Closing Bell: Nifty ends around 17,350, Sensex gains 1,031 points; all sectors in the green

Taking Stock | Market ends FY23 on a high; Sensex up 1,031 points, Nifty above 17,300

For the week, Sensex and Nifty added 2.5 percent each, while remained flat for the month of March.

Domestic indices ended the last day of the month on optimistic note led by rally in global markets and FIIs turning net buyers. Sharp decline in India VIX from recent high of 17 zones to 12.8 levels, too supported the markets. Nifty opened gap up and continuously strengthen throughout the session to close with handsome gains of 279 points (+1.6%) at 17360 levels. All sectors ended in green with Oil & Gas, IT and Realty being major gainers.

Niche sectors like Sugar and Defence too were in limelight and we expect this momentum to continue. Large order inflows from government to various defence companies lifted the sector, while rally in sugar stock was seen due to increase in refined sugar prices and government’s thrust to double the ethanol blending by 2025. While Nifty ended FY23 on a flat note (-0.6%), Nifty midcap 100 closed with gains of 1%. However, Nifty Smallcap 100 succumbed to the global pressure - down 14% in FY23.

In FY24, we expect strong earnings growth of around 15% – largely because of improving margins as raw material prices cool-off. This would be further supported by demand revival that had moderated out since Q3FY23. Valuation too has come off substantially from 24x 1-year forward P/E in Oct’21 to 17x currently (v/s 20x long period average), offering moderate margin of safety.

In the near term, focus will now remain on RBI’s policy meeting next week, where 25-bps rate hike is expected in line with the hikes done by major global central banks. Apart from this, markets will also react to monthly Auto sales number data that will be released over the weekend.

Nifty broke out upwards on March 31 aided by positive global cues and year end buying. At close, Nifty was up 1.63% or 279.1 points at 17359.8. Volumes on the NSE were a little higher than recent average. Broad market indices rose less than the Nifty as advance decline ratio rose to 2.28:1. Indian markets outperformed all other Asian markets for the day.

Global stock markets edged higher Friday, with investors assimilating mixed Chinese activity ahead of the release of key inflation data on both sides of the Atlantic even as the fears of banking crisis waned.

Morgan Stanley has upgraded India to equal-weight (EW), with the narrowing valuation premiums and a resilient economy.

Nifty rose smartly on March 31 with an upgap (above the highs of the previous 4 sessions). 17451-17529 could be the resistance for Nifty in the near term, while 17225 could be a support. Nifty rose 2.45% over the week – the largest weekly gains in 9 months. As we enter a new fiscal year, we may see some more gains before pre Q4 results nervousness kicks in.

Markets ended the last session of the financial year on a high note, tracking firm global markets and supportive local cues. After the gap-up start, Nifty extended the positive tone as the session progressed and finally settled at 17,359.75 levels; up by 1.63%. All sectors contributed to the move wherein energy, IT and banking deserve special mention. In line with the trend, the market breadth was also inclined strongly on the advancing side.

Markets are taking comfort from stability in the global markets and we expect the positive tone to continue. On the index front, Nifty has finally ended a 2-week long consolidation phase (16,800-17,200) and it might take a breather around 17,400 before marching towards 17,600 levels. Amid all positivity, participants shouldn’t go overboard and maintain their focus on stock selection.

Markets saw a perfect ending to FY23 as charged bulls went berserk on Dalal Street thus propelling both the benchmark indices to close above the psychological mark. The rally was long overdue as fading worries over the recent turmoil in the US and European banking industry prompted investors to latch upon the beaten down stocks. Also, falling US bond yields and the return of FIIs into the local markets in recent sessions have bolstered the market sentiment.

Technically, on daily charts the Nifty has formed a higher bottom formation and on weekly charts it has formed a long bullish candle which is broadly positive. In addition, after a long time the index is trading above the 20-day SMA (Simple Moving Average) level which too is indicating further uptrend from the current levels.

