Closing Bell: Market nosedives; Nifty below 24,350, Sensex down 1,064 points

Indian equity indices ended lower on second day on December 17 with Nifty below 24,350. At close, the Sensex was down 1,064.12 points or 1.30 percent at 80,684.45, and the Nifty was down 332.25 points or 1.35 percent at 24,336.

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Nifty slipped sharply following the formation of a Harami pattern on the daily timeframe. The index has fallen below the 21-EMA, indicating a rise in bearish bets in the market. Additionally, the indicator is in a bearish crossover, further supporting the negative sentiment.

The short-term outlook remains weak, with the potential for a decline towards 24,200, where an initial round of support is expected. A meaningful recovery might be seen if Nifty does not break decisively below 24,200.

Markets remained under pressure and ended the session with a loss of nearly one and a half percent, reflecting weak sentiment. After an initial dip, the Nifty witnessed a gradual decline throughout the day and eventually closed near its intraday low at 24,336. All sectors came under selling pressure, with metals, autos, and energy stocks taking the biggest hit. While the broader indices also ended in the red, their losses were comparatively moderate.

The large-cap segment bore the brunt of the selling pressure, while the broader indices displayed relative resilience. This trend highlights a renewed selling spree by Foreign Institutional Investors (FIIs) ahead of the US Federal Reserve meeting. Moving forward, a decisive break below the 24,300 mark could hinder the recovery and potentially drag the index toward 24,000. In this cautious market environment, traders are advised to adopt a hedged strategy and wait for clarity.

After showing minor weakness amidst a range movement on Monday, Nifty slipped into a sharp weakness on Tuesday and closed the day lower by 332 points. After opening with a negative note, the market continued to slide down for the better part of the session. Minor intraday upside recoveries have been used for sell on rise and Nifty finally closed at the lows.

A long bear candle was formed on the daily chart, that has almost erased the gains made on Friday. Technically this market action is indicating a lack of strength to sustain the upside bounce.

The positive chart pattern like higher tops and bottoms is still intact as per daily chart and the lower support of 24200-24000 is going to be crucial. If Nifty manages to hold above 24200-24000 levels in the next few sessions, then there is a possibility of sizable upside bounce in the market. Any failure to hold on a said support could possibly bring intense selling pressure in the market. Immediate resistance is at 24500 levels.

Today, the benchmark indices continued profit booking at higher levels. The Nifty ends 332 points lower, while the Sensex dropped 1064 points. Among sectors, almost all the major sectoral indices registered profit booking at higher levels, but the PSU Bank index lost the most, shedding 1.89 percent. Technically, after a weak open, the market faced selling pressure throughout the day. A bearish candle formed on the daily charts, closing below 24,500/81200, indicating further weakness from the current levels.

We are of the view that the current market texture is weak, but a fresh sell-off is possible only after the dismissal of 24,275/80500. Below this level, the market could slip to 24,200-24125/80200-80000. On the other hand, above 24,400/81000, we could expect a pullback rally up to 24,500-24,525/81200-81300.

Widespread pessimism prevails across all sectors ahead of key policy decisions from the US Fed, BoJ, and BoE. While the market has already factored in a 25bps cut from the US Fed, it remains vigilant for any hawkish signals. The BoJ and BoE are largely expected to maintain their current rates for the year. Concurrently, the INR has depreciated to an all-time low, and a record-high trade deficit is exacerbating the pressure. FII outflows persist due to rising US bond yields and a strengthening dollar, further contributing to the prevailing pessimism.

While weak Asian cues weighed on the market sentiment, the record high trade deficit in November pushed the rupee to a new low which caused investors to run for cover triggering panic selling in domestic equities. We expect the sentiment to remain cautious with a weak bias over the next few days as investors await the US FOMC meeting outcome.

Today's trade was dominated by Bears as right after a tepid opening, the Index was seen compounding its losses before settling the trade at 24,336 with a loss of 332.25 points. Except for Media, all the other sectors ended in red where PSU Bank and Metal were major laggards. In the later part of the trading session, Mid and Smallcaps also gave up their gains but managed to outperform the Frontline Index.

