Closing Bell: Sensex down 434 pts, Nifty below 22,100; realty, PSU Banks outperform

Indian equity indices snapped 6-day winning run and ended lower on February 21 with Nifty below 22,100. At close, the Sensex was down 434.31 points or 0.59 percent at 72,623.09, and the Nifty was down 142.00 points or 0.64 percent at 22,055.

We wrap up today's edition of the Moneycontrol live market blog, and will be back tomorrow morning with all the latest updates and alerts. Please visit https://www.moneycontrol.com/markets/global-indices/ for all the global market action.

We believe GPT Healthcare Ltd gives investors a favourable investment opportunity to invest in a regional focused prominent healthcare provider in Eastern India. We like the company's strategic focus on the regional eastern Indian healthcare market, operating in three cities with dense population, giving healthy growth in business and services. Their established presence and multiple healthcare delivery verticals position the company as a one-stop destination for patients' needs in respective micro markets. We also believe in the company's diverse range of healthcare services ensuring quality healthcare services across various specialties and which also caters to different economic segments that would enhance their competitiveness and market penetration.

Looking at the financials the revenue from operations saw a modest increase of 7% between FY2022 and FY2023, while its profit after tax witnessed a slight drop of 6.37% during the same period. On valuation front at the upper band of Rs 186, the issue is asking for a Market Cap of Rs 1,526 crore. Based on the annualized FY2024 earnings and fully diluted post-IPO paid-up capital, the company is asking a P/E of 32.5x which looks fully priced offer. Given its healthy regional presence in Eastern India and strategically situated hospitals offering a comprehensive array of medical specialties, GPT Healthcare is positioned to seize opportunities in underserved healthcare markets and strategically growing in the adjacent markets with asset-light business models like Ranchi.

Investors should also look at IPO offers which come with 100% OFS issue which is an area of concern for new investors. Hence, considering all parameters we recommend investors to “SUBSCRIBE” with risk in this IPO for long term perspective only while conservative investors can wait and watch the space post listing.

The BankNifty index experienced a volatile trading session during the weekly expiry and encountered resistance around the 47300 levels. Currently stuck in a broad range of 46500-47500, the index faces limitations on further upside until it surpasses the 47300 mark. The immediate support stands at 46800, and a breach below this level could intensify selling pressure, potentially pushing the index towards 46500.

The Nifty opened on a positive note and consolidated in a narrow range during the first half. Selling pressure emerged during the second half and Nifty closed in the red down ~142 points. On the daily charts the Nifty has formed an Engulfing Bear candle stick pattern which has bearish implications and until today’s high of 22249 is not taken out we can expect consolidation in the near term. On the downside, the Nifty has crucial support zone placed at 21974 – 21930 which coincides with the 38.2% Fibonacci retracement level (21974) and the gap area formed on the 16th February. We believe that the index is in the process of retracing the rise it has witnessed from 21530 to 22249.

Bank Nifty fell less compared to Nifty which was down ~75 points. The Bank Nifty faced resistance from the gap area formed on the 17th Jan in the range 47200 – 48000. We expect it to retrace the rise it has witnessed from 44630 – 47364. Crucial Fibonacci retracement levels are placed at 46720 – 46320.

The Nifty has formed a bearish engulfing pattern on the daily chart, indicating a potential pause in the ongoing rally. The momentum indicator RSI is showing a bearish crossover, signaling weakness in the near term. Immediate support is positioned at 22,000; a decisive drop below this level could lead the index towards 21,700. On the upside, resistance is identified at 22,160.

After registering a record level in yesterday's trade, round of correction was witnessed in the Indian equities, especially in the broader markets which dented the market sentiments as the Index kept compounding its losses in the 2nd half of trading session to settle at 22,055.05 with a loss of 141.90 points.

Among sectoral performance, Realty and PSU Banking were the top performers while Media and Energy were the major laggards. With a loss of 1.25% & 1.04%; Mid and Smallcaps underperformed the Benchmark Index.

At record levels, the Index has formed a bearish candlestick pattern known as Dark Cloud Cover with a probable divergence in RSI which suggests short-term weakness in the markets where the higher side is capped at 22,250 while the downside seems to be protected at 21,930.

