Closing Bell: Nifty above 19,600, Sensex up 320 pts; metal, pharma gain 2% each

Taking Stock: Market bounces back; Nifty above 19,600, Sensex up 320 points

Except information technology, all sectoral indices ended in the green, with metal, power, oil & gas, PSU Bank and healthcare gaining 1-2.7 percent... Read More

The Bank Nifty saw a resurgence in bullish momentum as the bulls successfully defended the key support level at 44,200. However, challenges persist as the 20-day moving average (20DMA) at 45,000 continues to act as a strong resistance. The index appears to be consolidating within a range, with levels of 44,200 on the downside and 45,000 on the upside defining this range.

A decisive break on either side of this range will likely trigger fresh trending moves. In particular, the support at 44,200 is crucial and could determine the index's near-term direction.

On the first day of the October series, Indian markets started strong and continued to build on the gains through the session, barring last 45 minutes of trade, where Nifty witnessed minor profit booking and fell more than 100 points from day’s high of 19726. Nifty ended the week with 0.18% fall, to close at 19638.

Asian equities gained, led by a rally in Hong Kong on hopes that China’s Golden Week holiday will spur a consumption revival and boost sentiment marred by the country’s property sector crisis.

Smaller stocks represented by Nifty Mid and small cap 100 Index outperformed the Nifty where they gained 1.08% and 0.99% respectively as against 0.59% rise in the Nifty. Advancing shares outnumbered the declining shares as advance decline ratio stood at 1.85 levels on BSE, highest since 14-September. Cash market volumes were lower as compared to recent averages.

All the sectoral Indices ended in the green except Nifty IT. IT stocks were impacted as Accenture, the IT services giant reported its Q4 revenue numbers within its targeted range but fell short of estimates. The company forecasted the first-quarter revenue below the Wall Street targets signaling that high inflation and interest rates pressures will hurt demand through next year.

Amongst the sectors, Nifty Pharma, Healthcare, Media and Nifty PSU Banks were major gainers.

Nifty has been finding support near its 50 days EMA for last three consecutive sessions. Any level above 19767 would confirm the bullish trend reversal, while level below 19492 would resume the down trend in the Nifty.

Nifty ended the month of September with gains, following a weak August closing. The recent selling pressure was halted around the 50EMA. However, we need to close above 19,750 to witness a decent rally over the short term. A close or sustained move above 19,750 might take Nifty on a ride towards 20,500-20,700. On the flip side, a fall below 19,470 might trigger the resumption of the downtrend.

The Nifty opened gap up today and traded with a positive bias to close the day with gains of ~114 points. On the daily charts we can observe that the Nifty has not witnessed follow-through selling pressure from the previous trading session. In fact, it managed to close above 19600 zone which is a positive sign. On the hourly charts we can observe an Impulse i.e. a five-wave advance which helps us to assume that the low of 19492 is a short-term bottom in place.

The positive divergence and crossover on the hourly time frame also suggests that the probability of a pullback is high. Thus, both price and momentum indicator suggest that there can be a positive momentum over the next few trading sessions. In terms of levels, 19500 – 19480 is the crucial support zone while 19780 – 19840 shall act as an immediate hurdle zone.

Bank Nifty also witnessed a pullback and as a result it managed to close around the 20 week moving average (44584) which is a positive sign. We believe that the Bank Nifty is witnessing loss of momentum on the downside which is evident from the positive divergence on the hourly time frame. On the upside we expect a pullback towards 45000 – 45200 zone from short term perspective.

The Indian rupee appreciated in line with Asian currencies as the dollar index along with US bond yields corrected in the last two days. The rally in the domestic equities and the expectation of dollar inflows in the debt market bodes well for the rupee. Despite strong US data, the dollar has entered a corrective phase, probably due to quarter-end flows and a fall in the yields.

Spot USDINR is expected to trade between 83.30 and 82.80 with a negative bias ahead of the RBI monetary policy decision next week.

We remain positive on the Cement sector. Our view is that the consumption extent is likely to go up steadily over the next couple of quarters. The reason being governments spending on infrastructure, state levels spending on infrastructure, recovery in real estate sector and spending on Capex by corporate India.

We are also of the opinion that the input cost which was constant last financial year has eased off a little bit and profit margins should improve going forward from here on. Prices of cement bags have also moved up north a little bit and they might move up in future also.

In the Large cap we like ACC, Ultra tech, Ambuja & Grasim. And in the Mid cap, we are positive on Ramco Cement, JK Laxmi Cement, Dalmia Bharat, Birla Corp and Shree Cement.

The Indian market witnessed a rebound as positive GDP data from Britain instilled confidence among its global peers. However, the market is facing stiff resistance at higher levels due to insipid liquidity and a lack of triggers to overcome the bears.

The upside risk to domestic inflation may recede with the return of a good monsoon in September. This, in turn, could provide the RBI with leeway to maintain a pause in the upcoming policy meeting next week.

Markets made a recovery attempt after Thursday’s fall and managed to close half a percent higher. The tone was positive for most of the session however dip in the final hour trimmed the gains. Consequently, Nifty settled at 19638.30 levels; up by 0.59%. Among the key sectors, pharma and metal were in the limelight while IT traded subdued. Besides, the buoyancy on the broader front kept the traders busy.

Though the pace of decline has softened, the tone is still negative and we don’t see that change until Nifty decisively reclaims 19750. Meanwhile, a mixed trend on the sectoral front is offering opportunities on both sides, so traders should continue with stock-specific trading approach.

Indian rupee ended 14 paise higher at 83.04 per dollar versus previous close of 83.18.

Benchmark indices ended higher on September 29 with Nifty above 19,600.

At close, the Sensex was up 320.09 points or 0.49 percent at 65,828.41, and the Nifty was up 114.80 points or 0.59 percent at 19,638.30. About 2246 shares advanced, 1256 shares declined, and 152 shares unchanged.

Major gainers on the Nifty included Hindalco Industries, NTPC, Hero MotoCorp, Dr Reddy's Laboratories and Divis Lab, while losers were Adani Enterprises, LTIMindtree, HCL Technologies, Tech Mahindra and Powr Grid.

Except Information Technology, all other sectoral indices ended in the green with metal, power, oil & gas, PSU Bank and healthcare indices up 1-2.7 percent.

BSE Midcap index rose 1.3 percent and BSE Smallcap index up 0.6 percent.

-Sell call, target raised to Rs 9,417
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-Extrapolating current level of high margin in FY25 & FY26 is too optimistic
-Companies launch share in SUV segment will decline to low single-digits in FY25 & FY26
-Industry supply constraints are in the past now

-Overweight call, target Rs 4,951 per share
-Announces resignation of Radhesh Welling as MD & Director w.e.f Dec 15
-Executive Chairman Vishad Mafatlal will take over till co appoints a new MD
-Welling will aid in transition in interim
-Expect to hear more from company on plans to tackle top management attrition