With a strong bearish candle, the Index has breached the range of 24,500-24,800 on the downside; however, the zone of 24,270-24,300 is a strong support base. In the case of a breakdown, the next support is positioned at 24,100 whereas, the higher side is capped to 24,600.

Indian rupee ended marginally lower at 84.90 per dollar on Tuesday versus Monday's close of 84.87.

Indian equity indices ended lower on second day on December 17 with Nifty below 24,350.

At close, the Sensex was down 1,064.12 points or 1.30 percent at 80,684.45, and the Nifty was down 332.25 points or 1.35 percent at 24,336. About 1497 shares advanced, 2360 shares declined, and 85 shares unchanged.

Shriram Finance, Bharti Airtel, Grasim Industries, Hero MotoCorp and JSW Steel were top losers on the Nifty, while the only gainer was Cipla.

All the sectoral indices ended in the red with auto, bank, energy, metal, oil & gas down 1 percent each.

BSE Midcap and smallcap indices were down 0.5 percent each.

#1 IndiGo's pace of new aircraft deliveries has picked up in past few months

#2 Air India’s new aircraft deliveries has slowed down in last few months

#3 Deliveries could sharply slow further in 2025 for Air India

#4 Slower delivery will cap overall supply growth for sector

#5 Both IndiGo & Air India seem to be adding higher flights on international routes

#6 International routes addition is aiding domestic loads/yields

#7 Normalising cost curve, scale up of new digital initiatives are key drivers for IndiGo in next year

The company has entered into a binding term sheet on December 17, 2024 with JSW Green Energy One Ltd. & JSW Green Energy Seven to supply hybrid renewable power of 70 MW Contracted Demand (Solar capacity of 50 MW AC & Wind capacity of 100 MW).

QIB – 10.06 times

NII - 18.09 times

Retail – 8.28 times

Employee - 16.87 times

Overall – 11.93 times

Company subsidiary Svaksha Distillery has received consent to establish a 75 KLPD Bio-Diesel plant along with an oil extraction plant at its Kharagpur unit with an estimated project cost of Rs 150 crore.

Also, it has received environmental clearance (EC) to establish another 150 KLPD ethanol manufacturing plant at its Bathinda distillery, work for the same will begin in coming months. Additionally, the work on 75 KLPD Bio-Diesel plant at Bathinda distillery is going on in full swing.

#1 Project a 14 percent revenue CAGR over FY24-FY27 with EBITDA margin expanding to 8.6 percent by FY27

#2 Revenue & EBITDA margin led by operating leverage & improved B2B partial truckload margin

#3 Given company’s rapid growth, expect premium valuations (over traditional logistics players) to sustain

#1 Build-in a 23 percent+ EBITDA CAGR resulting in steady cash generation

#2 Trading at a 21x/17x FY26/27 EV/EBITDA, 38 percent discount to average listed peers

#3 Company’s CDMO business – its largest revenue segment – is key to its outperformance

#4 Traction gained through newly commercialised molecules will help the CDMO segment

#5 Recovery expected in US biotech sector starting in H2FY25

#6 CDMO segment may achieve 17 percent CAGR over the next 3 years

Container freight station (CFS) volumes in November fell by 4 percent compared to the year-ago period, but rose by 1 percent compared to the previous month.

The passenger traffic in November increased by 14 percent YoY to 1.12 crore, with domestic passenger traffic up 14.3 percent and international passenger traffic up 11.3 percent. Aircraft movements during the month rose by 8 percent YoY to 69,540.

The company has received a Letter of Acceptance (LOA) from a reputed system integrator for the supply, installation, and commissioning of 5,000 solar pumps in Maharashtra. Valued at Rs 90 crore (excluding taxes), the LOA comprises 3HP, 5HP, and 7HP solar pump systems and is slated for completion in FY25-26.