The Indian market is facing stiff resistance at higher levels; the valuation of a broader index is at a significant premium, leading to an unfavourable risk reward, which influences investors to book profits.

Global markets treaded cautiously awaiting the US FED minutes, while Chinese markets were buoyed by policy interventions. Concerns lingered since investors were heavily betting on a US FED rate cut, which is put at risk by January's higher-than-expected inflation.

Indian rupee ended flat at 82.97 per dollar on Wednesday versus Tuesday's close of 82.97.

Indian equity indices snapped 6-day winning run and ended lower on February 21 with Nifty below 22,100.

At close, the Sensex was down 434.31 points or 0.59 percent at 72,623.09, and the Nifty was down 142.00 points or 0.64 percent at 22,055.00. About 1227 shares advanced, 2078 shares declined, and 69 shares unchanged.

Biggest losers on the Nifty were BPCL, Coal India, Hero MotoCorp, Power Grid Corp and NTPC, while gainers were Tata Steel, SBI, JSW Steel, Tata Consumer Products and IndusInd Bank.

On the sectoral front, except realty and PSU Bank, all other indices are trading in the red.

BSE Midcap and Smallcap indices fell 1 percent each.

The dollar steadied on Wednesday as traders awaited minutes of the Federal Reserve's latest policy meeting for further clues on the central bank's rate outlook.

Data last week showed sticky U.S. inflation, prompting investors to push back bets the Fed would start cutting rates in March. Markets are now pricing in the first cut in June, compared with March at the start of the year.

Traders are now pricing in 94 basis points (bps) worth of easing by the Fed this year.

A slim majority of economists polled by Reuters expects the Fed to cut interest rates in June.

The minutes of the Fed's latest policy meeting due later in the day will provide further clarity on the outlook for U.S. rates.

The U.S. dollar index, measuring the currency against six peers, edged 0.1% higher to 104.17, after moving 0.25% lower on Tuesday on the back of a dip in global bond yields. [US/]

The euro also dropped 0.1% to $1.0795, ahead of an euro zone consumer confidence survey due later in the day.

Information technology (IT) solutions provider Orient Technologies Ltd has filed preliminary papers with Sebi to raise funds through an Initial Public Offering (IPO). The initial share-sale is a combination of a fresh issue of Rs 120 crore and an Offer For Sale of up to 46 lakh equity shares by promoters, according to the Draft Red Herring Prospectus (DRHP) filed on Tuesday.

Those offloading shares in the OFS are — Ajay Baliram Sawant, Umesh Navnitlal Shah, Ujwal Arvind Mhatre, and Jayesh Manharlal Shah. Proceeds from the fresh issue to the tune of Rs 79.65 crore will be used for funding capital expenditure requirements, Rs 10.35 crore for the acquisition of office premises at Navi Mumbai, and a portion will also be used for general corporate purposes. Read More

-Buy call, target Rs 2,300 per share
-Company is set to launch its paint product & inaugurate highly anticipated first paint plant this months
-Company will commission 2 other plants during Q4FY24 and 3 plants in next 12-15 months
-Company has already spent nearly 60% of planned capex of Rs 10,000 crore for paint business
-Look forward to attending inaugural event this week & better understand growth outlook
-Better understand margin vs market share strategy in this extremely competitive business

Sensex Today | Nifty Information Technology index down 1.4 percent dragged by L&T Technology, Mphasis, Wipro

Aurobindo has been witnessing stronger growth in the US, driven by gRevlimid-led injectable portfolio and improvement in the base business followed by strong traction in the emerging market portfolio. The company has seen an increase in EBITDA margins over the past six quarters, which indicates stability in the product mix.

In the recent inspection of its Subsidiary Unit-3, the company has voluntarily closed its lines to maintain compliance with USFDA regulations. This closure of lines is expected to cost Aurobindo USD20 million and US2-3 million remediation costs per month.

Sharekhan believe the shutdown of lines will Impact Aurobindo’s sales and there is no surety of the lines opening in early FY2025E. Hence, downgrade the stock to hold.

At the CMP, the stock is trading at ~18x/15x its FY2025E/FY2026E EPS due to the overhang of USFDA offsetting growth in the oral solids business in the US region. We would like to ascribe a P/E of 16x to arrive at a target price (TP) of Rs 1,133.

