Closing Bell: Sensex gains 612 points, Nifty at 21,700 ahead of Budget

Indian benchmark indices ended on a positive note in the volatile session on January 31 ahead of budget and Fed rates decision. At close, the Sensex was up 612.21 points or 0.86 percent at 71,752.11, and the Nifty was up 203.60 points or 0.95 percent at 21,725.70.

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.

Short covering in rate-sensitive stocks ahead of key US Fed policy rate decision and domestic Budget announcement tomorrow triggered a major rally in benchmark indices in a volatile led session. At a time when valuations are looking stretched and global macro concerns such as slowdown in China and geo-political tensions remain high, investors would resort to profit-taking at regular intervals and also bet on select stocks going ahead.

After showing sharp weakness on Tuesday, the bulls came back strongly on Wednesday and closed the day with decent gains of 203 points. After opening with a negative note, the market slipped into further weakness soon after the opening. A renewed buying has emerged from the days low of 21448 levels and the upmove continued in the mid to later part of the session.

A long bull candle was formed on the daily chart on Wednesday, that has almost recovered the loss of Tuesday's session. Though, Nifty declined sharply from near the hurdle of 21750-21800 levels, the strong buying has emerged from the immediate support of 21400 levels.

Having moved just above the recent lower top of 21750 levels on 29th and 30 Jan, there is a higher probability of negation of previous bearish chart pattern like lower highs and lower lows on the daily chart and that could eventually result in a bullish formation of higher highs and lows. This is positive indication for the market ahead.

The short-term trend of Nifty remains up and the market is waiting for the triggers from the key economic event of Union Budget 2024, which is scheduled on 1st Feb. High volatility is likely on Thursday and one may expect chances of decisive upside breakout of 21800 levels soon.

On the last day of Jan month and one day prior to the day of budget we have seen strong move in Index with Nifty closing near to its day’s high above its resistance of 21700 levels. Bank Nifty also moved higher and managed to close above its resistance of 45900 levels.

The market has traded positive with the Sensex gaining 0.86 percent and closed at 71752.11 and Nifty was up by 0.95 percent intraday and closed at 21725.70 levels whereas Bank Nifty closed positive, up by 1.39 percent and settled at 45996.80.

All the sectors ended in green with Nifty PHARMA, Nifty PSU BANK, Nifty REALTY gaining 2.68%, 2.27% and 2.28% respectively. In Nifty stocks, DRREDDY, EICHER MOTORS and SUNPHARMA were the top gainers while LT, TITAN and BPCL were the prime laggards.

India VIX was Negative by 0.37 percent intraday and settled at 16.04.

Index has a support around 21500-21350 zone. Coming to the OI Data, on the call side, the highest OI observed at 22000 followed by 21900 strike prices while on the put side, the highest OI is at 21500 strike price. On the other hand, Bank Nifty has support at 45500-45300 while resistance is placed at 46200 and 46500 levels.

It’s been an eventful and earnings-heavy week in Indian equities. Large cap earnings have been underwhelming so far. Zee/Sony legal dispute commences today at SIAC. Reliance market cap crossed Rs19tn on Monday on post facto reports indicating Russian Oil being largely unaffected by the Red Sea disruption. Indian Interim budget would be presented tomorrow. We don’t expect any big bang announcements, but is likely to be watched for clues on fiscal consolidation and policy priorities ahead.

On the international front, IMF raised global growth forecast to 3.1% for this year. Fed is expected to hold interest rates - but all eyes will be on guidance (to be released late today). US tech earnings kicked off with encouraging signs - Microsoft posted solid numbers as Azure cloud growth beats estimates. Apple to report Thursday afternoon.

FII flows were broadly negative following last weeks trail. Market should continue to be range bound on lacklustre earnings results. On technicals, 21500 to act as interim support levels. Any fall further should see support at 21200-21250 levels next. On the upside, 21800 would be first resistance level.

The Nifty has formed a Piercing Line pattern on the daily chart, following a dark cloud cover in the preceding trading session. This consecutive complete reversal pattern indicates a highly volatile market sentiment. The trend may continue to be volatile on Thursday, especially as the interim budget will be delivered. Support on the lower end is situated at 21500, while a decisive move above 21750 might trigger a rally towards 22100 and beyond.

The Bank Nifty bulls made a robust comeback a day before the budget, surpassing the immediate hurdle at 45500. The index now faces the next resistance at 46500, and a decisive break above this level could potentially reverse the entire trend for the index. On the downside, the immediate lower-end support is positioned at 45700, and breaching this level may signal a resurgence of bearish control in the market.

The Nifty opened marginally in the red and as the day progressed it witnessed buying interest and closed the day in the green up ~200 points. On the daily charts we can observe that the Nifty is broadly trading within the range of 21100 – 21800 since the past nine trading sessions. The Nifty has been trading in a volatile manner within this broad range. The momentum setup is providing a divergent signal as both daily and hourly momentum indicators have a negative crossover but prices are moving higher. Under such a situation when the price and momentum indicator are not in sync it generally leads to a range bound move. Considering the event of interim budget volatility is likely to continue. Key support levels are 21550 – 21500 while immediate hurdle zone is placed at 21850 – 21900.

