Closing Bell: Sensex pares losses, ends down 360 pts lower, Nifty below 21,400; IT, FMCG see selling

Markets resumed decline and shed nearly half a percent amid mixed cues. After the weak start, buying in select heavyweights triggered some rebound in the middle however continued pressure in the private banking majors capped upside. Eventually, Nifty settled at 21352 levels; down by 0.47%. Meanwhile, a mixed trend continued on the sectoral front wherein energy and realty edged higher while IT, pharma and FMCG witnessed profit taking. The broader indices also witnessed varied moves, with midcap in red and smallcap gaining over half a percent.

The prevailing pressure in banking majors is largely weighing on the sentiments however selective buying in others is capping the damage so far. This diverging trend indicates further consolidation in the index so traders should stay focused on stock selection and trade management until we see some clarity.

Market is witnessing a lot of volatility ahead of the Budget with a negative bias as investors further booked profits to cut down their long positions on the expiry day. Continuous outflows of foreign funds from the domestic equity market has been denting the sentiment over the past one week as they have net sold local shares worth more than Rs 33,000 crore in January so far. A rise in US bond yields coupled with mixed Q3 earnings so far and uptick in international crude oil prices due to simmering tensions in West Asia has been making investors jittery about the near term prospects.

On the technical front, with the immediate resistance being at 21,400 mark, we expect the market to go down further towards 21,100 and 21,000 eventually, and if it breaks 21000 level we can witness more selling pressure up to 20900-20500 levels. Any trend change would happen only once the Nifty surpasses the 21,500 mark.

Bears dominated Dalal Street on January 25 as frontline indices Sensex and Nifty erased their gains from the previous session, dragged by banking, FMCG and IT stocks. At close, the Sensex was down 359.64 points or 0.51 percent at 70,700.67, and the Nifty was down 101.40 points or 0.47 percent at 21,352.60. About 1813 shares advanced, 1423 shares declined, and 55 shares unchanged.

In the broader markets, the midcap indices corrected along with the benchmarks but the smallcap indices outperformed, with Nifty Smallcap closing higher by 0.5 percent. All of the sectoral indices, barring Nifty Realty, were trading in the red. The financial services, pharma, bank, IT, FMCG and Healthcare index all settled lower by over one percent.

While most analysts believe that the interim budget is a non-event with major changes expected only after the elections, the overall expectation for the defence sector remains positive. READ MORE

--Net profit at Rs 202 crore vs Bloomberg estimates of Rs 199 crore

--Gross NPA at 2.53% vs 2.2% QoQ

--Provisions at Rs 84.38 crore, up 34% QoQ

- Net profit at Rs392 cr vs CNBC-TV18 poll of Rs454 cr

--Net Profit up 44% at Rs90.4 cr vs Rs62.7 cr (YoY)

--Revenue up 22% at Rs474 cr vs Rs389 cr (YoY)

--EBITDA up 36% at Rs121 cr vs Rs89 cr (YoY)

--Margin at 25.5% vs 22.8% (YoY)

Stock Market LIVE Updates | HPCL reports its Q3 earnings; net profit at Rs529 cr Vs CNBC-TV18 poll of Rs1,498 cr

Nova Agritech’s Rs 143.81-crore initial public offering (IPO) was subscribed 53 times by January 25 afternoon, the final day of bidding.

Retail investors bid 53.22 times their allotted quota of shares. High net-worth individuals (HNI) picked 121.24 times and qualified institutional buyers (QIB) bought 1.27 times the shares set aside for them.

The IPO consists of a fresh issue of 2.73 crore shares worth Rs 112 crore and an offer for sale of 77.58 lakh shares worth Rs 31.81 crore. The price band for the offer has been fixed at Rs 39-41 a share.

Foreign investor CLSA Global Markets Pte Ltd has bought 46,52,002 equity shares, which is equivalent to 3.17% of paid-up equity, in Sunteck Realty via open market transactions at an average price of Rs 445.5 per share. However, Briarwood Capital Master Fund sold 47,15,000 equity shares in the company at same price.

Sensex Today | Nifty Bank index down 1.2 percent dragged by Axis Bank, HDFC Bank, AU Small Finance Bank:

-Buy Call, target raised to Rs 950 per share
-Company consistently outperforming expectations
-Well positioned to deliver industry-leading quadrant growth in FY25
-Q3 revenue & margins above estimates
-Margin expansion continues under new unified organisational structure
-Raise FY24-26 EPS by approximately 4-5 percent

Sensex Today | Market at 1 PM

The Sensex was down 735.41 points or 1.03 percent at 70,324.90, and the Nifty was down 195.30 points or 0.91 percent at 21,258.70. About 1815 shares advanced, 1365 shares declined, and 71 shares unchanged.

