Closing Bell: Sensex gains 491 pts, Nifty above 21,650; realty outperform

Benchmark indices ended higher on January 4 with Nifty above 21,650. At close, the Sensex was up 490.97 points or 0.69 percent at 71,847.57, and the Nifty was up 141.30 points or 0.66 percent at 21,658.60.

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The Nifty opened gap up and traded with a positive bias throughout the day. It closed in the green after correcting for the previous couple of trading sessions. The fall in Nifty has halted around 21500 levels where multiple support parameters in the form of the 38.2% fibonacci retracement level and the lower end of the rising channel is placed.

We expect Nifty to hold on to this support and resume next leg of upmove. The hourly momentum indicator has triggered a positive crossover which is a buy signal. Thus, we shall expect the positive momentum to continue over the next few trading sessions.

Bank Nifty has held on to the support of the 20-day moving average (47920) and started the next leg of upmove. Until, 48000 is not breached on the downside we can expect the rally to continue. On the upside we expect 49500 from short term perspective.

On January 4, benchmark indices concluded the trading session on a positive note, with the Nifty surpassing 21,650. At the close, the Sensex recorded a gain of 490.97 points or 0.69 percent, reaching 71,847.57, while the Nifty rose by 141.30 points or 0.66 percent, settling at 21,658.60. The daily chart for Nifty revealed the formation of an inside bar candle. If Nifty breaches the 21,700 level, it is anticipated to reach new all-time highs, with potential targets at 21,800 and 22,000 in the forthcoming days.

In terms of sectoral performance, the Realty index demonstrated a notable surge of 6.6 percent, followed by a 2 percent rise in the Power index. Additionally, the Bank, Capital Goods, Healthcare, and Oil & Gas sectors observed gains ranging from 0.5 to 1 percent.

An analysis of the daily chart for Banknifty highlighted the formation of a morning star candlestick pattern accompanied by substantial volume, indicative of a robust bullish momentum in banking stocks. Positional traders are recommended to uphold their positions, setting a stop loss at 47,500, with target levels identified at 48,700 and 49,000 in the short run.

Upon reviewing the Open Interest (OI) data, the call side displayed the highest OI at the 49,000 level, closely followed by the 49,500 strike prices. Conversely, on the put side, the highest OI was observed at the 48,000 strike price.

After opening higher, Indian benchmark equity indices continued their upward trajectory, rebounding from two consecutive days of decline. The current market sentiment is uplifted by the anticipation that the Federal Reserve is expected to implement rate cuts as early as March this year.

The Sensex closed with a gain of 490.97 points, or 0.69 percent, at 71,847.57, while the Nifty registered an increase of 141.30 points, or 0.66 percent, concluding at 21,658.60. The BSE Midcap and Smallcap indices recorded gains of 1.5 percent and 1 percent, respectively. The Power index also showed a rise of 2 percent. Notably, the leading performer was the Realty index, surging by up to 6 percent today.

The Bank Nifty saw a strong recovery, firmly crossing the 48,000 level on closing. It has a solid support at 47,700, providing a protective cushion in case of any pullback.

The Nifty's swift recovery following two bearish days indicates continued dominance by the bulls in the market. The present sentiment suggests a promising trajectory towards 21800-21850 for the Nifty. If it surpasses 21850, we might anticipate a further climb toward 22000. Notably, the index appears to have a short-term support level around 21500. A downward shift would likely initiate only if it falls below this mark; until then, it seems favorable for buyers to take advantage of market dips.

Market bounced back after the last two negative trading days led by strong monthly business updates of leading banks, emphasizing robust credit growth. The Realty sector was the highest gainer in anticipation of robust demand in the residential category, which was supported by healthy housing loans disbursement data announced by banks. The Asian market engaged in profit-booking as Fed minutes indicated that rates will be put on-hold in the near-term.

The US FOMC minutes of the meeting indicating two-three policy rate cuts in 2024 cheered local investors as markets rebounded from its 2-day fall led by a massive rally in real estate stocks. China, currently undergoing a slowdown phase, has turned out to be a major succour for Indian markets, which continue to attract robust foreign fund flows and domestic inflows.

With economic activity remaining buoyant, expectations of a healthy corporate earnings announcement could keep the mood upbeat going ahead.