Sensex Today | Nifty PSU Bank up 1 percent led by Bank of Baroda, SBI, Union Bank of India

Sensex Today | BSE Oil & Gas index down 2 percent dragged by BPCL, IOC, HPCL

Directs audit of processes & software of three power exchanges
Audit should be completed within a period of six months
Observed a few instances of manual entry of bids after market hours
Observed cancellation of bids after the market hours
No extension shall be allowed in the trading hours
No bids shall be accepted by the power exchanges after the trading hours
Can’t do manual entry of bids on behalf of members within or after trading hrs
Can’t do manual entry of bids on behalf of members within or after trading hours

With Dec quarter earnings now behind us, Indian markets remained broadly stable this week with Nifty consistently inching up to 22,250 levels. PSU banks continue to rally. Kotak bank announces major rejig in top management, alleviating immediate risk of management attrition. We turn slightly cautions on retail heavy banks amid rising asset quality noise, but do not expect a complete blow out. Zee continued to make headlines with regulators finding a $240mn financial discrepancy in books.

Globally, US markets soften as investors turn cautious ahead of Nvidia earnings. All eyes now on FOMC minutes and further comments from Fed officials on when would Fed start cutting interest rates - to be released tomorrow.

FIIs continued to be net sellers in the market this week while domestic funds remain buyers. We see lot of NFOs being launched / closed by domestic AMCs over last few weeks. On technical, Nifty continues to close above previous resistance zone of 22,100-22,150. Hence, we continue to watch 22,500 as the next level.

Sensex Today | Market at 3 PM

The Sensex was down 478.08 points or 0.65 percent at 72,579.32, and the Nifty was down 161.30 points or 0.73 percent at 22,035.70. About 1588 shares advanced, 1688 shares declined, and 88 shares unchanged.

Indian Rupee appreciated by 0.06% on Wednesday on weak US Dollar and a decline in crude oil prices. However, FII outflows and mixed to weak domestic markets capped sharp gains. US Dollar eased on consolidation ahead of US FOMC minutes.

We expect Rupee to trade with a slight positive bias on weak tone in US Dollar and extended decline in crude oil prices. However, risk aversion in global markets and renewed geopolitical tension in the Middle East and Red Sea may cap the upside. FII outflows may also weigh on Rupee at higher levels. Traders may watch out for FOMC minutes for further cues on interest rate outlook. USDINR spot price is expected to trade in a range of Rs 82.60 to Rs 83.20.

Crude oil prices plunge on Wednesday amid fear of demand deterioration from two of the leading energy consuming countries i.e. US and China. WTI April at $76.81 is down 0.3% during mid European session. Oil prices have been trading in range bound and some $6-$7 dollar of risk premiums embedded to it at current level, which may continue to hold prices higher in short run, but overall demand fundamentals are not favourable for rally to sustain.

The drop in consumer spending in US during December and January has somewhat dampened the investors sentiments over demand outlook. Overall crude oil market is expected to remain in surplus of above 1mbpd in Q1-2024, while China continued to struggle through its debt laden real estate market, affecting 1/5 of its GDP. We expect WTI April to trade sideways in absence of major economic data. Upside looks limited with resistance of $80.50 while downside could test the support of $74-$72. We advise trade to short the rallies.

Sensex Today | BSE Realty index up 2 percent led by Sobha, DLF, Phoenix Mills

Sensex Today | Market at 2 PM

The Sensex was down 163.85 points or 0.22 percent at 72,893.55, and the Nifty was down 47.40 points or 0.21 percent at 22,149.60. About 1630 shares advanced, 1630 shares declined, and 88 shares unchanged.

Raymond's share price rose over 7 percent on February 21, a day after the group's real estate arm Raymond Realty announced the launch of its first project outside Thane ‘The Address by GS, Bandra’.

The move followed the company’s plan for expansion beyond Thane through joint development agreements (JDAs) in the Mumbai Metropolitan Region (MMR).

"As the name suggests, this development is inspired by the tremendous success of Thane’s flagship project ‘The Address by GS’ which has emerged as Thane's bestseller in premium category and is set to be delivered two years ahead of its timeline," the company said in a release.