For traders, 20-day SMA or 17,200 would act as a sacrosanct support zone, and above the same the index could rally till the 200-day SMA or 17,450 -17,550. However, below the 20-day SMA, uptrend would be vulnerable.

Meanwhile, in the Bank Nifty, positive sentiment is likely to continue in the near future and 40,200 could be the key support level. Above which, it could rally till the 50-day SMA or 40,800. Any further upside could lift the Bank Nifty till 41,250.

Nifty witnessed continuation of positive momentum from the previous trading session and closed the day on with handsome gains of ~280 points. On the daily charts we can observe that the Nifty has managed to close above the 20-day moving average (17214) which is a sign of strength.

The daily momentum indicator has a positive crossover which is a signal. Thus, both price and momentum indicator is suggesting further upside. The index is likely to test the zone of 17480 – 17500 where resistance in the form of the 200-day moving average and the upper end of the falling channel is placed.

A key observation to note here is that on the monthly chart the Nifty has managed to close above the 20-Month moving average (17351) which is a positive sign. In terms of price pattern, it has formed a Doji pattern indicating a pause after falling for three consecutive months. During April, Nifty is likely to witness a rebound with IT, Energy, Metals, Capital Goods and PSU banks leading from the front.

Bulls remained at the helm as the benchmark Nifty closed well above the crucial resistance level of 17250. On the daily chart, the index has moved above the recent consolidation, suggesting a rise in optimism.

The momentum oscillator RSI has entered a bullish crossover. The trend is likely to remain strong as long as it remains above 17200. On the higher end, the next important level is 17500–17600, where bears will be waiting.

The Indian rupee marked the second weekly and best quarterly gains in the last nine quarters following lower trade deficits and lower crude oil prices. The foreign fund inflows and stronger regional currencies also supported the rupee’s recovery.

Ahead of next week’s RBI monetary policy decision, the rupee is expected to trade between 81.70 to 82.50. Market participants are already pricing in a quarter basis points increase in the interest rate and expecting a pause for the later part of the year.

As the financial year drew to a close, the market witnessed an upward trend marked by bullish moves in the banking and IT sectors driven by robust global cues. Notably, an increased interest from foreign institutional investors due to the moderation in Indian stock valuations also aided. While the US market awaits the release of personal consumption expenditures data, which is considered a crucial indicator for forecasting the Federal Reserve's future actions, domestic investors await the RBI MPC meeting scheduled next week.

Domestic equity markets ended the week on a strong note. For the week, domestic markets closed in the positive territory. Sensex 30 and Nifty 50 index rose more than 2%. BSE Midcap and BSE Small-cap index gained ~ 1-2%. Most of the sectoral indices reported positive gains during the week. However, BSE Power index saw negative returns during the week.

Key global equity markets also witnessed a recovery, even though sentiments remained volatile. Euro zone headline inflation slowed to 6.9% in March 2023, down from 8.5% in February 2023.

Crude oil price rose this week from the lows witnessed earlier this month. Markets will continue to focus on inflation numbers across key economies and related Central Bank actions. Domestic markets will keenly watch out for RBI policy meet scheduled next week. Over the coming weeks, the market will also start focusing on Q4FY23 earnings season.

Indian rupee ended 15 paise higher at 82.18 per dollar against Wednesday's close of 82.33.

: benchmark indices ended on a strong note with Nifty above 17,300 amid buying seen across the sectors.

At close, the Sensex was up 1,031.43 points or 1.78% at 58,991.52, and the Nifty was up 279.10 points or 1.63% at 17,359.80. About 2322 shares advanced, 1145 shares declined, and 108 shares unchanged.

Top gainers on the Nifty included Reliance Industries, Nestle India, Infosys, ICICI Bank and Tata Motors, while losers included Apollo Hospitals, Adani Ports, Sun Pharma, Asian Paints and Bajaj Finance.

All the sectoral indices ended in the green with Information Technology index up 2.5 percent, while auto, bank, FMCG, Capital Goods, Realty and Oil & Gas up 1 percent each.

The BSE midcap and the smallcap indices rose 1 percent each.