Markets rebounded swiftly and gained over half a percent, taking a breather after two days of decline. Nifty opened with an uptick despite the weak global cues and inched gradually higher as the day progressed. Meanwhile, a mixed trend continued on the sectoral front wherein a move in the realty pack was the highlight of the day while auto and metal ended unchanged. The broader indices also posted strong gains in the range of 1%-1.7%.

Feeble global cues combined with mixed trends across heavyweights are pointing towards further consolidation in the index. Traders should continue with stock-specific trading approach, with a focus on overnight risk management.

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The Bank Nifty witnessed a robust comeback by the bulls, decisively surpassing the hurdle at 48,000 on a closing basis. This breakthrough confirms the resumption of the uptrend, indicating a potential move towards the target of 50,000. The bullish crossover in the RSI further supports the positive momentum. In case of any pullback, the index has a solid support at 47,700, serving as a cushion for the bulls.

Indian rupee ended marginally higher at 83.23 per dollar versus previous close of 83.28.

Benchmark indices ended higher on January 4 with Nifty above 21,650

At close, the Sensex was up 490.97 points or 0.69 percent at 71,847.57, and the Nifty was up 141.30 points or 0.66 percent at 21,658.60. About 2267 shares advanced, 1034 shares declined, and 79 shares unchanged.

Bajaj Finance, NTPC, ONGC, Tata Consumer and IndusInd Bank are among the top gainers on the Nifty, while losers included BPCL, LTIMindtree, Dr Reddy's Laboratories, HCL Technologies and Hero MotoCorp.

On the sectoral front, Realty index up 6.6 percent, power index up 2 percent, bank, capital goods, healthcare and oil & gas up 0.5-1 percent.

BSE Midcap and smallcap indices up 1 percent each.

-Overweight call, target raised to Rs 490 per share from Rs 450 per share
-See continued double-digit growth in industry in Q3 average room rates
-See standalone ORS reaching one of highest levels

Sensex Today | BSE Healthcare index up 0.6 percent supported by Max Healthcare, Panacea Biotec, Gujarat Themis Biosyn

Oil rose more than 1% on Thursday, adding to gains in the previous session on concerns over Middle Eastern supply following disruptions at an oilfield in Libya and heightened tensions regarding the Israel-Hamas war.

On Wednesday, local protests forced a production shutdown at Libya's Sharara oilfield, which can produce up to 300,000 barrels per day. The field, one of Libya's largest, has been a frequent target for local and broader political protests.

Brent crude rose 92 cents, or 1.2%, to $79.17 a barrel, while U.S. West Texas Intermediate crude futures rallied 93 cents, or 1.3%, to $73.63.

-Overweight call, target Rs 1,850 per share
-Sequential loan growth moderated (3.6 percent versus 4.7 percent QoQ)
-On a YoY basis, loan growth remains strong at 20 percent versus 21 percent (QoQ)
-Retail deposits growth improved to 5.2 percent versus 4.3 percent QoQ (approx 20 percent YoY)

Welspun Corp received new Line Pipes orders in India and USA, and with this cumulative orders received crossed ~150 KMT valued at ~ Rs 1,500 crore. The new orders also include a Gas Pipe Line order in the USA. These orders will be executed in FY24 and FY25.

Sensex Today | Market at 3 PM

The Sensex was up 479.35 points or 0.67 percent at 71,835.95, and the Nifty was up 139.20 points or 0.65 percent at 21,656.50. About 2268 shares advanced, 1017 shares declined, and 87 shares unchanged. 

Morgan Stanley View On Telecom Sector 

-TRAI’s October data shows overall subscriber additions saw a moderate increase MoM 
-Active subscribers declined on MoM basis in October 
-Wireless data subscriber additions of 2.78 m (versus average of 5.95 m in past 6 months)
-Wireline data subscriber additions slightly improved to 0.48 million versus 0.46 million in September’23

Sharekhan is bullish on NMDC and has recommended buy rating on the stock with a target price of Rs 245 in its research report dated January 03, 2024. Valuation of 5.2x its FY26E EV/EBITDA is reasonable given strong earnings growth outlook and healthy dividend yield of 4-5%. High cash of Rs. 14,000 crore or 22% of current market capitalisation provide comfort.

Shares of several real estate companies were on a roll on January 4 with the Nifty Realty index surging more than 6 percent to a fresh all-time high of 836.45. The gains were led by Sobha which zoomed 20 percent to a new record high after Motilal Oswal Financial Services said the stock is one of its top picks for the year 2024.