IRM Energy has commenced commercial operations at LCNG station at Namakkal district on January 24. The LCNG Station has a capacity of natural gas compression of 64,800 kgs per day at 250bar (high pressure stream) and 1,04,500 kgs per day (medium pressure stream).

-Outperform call, target Rs 145 per share
-Q3 results showed inventory movements drive beat & core earnings in-line
-India business profitability was sharply above our estimate
-Adjusted for the inventory movement, it was largely in-line
-Losses from Europe expanded to USD 180/t versus USD 169/t QoQ
-Continued losses in both the Netherlands and the UK
-Net debt was flat QoQ at Rs 77,400 crore

Sensex Today | Nifty FMCG index down 1 percent dragged by United Spirits, Jubilant FoodWorks, ITC:

Net profit up 59% at Rs 151.2 crore versus Rs 95.3 crore and revenue up 9% at Rs 1,942 crore versus Rs 1,778 crore, YoY.

Net loss at Rs 57 crore versus profit of Rs 34 crore and revenue down 12 percent at Rs 1,322 crore versus Rs 1,494 crore, QoQ.

Net profit at Rs 123.9 crore versus Rs 48.2 crore and revenue up 14 percent at Rs 644.7 crore versus Rs 565.7 crore, YoY.

-Equal-weight call, target Rs 120 per share
-Q3 domestic EBITDA was ahead of our estimate, helped by both higher realizations & better costs
-Consolidated EBITDA was even better despite weakness in Europe
-Company’s "other" domestic businesses did much better
-Gross debt was down marginally, to Rs 88,200
-Net debt was broadly stable, at Rs 77,400

Chalet Hotels has recorded consolidated profit at Rs 70.6 crore for quarter ended December FY24, falling 31% compared to year-ago period, impacted partly by lower other income. Revenue from operations grew by 29% YoY to Rs 373.7 crore in Q3FY24. Further, the board has also approved raising of funds up to Rs 2,000 crore through issue of equity shares or any other convertible instruments, which will be utilised towards paring down of debt, organic & inorganic growth, general corporate purposes and redemption of preference shares.

Net profit up 4% at Rs 24.1 crore versus Rs 23.2 crore and revenue up 0.2% at Rs 279.5 crore versus Rs 278.9 crore, YoY.

Net profit flat Rs 27 crore and revenue up 6% at Rs 694.2 crore versus Rs 654.6 crore, YoY.

Sensex Today | BSE Healthcare index down 1 percent dragged by Laurus Labs, Aarti Drugs, Alembic Pharma:

-Hold call, target Rs 1,300 per share
-Expect a turnaround to remain challenging, especially in current environment
-Margin expansion is contingent on pyramid improvement or a pricing uptick

Jefferies On Laurus Labs

-Underperform call, target cut to Rs 250 per share
-Q3 all-round miss on subdued performance in CDMO and API division
-Management reiterated their stance for margin improvement in Q4 and overall H2FY24 > H1FY24
-Management’s commentary on CDMO division’s recovery was uninspiring
-Management’s commentary on CDMO division’s recovery indicated much slower ramp-up than estimate
-Cut FY25/26 EPS estimates by 19 percent/16 percent

Quick Heal Technologies has reported consolidated net profit at Rs 10.06 crore for quarter ended December FY24, against loss of Rs 9.3 crore in year-ago period. Revenue from operations grew by 22.6% year-on-year to Rs 81.9 crore for the quarter.

Piramal Alternatives Trust (PAT), a wholly-owned subsidiary of Piramal Enterprises, has entered into an agreement, to acquire 10.39% stake in Annapurna Finance (AFPL) for Rs 300 crore through purchase of equity shares and subscription to optionally convertible debentures.

Glenmark Specialty S.A. (GSSA), a subsidiary of Glenmark Pharmaceuticals announced the signing of a license agreement with Jiangsu Alphamab Biopharmaceuticals Co., Ltd (Jiangsu Alphamab) and 3D Medicines (Beijing) Co., Ltd. (3DMed), for KN035 (Envafolimab) for India, Asia Pacific, Middle East and Africa, Russia, CIS, and Latin America (the Territory).

