Closing Bell: Nifty ends above 14,500, Sensex gains 568 pts led by metal, FMCG, auto stocks

Taking Stock: Sensex Up 568 Points, Nifty Above 14,500 As Midcaps Outperform

All the sectoral indices ended in the green, with the Nifty metal index rose 3.6 percent. BSE midcap and smallcap indices gained over a percent each.

The Nifty-50 Index lost 1.6% this week due to turmoil in global equity markets and the sharp rise in Covid-19 cases in India. The Nifty Small Cap 100 Index declined by 2.7% this week as expiry was weak and fiscal year end phenomenon could also be at play.

Investors would like to take fresh view at the start of the next fiscal year. On the economy front, weekly activity indicators such as e-way bills remained strong with total e-way bills generated over March 1, 2021-March 21, 2021 increasing 4% versus the comparable period in February 2021.

On one hand the number of Covid cases are going up on the other hand the pace of vaccination is also accelerating. With fresh restrictions and faster vaccination, we can expect sentiment to remain positive at the start of the new fiscal year.

The earnings season will also kick in from the second week of April which could turn out to be the driver for stocks. Expect markets to remain volatile as the Nifty-50 has closed below the 50 DMA this week which works to 14,765 levels. Logically, markets should see some uptick from the first week of April. If this does not materialize at the start of April then we could see Nifty-50 drifting towards 13,500-13,600 levels.

Equity market has been consolidating under fear of losing its traction of economic growth recovery. Positive US job data and climb in fourth-quarter US GDP to 4.3% helped to reduce the gravity of the contraction. On the domestic front, high-frequency data suggests good economic activity in Q4FY21 and results will be announced from April. The second wave of Covid and high valuation will maintain volatility in the near term.

Next week is a truncated week with currency holidays, so we can expect market participation to be muted. At this point fx market is trying to get some more global news that will be the next catalyst. So, unless any nation stops the vaccine rollout, the rapid vaccination drive by the US will keep the risk appetite higher. However, lockdown in Europe and upbeat US data will limit any fall in USDINR spot. Thus we expect the spot to trade within 72.20-72.80.

The markets were unable to get past higher resistance hurdles of 14,700-14,800. Hence not much progress was made post the opening. However, what needs to be seen in the coming week is that we do not retest the lows of this week as that could cripple the index. Should that happen, we will slip further to test 14,000.

Index closed a week with loss of one and a half percent and formed bearish candle for a second consecutive week. The index has stiff resistance near 14,600 zone any decisive move above 14,600 zone can active good traction and then we may see quick move-in index towards 14,800-15,000 zone in the near term, good support is coming near 14,300 zone. If index saved mentioned levels then we may see sort of consolidation move in the range of 14,300-15,000 zone.

Indian rupee ended higher by 11paise at 72.51 per dollar, amid buyingsawin the domestic equity market.It opened 10 paise higher at 72.52 per dollar against Thursday's close of 72.62 and traded in the range of 72.37-72.53.

Benchmark indices ended higher on March 26 with Nifty above 14,500 supported by the metal, auto and FMCG stocks.

At close, the Sensex was up 568.38 points or 1.17% at 49,008.50, while the Nifty was up 182.40 points or 1.27% at 14,507.30. About 1633 shares have advanced, 1283 shares declined, and 167 shares are unchanged.

Tata Steel, Bajaj Finserv, Asian Paints, Hindalco Industries and Tata Motors were among the major gainers on the Nifty, while the losers included UPL, Eicher Motors, Power Grid Corp, IndusInd Bank and ITC.

All the sectoral indices ended in the green with Nifty Metal index rose 3.6 percent. BSE midcap and smallcap indices gained over a percent each.

The market witnessed some swift recovery from its short-term support around the Nifty50 Index level of 14,300 in the market today. The expected level should range between 14,300-14,700, and it’s going to be crucial for the short-term market scenario to sustain above 14,300.

Technical evidence is aligned to support the bullish case scenario. As such, the investors are advised to buy on intraday correction and look for exit around 14,700-14,750 levels in the short term.

The market observed momentum indicators like RSI, MACD to start showing positive divergence between the 19th-March-2021 and 25th-March-2021 swing low, indicating a short-term base at the level between 14,250-14,350 level is in the process.

Suryoday Small Finance Bank got listed today and is trading at almost 7% discount to the issue price. If we talk about Small Finance Banks (SFBs), the year has been tough for them because of the pandemic. If we talk about valuations, the IPO seemed reasonably priced as the company has very strong fundamentals.

It has one of the highest net interest margins (NIMs), RoA, and a strong deposit growth. The performance of IPO on the listing day can also be attributed to the recent selling pressure in the financial services sector. Investors with long-term outlook in the company can continue to hold on to their shares as the company seems to be appropriately placed among its peers.

SBI Cards is a multiyear growth story and provides a unique opportunity to participate in high potential credit segment with strong profitability. It is a proxy to the fast-growing digital payments with a strong parentage.

We believe SBI Cards would post a healthy PAT growth of 45% CAGR in FY21E-FY23E and reach RoA, RoE of 5.9%, 25.6%, respectively, by FY23E. We value SBI Cards at ~10xFY23E ABV to arrive at a target price of Rs 1,100/share. We have a buy rating on the stock.