The company's units, Nanglamal Sugar Complex and Mawana Sugar Works in UP, have received notices from the Anti-Corruption Branch, Government of National Capital Territory of Delhi, seeking information regarding transactions conducted by an agent of the company in the purchase of sugar.

Life Insurance Corporation of India has bought a 0.03 percent stake in SRF via an open market transaction on December 13, increasing its shareholding to 5 percent, up from 4.97 percent earlier.

The company, through its subsidiaries, has signed a definitive agreement to acquire 100 percent shareholding in Applied Value Technologies Inc and its affiliates, Applied Value Technologies BV and Applied Value Technologies Pte, for $40 million.

Shares of Quess Corp are higher by 8% after Antique Broking initiated coverage with a Buy recommendation and a target price of Rs 1,000 per share on improved growth outlook.

Quess Corp shares are rising on very strong volumes to climb above 20 and 50-DMA, clocking its best day in over 12 weeks. The target price assigned implies a 50% upside from the Monday's closing price.

The Antique Broking note said the growth momentum is expected to continue for Quess Corp as the company is set to benefit from strong hiring trends across segments. "Increased formalisation of the economy driven by labour reforms, rise in the gig economy, capex push through PLI schemes, higher thrust on manufacturing driven by China+1 strategy, lower staffing penetration and opportunities in Tier-II cities are the key growth driver," the note said.

Quess is also witnessing strong momentum in the BFSI, manufacturing and telecom space due to rapid urbanisation and growth of Global Capacity Centres in India, said Antique, adding that its revenue could rise by a 12-14% CAGR over FY24-27.

Pramod Nair has resigned as Chief Financial Officer of the company, effective January 10, 2025, to pursue opportunities outside the company.

Bitcoin's record rally topped $107,000 on Monday after President-elect Donald Trumpreiterated that he plans to create a U.S. bitcoin strategic reserve similar to its strategic oil reserve, stoking the enthusiasm of crypto bulls.

Sai Life Sciences received decent demand from all sets of investor’s especially from QIB’s who bid 29.78x times to the allocated portion while retail and NII remained less interested may be due to expensive valuations along with high portions of OFS in the offer.

Considering improving market sentiments and all other parameters the company can list with a very decent listing gain around ~10% to its issue price. Allotted conservative investors can think of booking profits above 15%. While long term investors should consider the company to 'hold it for long term' despite knowing short term volatility & risk in the markets. For non-allotted investors, we advise to accumulate if we get dips post listing due to profit booking attempts but for long term only.

Expected ~10% listing is justified as we believe the shift of global dynamics due to China plus one and Biosecure act could bring significant opportunities for Indian CDMO players in the coming future. Hence, with all attributes we recommend only risk taking investors to “HOLD” the Sai Life Sciences Ltd IPO with risk for long term only.

SEBI believes that the disclosure of financial information and business transactions of the company have been dealt with in a manner which may be detrimental to the interest of investors or the securities markets; and or an intermediary or a person associated with the securities market.

#1 FDA approval for Lisdexamfetamine Dimesylate tablets

The Income Tax Appellate Tribunal (ITAT) has pronounced an order in favour of the company regarding the denial of depreciation on assets received under merger, disallowance of provision for expenses, amortization of ARO, provision for SLA credit, etc.

This will result in a reduction of Rs 3,500 crore in contingent liabilities.

The Sensex was down 582.13 points or 0.71 percent at 81,166.44, and the Nifty was down 182.10 points or 0.74 percent at 24,486.15. About 1643 shares advanced, 1726 shares declined, and 101 shares unchanged.

The company's subsidiary, Care Health Insurance, has received a letter of advice and a show-cause notice from the Insurance Regulatory and Development Authority of India (IRDAI) based on an inspection carried out during August 30 and September 9, 2021. Care Health is in the process of initiating corrective actions as advised and preparing a reply to the show-cause notice.

#1 After Capco (2021) & Rizing (2022) acquisition, see applied value tech acquisition being relatively small

#2 See the acquisition supporting more of capability boost & adding some marquee clients to portfolio

#3 Given small scale, see acquisition having a limited impact on financials in FY25/FY26