Sensex Today | Market at 12 PM

The Sensex was down 539.91 points or 0.76 percent at 70,520.40, and the Nifty was down 146.80 points or 0.68 percent at 21,307.20. About 1832 shares advanced, 1327 shares declined, and 68 shares unchanged.

Sula Vineyards Ltd had given a breakout after jumping over 40 percent in nine sessions, however, the stock showed a minor correction on weak volumes on January 25 morning. READ MORE

Market analysts believe that domestic markets will see sideways consolidation on the day of monthly F&O expiry. READ MORE

With a solid product portfolio, strong market position, and a focus on electric vehicles, the company is expected to outperform the industry. READ MORE

Sensex Today | BSE Auto index down 0.4 percent dragged by Balkrishna Industries, TVS Motor Company, MRF:

Borosil said the board of directors has given approval for raising of funds up to Rs 250 crore through qualified institutions placement (QIP).

Promoter Rising Sun Holdings has bought additional 40,33,000 equity shares or 0.52% stake in Poonawalla Fincorp at an average price of Rs 495.85 per share. However, Magma Ventures was the seller in this deal.

Zee Entertainment Enterprises issued a reply to Culver Max and Bangla Entertainment (BEPL), denying any breach of its obligations under the Merger Cooperation Agreement (MCA) and reiterating that it has complied with all its obligations in good faith. ZEE further said the claim for termination fee of $90 million is legally untenable and has no basis whatsoever.

ZEE has called upon Culver Max and BEPL to immediately withdraw the termination and confirm that they will perform their obligations to give effect to and implement the merger scheme, sanctioned by the National Company Law Tribunal.

DLF shares gained on January 25 after the real estate major recorded a 26.6 percent on-year growth in consolidated net profit for the quarter ended December 2023.

The profit came in at Rs 655.7 crore for the quarter, with healthy operating margin performance and higher other income. Revenue from operations increased 1.8 percent on-year to Rs 1,521.3 crore for the quarter. Read More

Sensex Today | Market at 11 AM

The Sensex was down 726.52 points or 1.02 percent at 70,333.79, and the Nifty was down 204.70 points or 0.95 percent at 21,249.30. About 1732 shares advanced, 1364 shares declined, and 73 shares unchanged.

Container Corporation of India has clocked 12.7% on-year growth in consolidated net profit at Rs 330.6 crore, with healthy growth in operating numbers. Consolidated revenue from operations grew by 10.3% year-on-year to Rs 2,210.6 crore for the quarter.

Sensex Today | BSE Power index up nearly 1 percent led by NHPC, BHEL, Adani Energy:

PNB Housing Finance has recorded consolidated net profit at Rs 338.4 crore for quarter ended December FY24, growing 25.8% over a year-ago period, with significant fall in impairment on financial instruments & write-offs to Rs 59.1 crore from Rs 254.84 crore during the same period. Revenue from operations fell 2.3% YoY to Rs 1,754.8 rore for the quarter.

-Overweight call, target Rs 8,082 per share
-Reported another strong quarter
-All time high top & bottom line for three consecutive quarters
-While share of high margin segments was down QoQ
-Improving mix supported gross margin & EBITDA was 6 percent ahead of estimate

Balkrishna Industries has clocked a massive 181.8% on-year growth in consolidated net profit at Rs 305.4 crore for quarter ended December FY24 on robust operating numbers. Consolidated revenue from operations increased 5% to Rs 2,274.4 crore compared to corresponding period last fiscal. Meanwhile, the board of directors has given approval for merger of BKT Tyres with Balkrishna Industries.

Sensex Today | BSE Smllcap index up 0.5 percent led by Oswal Greentech, Technocraft Industries, GTPL Hathway:

Gold and silver exhibited notable volatility and settled with a mixed performance ahead of the U.S. fourth-quarter GDP data. The dollar index experienced a decline, although U.S. 10-year bond yields saw an increase in anticipation of the GDP data, leading to a dip in gold prices. The decline in gold prices was further influenced by stronger-than-expected U.S. flash manufacturing and services PMI data. Conversely, silver prices saw an uptick following an announcement by the Chinese central bank, stating its intention to reduce the Reserve Requirement Ratio (RRR) by 50 basis points starting from February 5th, thereby supporting industrial metals.

Traders are closely monitoring today's U.S. fourth-quarter GDP data for further market insights. Anticipating continued volatility in today's session, we project that gold and silver prices will experience fluctuations. Gold is expected to find support in the range of $2000-1988, with resistance at $2028-2038. Silver, on the other hand, has support around $22.54-22.40, with resistance at $22.92-23.15.