The brokerage has a buy call on the stock with a target price of Rs 1,400 as it believes Sobha will provide further growth visibility as it unlocks its vast land reserves and explores opportunities beyond its existing land bank. Project launches on its large land parcels in Bengaluru and Tamil Nadu will drive re-rating for Sobha's existing land valuation, it said.

-In internet space, Zomato is top pick, target raised to Rs 150 per share from Rs 140 per share
-Delhivery – Equal-Weight call, target Rs 455 per share
-After a strong 2023, see merit in being more selective in 2024
-Believe earnings momentum holding up well should support multiples for the internet group
-Have become more selective on IT
-See limited telecoms upside

More than 97 percent of bondholders of Vedanta Resources (VRL) approved the restructuring of $3.2 billion worth of bonds due to mature in the next three years. With this, the mining conglomerate has secured the required approval from at least two-thirds of the bondholders to proceed with the restructuring plan. Meanwhile, the alumina production at Lanjigarh refinery grew by 6% YoY and 1% QoQ to 4,70,000 tonnes in Q3FY24, while saleable ore production from Karnataka increased 13% QoQ driven by improved operational efficiency (but down 3% YoY), and pig iron production grew 1% YoY and down 7% QoQ, on account of capital shutdown of one smaller furnace.

European markets were trading higher following two downbeat sessions amid uncertainty over the trajectory for central bank rate cuts.

-Buy call, target raised to Rs 1,250 from Rs 920 per share
-SC rejects pleas for further investigation into Adani group on short seller allegations
-Verdict should cement investor confidence
-Verdict should renew company’s expansion & shift focus to its solid operations performance
-Think company may be more open to inorganic opportunities & gearing its balace sheet
-Expect a 17 percent CAGR in company’s EBITDA in FY23-26e
-Expect ROIC to rise from 13 percent in FY23 to 17 percent in FY26

Nakul Anand, consequent to his retirement from ITC, has stepped down from the position of Chairman and Non-Executive Director of Gujarat Hotels with effect from January 2.

Indian Energy Exchange has recorded a 14.9% on-year growth in total volumes at 9,707 MU (million units), while total electricity volumes grew by 8.7% YoY to 8,655 MU during the month.

The market clearing price in the day ahead market for the month was Rs 4.54 per unit, marking a 13% YoY decrease, while the real-time electricity market (RTM) volume increased to 2,405 MU in December 2023, from 1,763 MU in December 2022, registering an increase of 36.4% YoY.

Life Insurance Corporation of India says the GST authorities in Tamil Nadu, Uttarakhand and Gujarat states raised a demand of GST, interest and penalty amounting to Rs 667.5 crore.

The Corporation will file an appeal before Commissioner (Appeals), Chennai, Dehradun and Ahmedabad respectively against the said orders within the prescribed timelines. There is no material impact on financials, operations or other activities of the corporation due to these orders.

Gold prices rose on Thursday as the dollar edged lower, while investors looked out for more U.S. jobs data to gauge the Federal Reserve's next steps on its monetary policy.

Spot gold was up 0.3% at $2,047.19 per ounce, after hitting its lowest since Dec. 21 on Wednesday. U.S. gold futures rose 0.6% to $2,054.50 per ounce.

-Overweight call, target Rs 10,000 per share
-AUM growth of 7 percent QoQ/35 percent YoY follows a strong 7.5 percent QoQ/33 percent YoY in Q2
-See value & volume growth, strong customer acquisition
-33-34 percent FY24 AUM growth is possible
-Positive on margin considering various factors that have been an overhang on stock

Sensex Today | BSE Realty index up 5 percent led by Sobha, Macrotech Developers, Godrej Properties:

Oil prices rose on Thursday, adding to solid gains in the previous session on persisting concerns over Middle Eastern supply following disruptions at a field in Libya and heightened tensions around Israel-Gaza war.

Brent crude rose 53 cents, or 0.7%, to $78.78 a barrel by 0730 GMT, while U.S. West Texas Intermediate crude futures rose 66 cents, or 0.9%, to $73.36.

The Industries, Energy and Labour Department, Government of Maharashtra has approved conferring the Status of Mega Project to the Expansion Project for Manufacture of Speciality Chemicals by Balaji Speciality Chemicals Limited, subsidiary company at MIDC Chincholi, Taluka: Mohol, District: Solapur -413 255, Maharashtra under the Packaged Scheme of Incentives (PSI), 2019, with a proposed investment of Rs 750 crore.