‘The Address by GS, Bandra’ project spreads over an area of 2.74 acres, offering a gated community in Bandra East with connectivity to locations like Bandra-Kurla Complex, and Bandra-Worli Sea link along with the rest of the city. Read More

BHEL reported topline growth, but posted a loss after tax due to higher cost of sales.

Broking house believe a pick-up in the industry segment, rising order inflow, strong pipeline, and rising government expenditure in favorable sectors are expected to drive the company’s performance in the long run. However, cost pressures, posting net loss for the third consecutive quarter and recent significant jump in the stock price indicate that the stock is trading at higher valuation.

Hence, downgrade rating to sell on the stock with a rolled forward target price of Rs 203, based on 68x FY26E adjusted EPS.

Sensex Today | CLSA View On Autos

-Vahan retail numbers for first 19 days of Feb’24 indicates slower growth for 2-wheelers for most of OEMs
-Believe 2-wheeler retail volumes will grow at mid-single digit YoY in Feb’24
-Retail volumes growth at mid-single digit YoY despite Feb’24 having 29 days vs 28 days in Feb’23
-Electric 2-wheelers volume would likely remain flat YoY in Feb’24, despite increase in discounts
-Competition is escalating in the two-wheeler segment
-Competition is especially in the electric scooters and premium motorcycle segments
-The competition will likely impact margins 

Shares of Resgen zoomed over 19 percent on February 21 after the company announced that it has received the intimation of incentives awarded under the PSI Scheme 2019 amounting to Rs 1114.62 lakh from the Maharashtra government.

The filing states that the government has conducted the due diligence and awarded the certificate which entitles the company to claim the specified annual incentive from April 1, 2022 to March 31, 2032. Read More

Oil prices regained some ground in Asian trade on Wednesday amid concerns over attacks on shipping in the Red Sea and growing expectations that cuts to U.S. interest rates will take longer than thought.

Brent crude futures rose 24 cents or 0.3% to $82.58 a barrel by 0721 GMT, while U.S. West Texas Intermediate crude futures (WTI) were up 21 cents or 0.3% at $77.25.

The Brent and WTI contracts fell 1.5% and 1.4%, respectively, from near three-week highs on Tuesday as the premium for prompt U.S. crude futures to the second-month contract more than doubled to $1.71 a barrel - its widest level in roughly four months.

Sensex Today | Nifty Media index down 3 percent dragged by Zee Entertainment, TV Today Network, Dish TV

Shares of DLF rallied over 3 percent to hit a fresh 52-week high of Rs 891.6 per share on February 21 after its wholly-owned subsidiary DLF Home Developers entered into private treaty with Axis Trustee Services and IREO Private to acquire land parcel in Gurugram for Rs 1,241 crore.

The stock of this realty major has surged over 22 percent so far this year, as against 1 percent rise in the benchmark Sensex.

DLF's arm will acquire land in Gurugram, Haryana under the provisions of SARFAESI Act and the total development potential of this land will be based on all eligible floor area ratio (FAR), which would be 7.5 million square feet.

The Sensex was up 74.94 points or 0.10 percent at 73,132.34, and the Nifty was up 20.90 points or 0.09 percent at 22,217.90. About 1616 shares advanced, 1637 shares declined, and 82 shares unchanged.

Sensex Today | JPMorgan View On Paints

-Dealer Checks: cautious demand narrative
-Margin to be challenged by need for higher (brand & price) investments
-Neutral on Asian Paints
-Believe earnings risk will keep stock rangebound in near-term despite underperformance and less demanding valuations 
-Overweight on Pidilite considering higher exposure to B2B/infra/RE demand and better positioning from a competitive standpoint

DB Realty Ltd plans to raise Rs 1,500-2,000 crore by selling shares to qualified institutional investors, two people aware of the property developer’s plans said.

The company plans to complete the fundraising, which comes after a gap of several years, in the coming weeks, depending on market conditions, the people said, requesting anonymity.

A successful fundraising could mark a turnaround for the company, once a prominent real estate developer in the Mumbai market. DB Realty’s troubles started when its promoters, Shahid Balwa and Vinod Goenka, were named as accused in the 2G spectrum allocation scam. They were later acquitted by a special CBI court in December 2017 due to a lack of substantial evidence. However, their prolonged legal battle resulted in delays in projects and lenders turning away.

