Closing Bell: Sensex gains 280 pts, Nifty at 24,700; financials rally

Indian benchmark indices ended higher on August 20 with Nifty above 24,650. The Sensex was up 378.18 points or 0.47 percent at 80,802.86, and the Nifty was up 126.10 points or 0.51 percent at 24,698.80.

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The Nifty moved above 24,700 after sustaining above 24,600. The trend is likely to remain strong as long as it stays above the 24,600-24,650 range. A decisive fall below 24,600 might trigger a reversal of the current uptrend. On the higher end, the Nifty might move towards 24,840-24,860.

The domestic market started the session with a strong surge, buoyed by positive global sentiment amidst Israel-Hamas ceasefire talks and diminishing US recession fears due to recent favourable data. Concurrently, easing geopolitical risks and weak China demand have led to a decline in crude prices, benefiting the domestic economy. Meanwhile, inflationary pressure in Japan and the appreciating Yen cautioned the rally. This week’s Japan inflation data and FOMC minutes will provide insights into future interest rate trajectories and market trends.

After an initial uptick in the morning trade, the Index remained rangebound for the rest of the day and settled at 24,698.85 with gains of 126.20 points. Barring FMCG and Media, all other sectors ended with gains where Banking indices (BankNifty+PSU Banks) were the top performers followed by IT.

Divergence was seen in the Broader market performance where Midcaps outperformed while Smallcaps moved more or less in tandem with the Benchmark Index.

With a bullish candle, the Index has filled its bearish gap zone and is now heading towards 24,870 (target of range breakout) with downside being shifted higher to 24,590.

Indian rupee ended 8 paise higher at 83.79 per dollar on Tuesday versus Monday's close of 83.87.

Indian benchmark indices ended higher on August 20 with Nifty at 24,700.

The Sensex was up 378.18 points or 0.47 percent at 80,802.86, and the Nifty was up 126.10 points or 0.51 percent at 24,698.80. About 2048 shares advanced, 1391 shares declined, and 81 shares unchanged.

Biggest Nifty gainers included SBI Life Insurance, HDFC Life, Bajaj Finserv, Shriram Finance and IndusInd Bank, while losers were ONGC, Bharti Airtel, Adani Enterprises, Cipla and Apollo Hospitals.

Except FMCG, all other sectoral indices ended in the green with bank, healthcare, IT, metal, power up 0.5-1 percent.

The BSE midcap index rose 1 percent while smallcap index added 0.5 percent.

#1 A tougher terrain ahead for SUVs; tractors treading well

#2 If FY24 was year of SUVs for company, FY25 is expected to see better momentum in tractor segment

#3 SUV demand for company has moderated versus earlier expectations even as company has expanded capacity

#4 Cut volume estimates for company’s SUV segment, resulting in slight cuts in earnings estimates

#5 View on tractors remains positive

#6 YTD volume growth is 6 percent (including exports)

#7 In the domestic market, company has gained market share

H.G. Infra Engineering has been declared as L-l bidder by the Ministry of Road Transport and Highways (MoRTH) for up-gradation of existing 6 Lane road including elevated corridor as per site requirements from km 0/00 to km 10/170 of NH 47 (Narol Junction to Sarkhej Junction) in the State of Gujrat on Hybrid Annuity Mode. The bid project coat is Rs 781.11 crore.

#1 Company is cyclical growth champion; beneficiary long-term electrification growth

#2 Significant room to grow TAM revenue share; FMEG consumer pull is key

#3 Better-than-expected domestic volume growth is key near-term trigger

#4 Domestic market share gains & an export ramp-up are key near-term triggers

#1 Company only pure play on cable & wires & consistent earnings compounder

#2 KEI offers multiple triggers including growth for C&W to sustain for a longer period

#3 Company has scope for market share gains in branded housing wires and cables

#4 Company has optionality to enter adjacent electrical segment (switches & switchgears)

#6 Company increased capex in FY24 to Rs 400 crore (4x the FY18-23 average)

#7 Expect capex to be Rs 700 crore annually in FY25-27

#8 Capex to drive topline and EBITDA CAGRs of 22 percent and 31 percent, respectively

#1 Company appoints Shiv Walia as new CFO of the company

#2 Shiv Walia has been with company since Apr’98 & has over 3 decades of experience

#3 Company has generally seen relatively low attrition at senior management level in past

#4 Departure of current CFO comes as a negative surprise considering long & successful tenure at company