Deposits up 38.05% YoY at Rs 6,484 crore and Advances up 41 percent YoY at Rs 7,600 crore.

Sensex Today | Nifty Bank index up 1 percent led by IndusInd Bank, Axis Bank, Bandhan Bank:

Satin Creditcare Network said the meeting of Working Committee of Board of Directors is scheduled to be held on January 8 to consider the fund raising proposal through issuance of non-convertible debentures on private placement basis.

LTIMindtree has received a tax demand order under the Maharashtra Goods & Services Tax Act, from the Department of Goods and Service Tax, Office of the Deputy Commissioner of State Tax, Mumbai. The authority raised a tax demand amounting to Rs 205.9 crore (including penalty of Rs 9.1 crore and interest).

Sensex Today | Market at 1 PM

The Sensex was up 512.20 points or 0.72 percent at 71,868.80, and the Nifty was up 140.50 points or 0.65 percent at 21,657.80. About 2302 shares advanced, 966 shares declined, and 81 shares unchanged. 

Tech Mahindra has appointed Richard Lobo as Chief People Officer of the company with effect from January 3 and is designated as senior management personnel.

Further, Harshvardhan Soin, Chief People Officer will assume the role of President - Asia Pacific & Japan with effect from January 3 and will continue to be designated as senior management personnel.

Vodafone Idea recorded a loss of 20.4 lakh users in October 2023, against loss of 7.5 lakh users in September 2023. As of October 2023, the private access service providers held 91.75% market share of the wireless subscribers, whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 8.25%.

Reliance Industries' subsidiary Reliance Jio has added 31.59 lakh users in the month of October 2023, against 34.75 lakh users added in September 2023.

Bharti Airtel added 3.52 lakh users in the month of October 2023 against 13.2 lakh users added in previous month. As of October 2023, the private access service providers held 91.75% market share of the wireless subscribers, whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 8.25%.

Stock Market LIVE Updates | Morgan Stanley View On IT Services:

-Downgrade stocks that have seen strong outperformance to equal-weight (HCLTech/LTIMindtree) 
-Keep selective overweight on Infosys (greater revenue visibility/valuation comfort) 
-Keep selective overweight on Cyient (EPS growth > rev growth, potential upcycle in Aero vertical) 
-Key underweights include Wipro & Tech Mahindra among large caps & LTTS/Tata Elxsi among mid-caps (higher PEG)

Advances Up 15% YoY at Rs 2,40,066 crore and Deposits up 9.5% YoY at Rs 3,77,684 crore.

CASA Ratio at 49% versus 51.2% YoY & versus 49.4% QoQ.

Net profit down 13.1% at Rs 23 crore against Rs 26 crore and revenue up 2% at Rs 157 crore versus Rs 154 crore, YoY.

Persistent Systems announced a multi-year Strategic Collaboration Agreement with Amazon Web Services (AWS) to accelerate the pace of innovation and development of generative AI solutions for clients.

Sensex Today | BSE FMCG index up 1 percent supported by Manorama Industries, Jyothy Labs, BCL Industries:

State Bank of India has classified the credit exposure of BGR Energy Systems with them as Sub-Standard with effect from February 2, 2023, and Central Bank of India downgraded asset classification of the company’s accounts with it to non-performing asset on December 26, 2023 due to divergence observed by RBI.

As on November 30, 2023, the company has an overall credit exposure of Rs 2,060 crore with SBI, while the company has an overall credit exposure of Rs 74 crore with Central Bank of India. The company is regular in servicing the interest and other charges due to both banks as on date.

Sensex Today | Market at 12 PM

The Sensex was up 454.41 points or 0.64 percent at 71,811.01, and the Nifty was up 124.90 points or 0.58 percent at 21,642.20. About 2313 shares advanced, 918 shares declined, and 91 shares unchanged. 

Jio Financial & BlackRock Financial Management have filed papers with the capital market regulator, the Securities and Exchange Board of India (SEBI), to launch mutual fund business in India. The in-principle approval is under consideration with SEBI, as the companies as a joint venture had filed application on October 19, 2023, showed the updated list of the mutual fund applications as on December 31, 2023.

Larsen & Toubro has completed the sale of its entire stake in L&T Infrastructure Engineering to STUP Consultants consequent to completion of customary conditions precedent, agreed under the Share Purchase Agreement. Consequently, L&T Infrastructure Engineering has ceased to be a subsidiary of the company.

