Closing Bell: Nifty ends below 17,700, Sensex falls 287 pts; PSU Banks outperform

Markets witnessed profit taking amid mixed cues and lost over half a percent. After the initial uptick, the Nifty index gradually inched lower and settled closer to the day’s low at 17,656.40 levels.

Meanwhile, the trend was mixed on the sectoral front wherein FMCG and energy majors were under pressure, while auto and IT tried to save the day. Interestingly, the broader indices outperformed the benchmark and ended almost on a flat note.

While the global markets are still not portraying any clear trend, the recent buying in heavyweights especially from the banking pack has lifted the sentiment.

We may see some consolidation in the index ahead but the tone is likely to remain positive. The focus should remain on identifying stocks from the sectors which are participating in the move, without losing focus on risk management citing volatile global markets and prevailing earnings season.

The benchmark index Nifty remained volatile during the day, before closing on a negative note. On the daily chart, it formed a bearish candle.

During the day the Nifty remained above the previous consolidation high, suggesting a rise in optimism.

Over the short term, the trend is expected to remain strong. On the higher end, resistance is visible at 17950. On the lower end, support is placed at 17550/17400.

Indian markets opened higher in-line with positive global cues. Nifty opened higher but could not sustain previous day‘s strength and fizzle out during the day. The index close near day’s low at 17656 levels (-74 points).

Nifty witnessed strong pre-Diwali buying, gaining more than 400 points in the previous 5 trading sessions before the Muhurat session. Strong festive demand and healthy earnings announced so far have helped Nifty to move up sharply by 6% in Oct’22.

We expect gradual momentum in market to continue with support base also shifting higher. US markets have also turned positive providing further strength to Indian equities. Banking stocks and PSEs are likely to remain in action with strong results and healthy demand outlook.

The domestic market pared its early gains with FMCG and private banks pressuring the benchmark. Market attention has shifted to central bank policy announcements since the European Central Bank is expected to hike interest rates at its upcoming policy meeting.

The impending US GDP data will give additional clarity to the expectation that the Fed will temper its aggression in regard to rate hikes.

Indian rupee closed marginally lower at 82.73 per dollar on Tuesday versus Friday's close of 82.68.

Indian benchmark indices broke seven day winning streak and ended lower with Nifty below 17700 on October 25.

At Close, the Sensex was down 287.70 points or 0.48% at 59,543.96, and the Nifty was down 74.50 points or 0.42% at 17,656.30. About 1378 shares have advanced, 1951 shares declined, and 106 shares are unchanged.

Nestle India, HUL, Kotak Mahindra Bank, Bajaj Finserv and Britannia Industries were among the top Nifty losers, while gainers included Tech Mahindra, Maruti Suzuki, JSW Steel, Larsen & Toubro and Eicher Motors.

Among sectors, PSU Bank index added 3.5 percent and Capital Goods & Auto indices rose 1 percent each, while FMCG index down 1 percent.

BSE midcap index rose 0.4 percent and smallcap indices shed 0.3 percent.

Jefferies has kept buy rating on HDFC Life Insurance Company and cut target price to Rs 680 from Rs 720 per share.

The pre-merger VNB at 11% YoY, a tad ahead of estimate. APE growth weak at 4%, but margin expanded with better premium mix.

The merger with Exide Life lifts APE by 8% & EV by 9%, but H1 margin falls to 26%.

Company plans to bring post-merger margin back to pre-merger levels this year, reported CNBC-TV18.

HDFC Life Insurance Company was quoting at Rs 532.35, down Rs 9.25, or 1.71 percent.

We expect ROE/ ROA to reach 16.5%/ 1.8% by FY24E from 12.0%/ 1.2%, respectively in FY22, led by consistent performance. We have factored CAGR of 16.7% in advances, 22.8% in NII, 23.3% in PPOP, and 36.8% in PAT over FY22-24E, driven by strong trends in business momentum & improving operating performance.

We revise our target price to Rs 1,120 per share (earlier Rs 936), applying 2.2x P/ABV multiple to an adjusted book value of Rs 509.5. This implies an upside of 23.2% over the CMP. We maintain our rating on the share of Axis Bank at “BUY”.

Research firm Nomura has maintained reduce rating on JSW Steel with a target at Rs 570 per share.

The results were impacted by higher than estimated effect of raw material costs.

The margin may improve from Q3, while steel prices may remain under pressure.

Nomura cut FY23/FY24 EBITDA estimates by 21%/5% to factor in lower steel prices, reported CNBC-TV18.