

Owing to an unfavourable base effect, India’s retail inflation also jumped to 5.59% in December higher than RBI’s forecast of 5.1% for Q3FY22. India’s Industrial Production registered a subdued growth of 1.4% as supply shortage constrained factory production.

Benchmark indices ended with marginal gains in the volatile session on January 13 with buying seen in the metal and pharma names.

At close, the Sensex was up 85.26 points or 0.14% at 61,235.30, and the Nifty was up 45.50 points or 0.25% at 18,257.80. About 1630 shares have advanced, 1609 shares declined, and 62 shares are unchanged.

Tata Steel, JSW Steel, Sun Pharma, Coal India and UPL were the top Nifty gainers. Losers were Wipro, Asian Paints, HDFC Bank, Kotak Mahindra Bank and IndusInd Bank.

On the sectoral front, metal, pharma, power, oil & gas and capital goods indices rose 1-3 percent, while bank and realty indices fell over 0.5 percent each. BSE midcap and smallcap indices ended in the green.

The research house has kept an outperform call on the stock and raised the target price to Rs 2,350 as it was a solid quarter with strong beat on revenue and net profit.

It has increased FY22/23/24 EPS estimates by 2 percent/4 percent/4.5 percent respectively.

Infosys was quoting at Rs 1,893, up Rs 15.40, or 0.82 percent on the BSE.

While RM cost pressures remain a headwind in H2FY22, price hikes would partially soften the impact on gross profit per vehicle, with
recovery expected from Q4FY22.

We are monitoring the launches, which would be a key trigger. We expect a volume CAGR of 17% over FY21-24E with an EBITDA margin of 9.6% in FY23E and 11.5% in FY24E.

We reiterate accumulate with a higher target price of Rs 9,288 from Rs 8,013 based on 26x (unchanged) FY24E P/E as we roll forward.

Indian markets opened flat to marginally positive despite negative Asian market peers after higher inflation reading from US and China's bank lending declined more than expected in December.

During the afternoon session markets managed to trade in green albiet with a narrow range. Traders were positive, as Commerce and Industry Minister said start-ups of the country will help India transition from an assembly economy to a knowledge-based economy.

Adding more relief, a private report stated that digital platforms help unlock up to 30 percent more value for micro entrepreneurs who are associated with them by helping overcome challenges like market access and credit.

Supreme Engineering board has approved the sub-division/ split of equity shares of the company from face value of Rs 10 each into Re 1 each as decided by the board, subject to approval of members through postal ballot, company said in its release.

Supreme Engineering was quoting at Rs 24.70, up Rs 0.40, or 1.65 percent on the NSE.