Broking house revise pre-sales estimates by 4%/12% for FY24/FY25.

It believe that as the company unlocks its vast land reserves and explores growth opportunities beyond its existing land bank, it will provide further growth visibility. Project launches on its large land parcels in Bengaluru and Tamil Nadu will drive re-rating for its existing land valuation.

The focus on sustainable growth (revenue growth, healthy profitability, and steady cash flows) will put the company on a long-term growth path.

At CMP, company’s ~200msf land is valued at Rs 38 billion versus arrived value of Rs 60 billion assuming 25-75 years of monetization. The company trades at 6.5x FY25E EV/EBITDA (implied based on FY25E pre-sales), which is 25-40% discount to its comparable midcap/smallcap peers (PEPL, BRGD, MLDL, Sunteck).

Broking firm revises Target Price to Rs 1,400, implying 25% upside potential, and rate Sobha as top idea for CY24.

-Upgrade to overweight, target raised to Rs 925 from Rs 680 per share
-Upgrade driven by better-than-expected margin & FCF delivery at JLR
-Upgrade driven by strengthening margin at JLR
-Global luxury OEMs are prioritising profitability over volumes
-Resilient market share in India PVs despite competitor launches
-Upgrade driven by balance sheet deleveraging
-Balancesheet deleveraging should reduce EPS volatility & lead to potential re-rating
-Increase FY25-26E EPS by 20- 30 percent

Sensex Today | Market at 11 AM

The Sensex was up 432.15 points or 0.61 percent at 71,788.75, and the Nifty was up 117.00 points or 0.54 percent at 21,634.30. About 2342 shares advanced, 837 shares declined, and 88 shares unchanged.

Stock Market LIVE Updates | JPMorgan View On IT sector

-Turn neutral on the sector 
-Upgrade Infosys & L&T Tech to overweight 
-Upgrade TCS, HCL Tech, Mphasis & Persistent to neutral from underweight
-Upgrade driven by near-term Gen AI prep work & a very low base in CY23 

Sensex Today | BSE Smallcap index up 1 percent supported by Sobha, Steel Exchange India, Puravankara:

NHPC has signed a Memorandum of Understanding (MoU) with Gujarat Power Corporation (GPCL) for proposed investment of Rs 4,000 crore in Kuppa Pumped Storage Project (750 MW), Chhota Udaipur, Gujarat with proposed year for commencement of investment as 2024-25.

In the last few days, global markets have been undergoing corrections, primarily triggered by profit booking, a typical and rational market behavior. Despite mixed global signals today, Indian indices exhibited resilience by opening with a gap up of approximately half a percent.

As we approach today's expiration, we expect Nifty facing challenges at higher levels, given the aggressive Call writing observed in At The Money (ATM) and Out of The Money (OTM) Call strikes. The immediate resistance for Nifty is identified at 21700 levels, while the support zone extends from 21400 to 21450.

For Bank Nifty, we expect 48000 to act as an immediate hurdle. Should Bank Nifty successfully maintain levels above 48000, there is a potential for a movement towards 48500.

Shares of Vedanta Limited gained 1.2 percent on January 4 after Vedanta Resources received the bondholders’ consent to restructure four series of bonds.

In a statement on January 3, Vedanta Resources ( the holding company of Vedanta Limited) said that more than 97 percent of bondholders approved the restructuring of $3.2 billion worth of bonds due to mature in the next three years. According to the statement, the meetings over each of the four series of bonds will be held on January 4, following which the company will make an announcement about the passing of the extraordinary resolution in respect of each series. Read More

Chambal Fertilisers and Chemicals said the Board of Directors will be meeting on January 8 to consider a proposal to buyback equity shares of the company. Hence, the trading window for dealing in securities of the company will continue to remain closed for all the designated persons of the company (including their Immediate relatives) till further information.

Sensex Today | BSE Midcap index up 1 percent supported by Torrent Power, Godrej Properties, Container Corporation of India:

After gaining 5% in the previous session, on news that board will consider share buyback on January 8, the shares of Bajaj Auto fell in the early session of January 4.

Bajaj Auto said in a regulatory filing that they will “consider a proposal to buyback of fully paid-up equity shares of the Company and other matters necessary and incidental thereto, in accordance with the applicable provisions of the Companies Act, 2013 (including the rules and regulations framed thereunder), the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018, as amended, and other applicable laws."