The real estate developer has hired investment banks JM Financial and DAM Capital for the fundraising, the people cited above said. Read More

Tata Power Trading Company Limited (TPTCL) has signed a multi-year Power Purchase Agreement (PPA) with BluSmart for supplying green power for its e-vehicle fleet, according to an exchange filing filed by the eMobility ride-hailing service provider on February 21.

With this partnership, BluSmart, which also operates an EV charging network in Delhi NCR and Bengaluru, will now transition from zero tailpipe emissions to a zero-emissions company.

Per the PPA, TPTCL, a wholly-owned subsidiary of Tata Power, will source 30 MW solar-energy capacity from the company’s 200 MW Solar PV power plant in Rajasthan's Bikaner.

BluSmart's latest partnership with TPTCL will enable it to eliminate Scope 2 emissions from its existing 1.4 million-square-foot EV charging infrastructure and future charging hubs. Notably, it has now emerged as the first mobility player in India to transition from zero tailpipe emissions to a zero-emissions company.

The dollar fell broadly on Wednesday as it tracked a global decline in bond yields, while traders awaited minutes of the Federal Reserve's latest policy meeting due later in the day for further clues on the central bank's rate outlook.

The greenback slipped below 150 yen in Asia trade and last bought 149.97 yen, giving the Japanese currency some breathing space having been pinned near a three-month low in previous sessions.

Despite a neutral global market sentiment and slight selling from foreign institutional investors (FIIs), the domestic market remains robust, hitting a lifetime high for the second consecutive day. We anticipate Nifty to trade with a positive bias today. On the downside, significant Put strikes are observed at 22000 and 22100, expected to provide immediate support.

Looking ahead, if Bank Nifty sustains above 47200 levels, we foresee a move towards 47500 levels. Notably, the 47000 Call strike in Bank Nifty holds substantial Open Interest (OI) of around 23 lakhs shares, while the 47000 Put strike holds sizable OI of approximately 29 lakh shares. It's advisable to adopt a "buy on dips" strategy in this scenario.

Broking house reduce the FY24E/FY25E/FY26E PAT estimates by 4.3%/2.5%/1.2% respectively, as softening gas prices limit the erstwhile opportunistic advantage from LNG trading.

It exercise caution over the execution risks in renewable capacity additions, current high valuations, and the recent run-up in the price of the stock. Hence, value the stock at 2.9X P/Bk on FY26BVPS and maintain the sell rating with a target price of Rs 1,038.

Sterlite Technoogies announced its strategic partnership with Lumos. The company has been strategically engaged in co-creating fiber and optical connectivity solutions suited for Lumos’ mega ambition to build transformative 100% fiber optic internet in the mid-Atlantic region.

GOCL Corporation's promoter Hinduja Capital, Mauritius is going to reduce the shareholding in GOCL by about 1%, i.e. from the present 73.83% to about 72.83%, through bulk or block deal. This will enable the company in obtaining the necessary licenses to take up and expand the business in the defence sector. Hinduja Capital's shareholding in GOCL Corporation is considered as foreign direct investment.

Indian benchmark indices are trading flat amid mixed global cues and high volatility. For the day, experts anticipate Nifty to trade with a positive bias. On the downside, a substantial Put strike is observed at 22,000 and 22,100, which is expected to act as an immediate support area. Major gainers on the Nifty include Hindalco, JSW Steel, Tata Steel, M&M, and ICICI Bank. On the flip side, the losers are Hero MotoCorp, Infosys, TCS, Tech Mahindra, and Apollo Hospitals. READ MORE

The performance of PSU stocks has been creating a buzz, as the scrips often derisively referred to as wealth destructors generate rich returns for investors. Investment firm GQG Partners’ founder Rajiv Jain thinks PSU stocks are an attractive investment due to improved management and strong long-term growth prospects. READ MORE

Two-wheeler automobile stocks were a mixed bag in the morning trade on February 21 after global brokerage firm CLSA predicted a mid-single-digit growth in volume this month. READ MORE

Thermax has entered into a License and Technical Assistance Agreement with South Korea-based Flowtech Co, to obtain technology to manufacture poly carboxylate ether products to strengthen its construction chemicals business portfolio.

