Closing Bell: Sensex gains 302 pts, Nifty around 19,850; PSU Banks outperform

Taking Stock: Market closes near day's high; Nifty near 19,850, Sensex rises 302 points

Biggest gainers on the Nifty included NTPC, Bajaj Finance, IndusInd Bank, UltraTech Cement and Bajaj Finserv, while losers were Hindalco Industries, Bajaj Auto, Hero MotoCorp, TCS and Maruti Suzuki... Read More

Markets remained range bound but finally ended around the day’s high, in continuation of the prevailing uptrend. Meanwhile, a mixed trend on the sectoral front kept the traders busy wherein energy, pharma and banking posted modest gains while auto and IT traded subdued. Besides, the broader indices showed resilience and gained over half a percent each.

The supportive US markets combined with noticeable buying interest across sectors are helping the index to inch higher with every passing day. We feel the focus should be more on stock selection now citing overbought reading in the index, which may result in consolidation ahead.

The Nifty witnessed consolidation for the most part of the day. It was during the final hour of trade that the action picked up and the Nifty closed with a handsome gain of ~84 points. On the daily chart, we can observe that the Nifty has consolidated between 19700 – 19850 in the past couple of trading sessions. Today it tested the lower end of that range and witnessed buying interest indicating that it is a strong support, and the floor is set for the next leg of up move.

The up move can target levels of 19964 – 20000. The daily and the hourly momentum indicator is providing divergent signals which could lead to a short-term consolidation however, the overall structure seems to be turning in the favor of the bulls and hence we shall continue to maintain a positive outlook on the index. In terms of levels, 19740 – 19700 shall act as a crucial support zone while 19964 – 20000 shall act as an immediate hurdle zone.

Bank Nifty consolidated within the range of the previous trading session (45906 – 45281) and has thus formed an Inside bar pattern which makes the extremes of the range crucial levels from a short-term perspective. A breach of the extremes shall lead to a move in that particular direction. We expect the breakout to be on the upside and expect the Nifty to target levels of 46500

Market's record breaking spree continued on Dalal Street, as we are in the midst of a strong bull run backed by robust foreign fund inflows, strong growth prospects, even monsoon spread out and stable corporate earnings so far, which have increased the appetite for local stocks. Technically, the Nifty got support near 19725 and bounced back sharply.

The index has formed a higher bottom formation on intraday charts which is indicating further uptrend from the current levels. As long as the index is holding 19725, the positive sentiment is likely to continue. Above the same, the market could rally till 19950-19975. On the flip side, dismissal of 19725 could trigger short term correction. Below the same, we could expect a one quick correction till 19650-19615.

Despite the current high levels, domestic investors have hardly lost confidence in the Indian economy. It is experiencing a broad based rally strengthened by encouraging domestic macroeconomic data and sustained inflows from FIIs. Although there was some initial profit booking today, the market confidently recovered, with buying observed in all major sectors except auto and IT. Additionally, the global market is providing comfort to the rally, in anticipation of moderation in global inflation.

In line with weak regional currencies, the rupee depreciated, after two days of gains as crude oil prices rebounded. The dollar index also recovered as traders assessed the U.S. rate outlook ahead of next week’s policy decision.

In the near term, spot USDINR is expected to trade within 82 to 82.30.

Indian rupee closed marginally lower at 82.09 per dollar versus previous close of 82.04.

Benchmark indices ended higher on July 19 with Nifty around 19,850 amid buying seen across the sectors.

At close, the Sensex was up 302.30 points or 0.45% at 67,097.44, and the Nifty was up 83.90 points or 0.42% at 19,833.20. About 1961 shares advanced, 1360 shares declined, and 119 shares unchanged.

Biggest gainers on the Nifty included NTPC, Bajaj Finance, IndusInd Bank, UltraTech Cement and Bajaj Finserv, while losers were Hindalco Industries, Bajaj Auto, Hero MotoCorp, TCS and Maruti Suzuki.

All sectors ended in the green with PSU Bank up 2 percent, while power, healthcare and oil & gas up 0.5 percent each.

BSE midcap index and smallcap indices added 0.6 percent each.

The current uptrend in the Nifty is undeniably strong, and there is a possibility that it may surpass the 20000 mark by the end of this month. However, it's worth noting that certain short-term technical and derivative indicators are approaching overbought levels, which suggests that a minor correction or consolidation could occur. In this context, it is important to consider that 19800 is a critical resistance level that needs to be overcome for further upside potential. If the Nifty manages to sustain above this level, it could potentially reach 20000 and even 20200. Conversely, on the downside, 19500 is a significant support level that is likely to provide strong backing in case of any downward movement.

Following a robust surge in IT stocks from lower levels, there is a possibility that HDFC Bank, ICICI Bank, and LT could take leadership and gain momentum in the near future. These stocks have the potential to catch up and make significant strides.

The current market conditions appear to be more favorable for buy-and-hold traders rather than day traders. Chasing after a rapid upward movement can be challenging, as it may lead to missed opportunities or increased risk. However, it is important to maintain a bullish perspective as we are currently in a long-term structural bull market. In such a market, every dip or consolidation can be seen as a potential buying opportunity. Investors with a long-term outlook should consider utilizing these moments of temporary price declines to accumulate positions in stocks or other assets they believe in. By adopting a buy-and-hold strategy, investors can take advantage of the overall upward trend and potentially benefit from the market's long-term growth potential.

-Overweight rating, target at Rs 1,550 per share
-PAT missed estimates due to a Rs 35 crore catastrophic loss & higher provision for unexpired risk
-Management maintained its combined ratio guidance of 102 percent for FY25
-Commercial lines (fire, marine & engineering) saw a higher loss ratio YoY
-Health business growth trajectory likely to sustain

-Neutral rating, target raised to Rs 1,250 per share
-Reserve drawdown drives an in-line result
-Loan growth at 21.5 percent YoY was broad-based, balancesheet growth at 14 percent YoY
-Credit cost beat partly driven by contingent drawdown
-NIMs flat QoQ, deposit rates expected to peak in Q2

Indian Rupee depreciated on a strong Dollar and surge in crude oil prices. Positive domestic equities and FII inflows supported the Rupee. US Dollar surged as retail sales data showed some resilience in the US economy and a sharp decline in Pound on lower-than-expected inflation. However, disappointing industrial production and capacity utilization in the US capped sharp gains in the greenback.

We expect Rupee to trade with a slight negative bias on the underlying strength of the Dollar. Rate hike expectations by US Federal Reserve in its upcoming FOMC meeting next week may also support the Dollar. However, positive global markets may support Rupee at lower levels. Traders may take cues from housing market data from the US. We expect the USDINR spot to trade between 81.70 to 82.60 in the near term.

The company has reported 3.4 percent fall in its Q1 net profit at Rs 70.1 crore against Rs 73 crore and revenue was up 2.3% at Rs 725.3 crore versus Rs 709.2 crore, QoQ.