#5 Think such an internal appointment should help make transition smooth

#6 Such an internal appointment shouldn’t become an area of concern for investors

#1 Indian railways plans to procure 90,000 wagons by CY25

#2 Company’s capacity enhancement (freight + passenger) would help leverage opportunities

#3 Focus on backward integration: forged wheels and sub-components for coaches

#4 Adding capabilities on propulsion manufacturing, to target exports as well

The board of directors of Tech Mahindra at its meeting held on August 20 , 2024 approved sale of land admeasuring approx. 103 acres and buildings admeasuring built-up area of approx. 1,261,149 sq. ft situated at Bahadurpally village, Dundigal Gandimaisamma mandal (earlier Quthbullahpur mandal), Medchal-Malkajgiri district (earlier Ranga Reddy district), Hyderabad, Telangana to Mahindra University, subject to requisite regulatory approvals.

Indian Rupee rose to the highest levels in nearly two and half weeks on a weak US Dollar and positive domestic markets. A decline in crude oil prices also supported the Rupee. However, FII outflows capped sharp gains. US Dollar declined to a seven-month low on rising odds of a rate cut by the Fed in September.

We expect Rupee to trade with a slight positive bias on rise in risk appetite in global markets and a weak US Dollar. Softening of crude oil prices may also support the Rupee. However, geopolitical tension in the Middle East may cap sharp upside.

Investors may remain cautious ahead of PMI data from US and Fed Chair Powell’s speech at Jackson Hole Symposium for any cues on rate cuts by the central bank. USDINR spot price is expected to trade in a range of Rs 83.50 to Rs 84.

The Sensex was up 468.32 points or 0.58 percent at 80,893.00, and the Nifty was up 151.80 points or 0.62 percent at 24,724.50.

#1 Company receives RBI approval to set up AMC subsidiary

#2 Company can now generate revenue as a ‘manufacturer’ of mutual funds

IRB Infrastructure Developers, AIA Engineering, Apar Industries, Balkrishna Industries, Century Enka, Coral India Finance & Housing, Indo Borax & Chemicals, JK Paper, Dr Lal PathLabs, Mitsu Chem Plast, National Peroxide, Omnitex Industries, Phoenix Mills, PI Industries, Rain Industries, Ratnamani Metals & Tubes, Sanghvi Movers, South Indian Bank, Sun TV Network, Titagarh Rail Systems

The company has received approval from the Board of Directors for the issuance of non-convertible debentures (NCDs) worth Rs 100 crore (base issue size) with an option to retain oversubscription up to Rs 100 crore (green shoe option), aggregating up to Rs 200 crore on a private placement basis.

The Board of Directors of the company will meet on August 22 to consider the proposal for the buyback of equity shares

Although the benchmark domestic indices started the day with positive momentum, still they are facing significant resistance levels that could challenge further gains. The Nifty index is currently stabilizing around its key Call levels of 24,500 and 24,600. If it manages to stay above 24,600, it could trigger short covering and potentially drive the index up to around 24,800.

The 24,600 Call strike has significant open interest of about 53 lakh shares, showing strong market activity. On the Put side, the 24,500 strike also has notable open interest with approximately 51 lakh shares.

The Bank Nifty has been somewhat lackluster due to selling pressure on major private sector banks, which has capped its gains. We expect the Bank Nifty to remain within a broader range of 50,300 to 51,000. Overall, market sentiment remains optimistic, making a "buy on dips" strategy still a good approach.

The Veefin Group has announced the appointment of Mr. Shantanu Bairagi as the Chief Executive Officer of Veefin Capital, a subsidiary of the Group.

The board of directors of Hindustan Zinc at its meeting held on August 20, 2024, has considered and approved the second interim dividend of Rs 19 per equity share i.e. 950% on face value of Rs 2 per equity share for the Financial Year 2024-25 amounting to Rs 8028.11 crore.