In terms of INR, gold is likely to find support at Rs 60,790-60,640, facing resistance at Rs 61,190 and Rs61,410. Meanwhile, silver is anticipated to have support at Rs 71,340-70,780, with resistance levels at Rs 72,350 and Rs 72,980.

-Buy call, target Rs 310 per share
-Q3 operational results in-line
-Gross margins surprised positively
-Higher capital costs (depreciation + interest) resulted in a marginal miss at PAT level
-Management noted that demand appears to be picking up across segments
-Management noted that input cost pressures have started easing as well, aiding margin expansion
-Lithium Ion Cell plant is progressing as per plans

-Sell call, target Rs 315 per share
-Q3 sales subdued on a high base, down 23 percent YoY
-Normalising impact of COVID-elated order last year, sales grew by just 6 percent YoY
-Gross margins improved 90 bps/180bps YoY/QoQ
-Negative operative leverage as growth investments continue to keep EBITDA margins under pressure
-Continued ramp-up in FDF sales was a positive
-Commercialisation of animal health project has been delayed by a couple of quarters
-Cut FY24-26 EBITDA by 9-11 percent

The Indian stock market started the day with a gap-down opening, showing a decrease of approximately half a percent.

As we approach today's monthly expiry, it's expected that the Nifty may encounter resistance at higher levels, particularly with the 21600 Call strike holding significant open interest. On the downside, support is expected from Put writers at 21300 and 21400 levels.

In the previous session, Bank Nifty staged a recovery from lower levels, although the session was marked by volatility, attributed to selling pressure observed in specific private banks. Looking ahead, 45500 is poised to act as an immediate obstacle, while buying interest is expected to materialize around the 44700 levels on the downside.

Given the current market volatility, it is crucial to be prepared for short-term fluctuations.

UCO Bank has recorded 23% year-on-year decline in net profit at Rs 502.8 crore for third quarter of FY24, with net interest income growing 1.9% YoY to Rs 1,988 crore and pre-provision operating profit declining 17.3% to Rs 1,119.1 crore for the quarter. Asset quality improved with gross NPA falling 29 bps sequentially to 3.85% and net NPA declining 13 bps QoQ to 0.98% for the quarter.

-Buy call, target Rs 1,470 per share
-Q3 above estimate on growth, margins in-line
-Margin had negative impact of 160bp from ongoing portfolio restructuring
-Underlying operating margin was 7 percent, flat QoQ
-Deal wins at USD 381 million were soft
-TTM deal wins at USD 1.6 billion were down 51 percent YoY
-Full details of CEO’s turnaround strategy in April

Since the tug of war between the FIIs and DIIs continues, volatility will remain high in the near-term. This volatility may be used by investors to churn their portfolios.

A significant anomaly in the market is the high valuation in some pockets and the fair and even attractive valuation in some other pockets. For instance, some PSU stocks are flying high on hopes based on order flows. It will take a long time for these order flows like in ship building, for instance, to translate into profits. And there is no guarantee that it will happen. On the other hand pockets like banking are fairly valued and the performance and prospects are good. There is value in bluechips like HDFC Bank.

The rising bond yields in the US is a matter of concern. This rally in global stock markets was triggered by the Fed pivot which saw the 10-year bond yield falling from 5% to around 3.8%. Now the 10-year is back at 4.18% which indicates that the Fed rate cut will come only in H2 of 2024. A significant take away from the Q3 results is the improving margins of the auto industry.

DCB Bank has registered a 11.4% on-year growth in net profit at Rs 127 crore for third quarter of FY24, with 30.5% increase in other income and 9 percent rise in pre-provision operating profit. Net interest income grew by 6.3% year-on-year to Rs 474 crore for the quarter, with 14 percent growth in deposits and 13 percent increase in net advances.

Gold and silver exhibited notable volatility and settled with a mixed performance ahead of the U.S. fourth-quarter GDP data. The dollar index experienced a decline, although U.S. 10-year bond yields saw an increase in anticipation of the GDP data, leading to a dip in gold prices. The decline in gold prices was further influenced by stronger-than-expected U.S. flash manufacturing and services PMI data. Conversely, silver prices saw an uptick following an announcement by the Chinese central bank, stating its intention to reduce the Reserve Requirement Ratio (RRR) by 50 basis points starting from February 5th, thereby supporting industrial metals.