Sensex today | Market at 11 AM

The Sensex was up 22.53 points or 0.03 percent at 73,079.93, and the Nifty was up 7 points or 0.03 percent at 22,204. About 1566 shares advanced, 1606 shares declined, and 85 shares unchanged.

Fitch Ratings has affirmed Housing and Urban Development Corporation Limited's (HUDCO) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BBB-'. The Outlook is Stable, reflecting the Outlook on the Indian sovereign rating (BBB-/Stable). The rating on HUDCO's INR50 billion medium-term note (MTN) programme has also been affirmed at 'BBB-'.

Sensex Today | BSE Oil & Gas index down 0.4 percent dragged by BPCL, IOC, HPCL

-Buy call, target Rs 900 per share
-Capacity expansion to propel growth
-Scale-up through capacity expansion
-Strong Raw material linkages and cost competitiveness
-Steel demand is relatively stronger in Q4, which should help co garner better margins
-Stock trades at 5.2x FY26 EV/EBITDA

-Buy call, target raised to Rs 760 per share
-Company is at an inflexion point to monetise investments in overseas markets
-See company breaking into larger markets like Singapore/Hong Kong
-See company exploring inorganic opportunities in West
-Higher growth from international operations, AIFs & value added/analytics services should aid higher growth in FY25-26
-Raise EPS estimate by 2-4 percent
-Stronger cashflows & pragmatic view will likely anchor inorganic opportunities

Shares of Hindalco Industries were up 2.4 percent at market open on the NSE after the company’s subsidiary Novelis filed for an initial public offering (IPO) with the Securities and Exchange Commission (SEC) last evening. At 9:20 am, the stock was trading at Rs 524, after hitting a high of Rs 535.

The shares are expected to be offered by Novelis’ sole shareholder AV Minerals (Netherlands), a wholly-owned subsidiary of Hindalco.

At this point, the market is not clear on how much money the IPO will benefit Hindalco shareholders. No details are available about the quantum of shares on offer and how much money Hindalco stands to get from the sale of its stake, as the filing is a confidential one. What is clear is that Novelis will not be getting the money directly as the shares are being sold by the promoter. Read More

Sensex Today | BSE Smallcap index up 0.4 percent led by GOCL Corporation, Renaissance Global, Bigbloc Construction

The share price of Thermax inched up 1.5 percent early on February 21 after the company entered into a licence and technical assistance deal with a South Korean company.

The deal with Flowtech Co Ltd, South Korea, will help Thermax obtain technology to manufacture polycarboxylate ether products to strengthen its construction chemicals business portfolio.

The total consideration for the technology is pegged at $300,000, out of which 50 percent will be adjusted against royalty payment and the rest as refundable deposit till the agreement period. Read More

The Committee of Directors for Raising Capital Funds has approved the raising of funds up to Rs 3,000 crore through qualified institutions placement (QIP) issue. The QIP issue has opened on February 20, with a floor price of Rs 142.78 per equity share.

The Committee of Directors for Raising Capital Funds has approved the raising of funds up to Rs 3,000 crore through qualified institutions placement (QIP) issue. The QIP issue has opened on February 20, with a floor price of Rs 142.78 per equity share.

Sensex Today | Market at 10 AM

The Sensex was up 158.92 points or 0.22 percent at 73,216.32, and the Nifty was up 43.30 points or 0.20 percent at 22,240.30. About 1961 shares advanced, 1102 shares declined, and 94 shares unchanged.

With seven days of record intraday highs this year Nifty is exhibiting great strength. The big emerging market worry of rising bond yields in the US is not impacting India since FIIs have been forced to reduce their selling since they are being completely neutralised by sustained DII buying assisted by retail exuberance. This resilient domestic buying is providing the main support to the ongoing rally in the market, and the strong performance of the economy and improving corporate earnings are solid fundamental support to the market.

The fact that the fairly valued large private banks are now contributing to the rally is a positive signal. This has the potential to sustain. But the irrational exuberance in pockets of the broader market is unlikely to sustain. Retail investors should not be carried away by this exuberance.