#1 3 OMCs have outperformed broader markets YTD by 17-37 percent

#2 Most of the outperformance was concentrated at start of 2024

#3 Last 6 months underperformance at -9 percent to -21 percent

#4 Underperformance is due to soft GRMs, weak marketing margin post fuel price cut

#5 Believe all these factors resulting to underperformance till now are now reversing

#1 Company's 1Q consolidated performance was in line with expectations, driven by favorable pricing and lower input costs

#2 Novelis also witnessed decent performance

#3 Going forward, the cost of production in the aluminum business is expected to be under control, which would keep margins strong

#4 Novelis would continue to see margin improvement across FY25 and FY26

#5 The ongoing capex in Novelis would establish company as the global leader in beverage cans and automotive FRP segments

#6 The capex is likely to be completed within the revised timeline, and there will be no further changes in cost estimates

IDBI Bank announced enhanced interest rates on the Utsav Fixed Deposit scheme for a limited period. The Bank has increased the interest rates on special tenures of 444 days and 375 days, now offering a peak rate of 7.85% and 7.75% per annum.

#1 A tougher terrain ahead for SUVs; tractors treading well

#2 If FY24 was year of SUVs for company, FY25 is expected to see better momentum in tractor segment

#3 SUV demand for company has moderated versus earlier expectations even as company has expanded capacity

#4 Cut volume estimates for company’s SUV segment, resulting in slight cuts in earnings estimates

#5 View on tractors remains positive

#6 YTD volume growth is 6 percent (including exports)

#7 In the domestic market, company has gained market share

#1 The state-of-the-art innovation hub and research centre will enable enterprises to explore the latest advancements in technology

#2 TCS Pace Studios are tailored for growth markets with vibrant innovation ecosystems

#1 LCL volume for the July 2024 stood at 818’000 cubic meters similar to its highest ever monthly volume which was recorded in August 2022.

#2 This represents an increase of 6 percent as compared to previous month and 5 percent as compared to July 2023

#3 Volumes have steadily increased on the back of improved global trade and company’s growth initiatives

Tata Consultancy Services (TCS) launched the latest TCS Pace Studio in Stockholm, Sweden to offer its customers in the Nordic region exclusive access to its innovation ecosystem.

The state-of-the-art innovation hub and research centre will enable enterprises to explore the latest advancements in technology and deploy them at scale to accelerate their digital transformation journeys.

The Sensex was up 346.18 points or 0.43 percent at 80,770.86, and the Nifty was up 113.30 points or 0.46 percent at 24,686.

#1 Company is cyclical growth champion; beneficiary long-term electrification growth

#2 Significant room to grow TAM revenue share; FMEG consumer pull is key

#3 Better-than-expected domestic volume growth is key near-term trigger

#4 Domestic market share gains & an export ramp-up are key near-term triggers

The pharmaceutical company has received prequalification (PQ) approval from the World Health Organization (WHO) for Albendazole, an active pharmaceutical ingredient (API). This is in partnership with Mepro Pharmaceuticals. Albendazole is a vital medication used to treat a range of parasitic infections.

Gold held steady near its record high on Tuesday as investors awaited U.S. Federal Reserve minutes and Chair Jerome Powell's speech for indications on how much the central bank will cut rates this year.

Spot gold edged 0.2% higher to $2,500.08 per ounce, trading slightly below an all-time high of $2,509.65 hit on Friday. U.S. gold futures rose 0.1% to $2,537.70.

With eight straight days of gains the US market is sending positive signals which can keep this global rally going. The Fed chief Powell’s comments at Jackson Hole this Friday will be keenly watched by the markets. The likely scenario is a 25 bp rate cut by the Fed in September followed by two more rate cuts this year. This can continue to support the equity markets globally and in India too.

The decline in Brent crude below $78 is a macro positive for India. At the micro level this can lead to mild rally in stocks of companies that use crude as input such as paints, adhesives and tyres.

FIIs may continue to sell in India since other emerging market valuations are relatively attractive and, therefore, the largecap financials where FIIs hold large stakes may continue to remain under pressure. Paradoxically, financials are the most attractive segment from the valuation perspective even though the struggle for deposits is keeping the sentiments negative for this segment. When the scenario changes there is a possibility of a sharp up move in financials.

The Reserve Bank of India has given its approval to IndusInd for setting up a wholly owned subsidiary to undertake the asset management business of mutual funds, along with infusing equity capital into the said asset management subsidiary.

The automobile company has made a provision of Rs 211 crore on deferred tax created on investment income in Q2FY25, due to the withdrawal of the indexation benefit and a change in the tax rate.

The company says the provision amount of Rs 211 crore is below the materiality threshold as stipulated in Regulation 30 of the Listing Regulations, 2015.

The company has received approval from the Board of Directors for raising funds up to Rs 600 crore via one or more qualified institutions placements (QIPs), a further public issue, a rights issue, or through any other permissible mode.