Traders are closely monitoring today's U.S. fourth-quarter GDP data for further market insights. Anticipating continued volatility in today's session, we project that gold and silver prices will experience fluctuations. Gold is expected to find support in the range of $2000-1988, with resistance at $2028-2038. Silver, on the other hand, has support around $22.54-22.40, with resistance at $22.92-23.15.

In terms of INR, gold is likely to find support at Rs 60,790-60,640, facing resistance at Rs 61,190 and Rs61,410. Meanwhile, silver is anticipated to have support at Rs 71,340-70,780, with resistance levels at Rs 72,350 and Rs 72,980.

Yes Bank, Macrotech Developers, APL Apollo Tubes, Bhansali Engineering Polymers, Capri Global Capital, Craftsman Automation, Dodla Dairy, Olectra Greentech, Utkarsh Small Finance Bank, and Zen Technologies will release quarterly earnings on January 27.

JSW Steel, Punjab National Bank, ACC, Adani Power, SBI Cards and Payment Services, SBI Life Insurance Company, Tata Technologies, Vedanta, Hindustan Petroleum Corporation, AU Small Finance Bank, Cholamandalam Investment and Finance Company, Cyient, Equitas Small Finance Bank, Indian Energy Exchange, Indraprastha Gas, SBFC Finance, Shriram Finance, and Syngene International will declare quarterly earnings on January 25.

Crude oil experienced a notable uptick of approximately 1.0% in the global markets, propelled by a more significant-than-anticipated reduction in U.S. oil inventories and supportive measures from the Chinese stimulus. According to the U.S. (EIA), U.S. crude oil inventories saw a substantial decrease of 9.2 million barrels, surpassing the expected decline of 2.2 million barrels. Concurrently, U.S. output witnessed a decline from the previous record of 13.3 million barrels per day to 12.3 million barrels per day, primarily due to adverse weather conditions in North Dakota.

The surge in crude oil prices was further bolstered by the announcement from the Chinese central bank indicating a 50 basis points reduction in its RRR starting February 5th. Also, geopolitical tensions in the Middle East and profit-taking in the dollar index contributed to the support of oil prices.

Anticipating ongoing volatility, we project that crude oil prices will remain dynamic in today's trading session. The support for crude oil is identified at $74.50–73.90, with resistance expected at $75.85-76.40 for the current session. In INR, crude oil is anticipated to find support in the range of Rs 6,185-6,100, while resistance is expected at Rs 6,300-6,410.

Sensex Today | BSE Realty index up 1 percent supported by Godrej Properties, Phoenix Mills, DLF:

RailTel Corporation of India has received the work order from Navodaya Vidyalaya Samiti for Supply & Implementation of Integrated Infrastructure & IT solutions under PM SHRI Scheme in JNVs Schools amounting to Rs 162.73 crore (Including Taxes).

Sensex Today | Nifty Bank index down 0.3 percent dragged by Axis Bank, AU Small Finance Bank, HDFC Bank:

The Cabinet Committee on Economic Affairs (CCEA) has approved setting up of a coal-to-SNG (synthetic natural gas) project through a joint venture between Coal India and GAIL, and a coal-to-ammonium nitrate project through a venture between Coal India and BHEL. Coal India will set up two coal gasification plants as part of efforts to achieve the target of 100 MT coal gasification by 2030.

RailTel Corporation of India has recorded 94.5% on-year growth in net profit at Rs 62.1 crore for quarter ended December FY24, with healthy topline and operating numbers. Revenue from operations grew by 47.1% year-on-year to Rs 668.4 crore for the quarter.

Sensex Today | BSE Information Technology index down 0.7 percent dragged by KPIT Technologies, Tech Mahindra, InfoBeans Technologies:

Mazagon Dock Shipbuilders has signed a contract with Acquisition wing of Ministry of Defence for construction and delivery of 14 Fast Patrol Vessels (FPVs) for Indian Coast Guard (ICG). The contract is worth Rs 1,070 crore.

Dalmia Bharat has reported a 22.2% on-year growth in net profit at Rs 266 crore for the third quarter of FY24, with healthy operating numbers. Revenue from operations grew by 7.3% to Rs 3,600 crore compared to year-ago period. Its EBITDA for the quarter jumped 20.3% to Rs 775 crore and EBITDA per tonne soared 11.3% to Rs 1,138 compared to corresponding period of last fiscal.

The Government of India is proposing to offer upto 50.5 lakh equity shares to eligible & willing employees of NHPC including its subsidiaries at a price of Rs 71 per equity share. The dates for opening of said offer-for-sale to employees will be intimated in due course of time.