Bank Nifty witnessed a sharp surge during the day and marched towards 46000. On the upside it is approaching key hurdles placed in the range 46370 – 46640 where the key daily moving averages are placed. Thus, the current rally can extend towards this zone from a couple of days perspective. On the downside, 45200 shall act as a crucial support zone.

The markets started the day on a negative note but the level of 21,460 acted as a strong support for a reversal. A sharp uptick in the Banking and Pharma stocks propelled the Index to extend its gains further to settle the day at 21,725.70 with gains of 203.60 points.

All the sectors ended the day in green with Pharma and PSU Banks being the top performers. With gains of 1.63% & 2.25%, Mid and Smallcaps outshined the Frontline Index.

The Index has formed a Piercing Candlestick pattern which is bullish and forming a right shoulder of an Inverted Head & Shoulder pattern. A strong move above 21,850 will be considered as a pattern breakout and in that case, the upside target is 22,470. The nearest support is placed at 21,615 while the level of 21,820 will be an immediate resistance.

A positive build-up was reflected in Indian markets prior to the interim budget, although expectations are low, the market anticipates a lower fiscal deficit supported by buoyant tax revenues. The overall trend in the market is akin to a seesaw, and the buy-on-dips strategy is effective as of now. The pharma sector stood out with a positive earnings outlook. Global market cues are mixed ahead of the FOMC meeting, and US 10-year yields were marginally down. An immediate rate cut seems improbable, but indications about the future trajectory could ease volatility.

Rupee exhibited a modest positive movement, trading at around 83.05 with gains of 0.08. The upcoming Indian Union Budget adds an element of uncertainty to the currency's movement, and as a result, rupee is expected to be in a volatile range, fluctuating between 82.95 and 83.20.

Additionally, the US interest rate decision scheduled for later in the night could influence the USD, contributing to increased volatility in the rupee. Traders are advised to anticipate a slightly broader range of trade on February 1st.

Indian rupee ended higher at 83.04 per dollar versus Tuesday's close of 83.11.

: Indian benchmark indices ended on a positive note in the volatile session on January 31 ahead of budget and Fed rates decision.

At close, the Sensex was up 612.21 points or 0.86 percent at 71,752.11, and the Nifty was up 203.60 points or 0.95 percent at 21,725.70. About 2113 shares advanced, 1137 shares declined, and 63 shares unchanged.

Biggest Nifty gainers included Dr Reddy's Laboratories, Eicher Motors, Sun Pharma, Divis Labs, Tata Motors, while losers were L&T, Titan Company, Tata Consumer, BPCL.

Except capital goods, all other sectoral indices ended in the green, with auto, bank, healthcare, power, metal and realty up 1-2 percent each.

The BSE midcap index added 1.5 percent, and smallcap index rose nearly 2 percent.

Paras Defence and Space Technologies Limited has won the contract for Design, Optimization, Fabrication and Qualification of Optical Periscopes for ICS for Submarine Application dated January 30, 2024, from Instrument Research & Development Establishment (IRDE), Govt. of India, Ministry of Defence, DRDO.

Net profit up 58.1% at Rs 167.9 crore versus Rs 106.2 crore and revenue up 25.5% at Rs 2,117.3 crore versus Rs 1,686.8 crore, YoY.

The dollar was edging higher on Wednesday and headed for its biggest monthly gain since September and while the yen was set for its sharpest monthly drop in almost a year, as traders waited on a U.S. rates decision to round out January.

The dollar index has gained 2.1% against a basket of major currencies this month as markets dialled back expectations on the speed and scale of U.S. rate cuts in the face of strong economic data and pushback from central bankers.

On the day, the dollar index was up 0.1% to 103.51, just below Monday's 103.82 which matched last week's seven-week high.

-Overweight call, target Rs 965 per share
-Core business weaker than estimate due to regulatory changes in unsecured personal loans
-Contribution of new initiatives saw break even for Q3FY24 & overall PAT for 9MFY24
-There could be downside risks to near term forecasts
-Stock could take a breather after strong outperformance

Sensex Today | BSE Bank index up 1 percent supported by Bank of Baroda, SBI, IDFC First Bank:

Sensex Today | BSE Metal index up 1 percent led by Hindalco Industries, SAIL, Jindal Steel:

-Buy call, target Rs 1,930 per share
-Company reported another robust quarter
-Revenue up 4.3 percent QoQ in CC terms & margins were stable too
-Company’s structural growth is further supported by increased pressure on European OEMs
-Increased pressure on European OEMs from Chinese EV players
-Growth justifies valuation premium

Nestle Indian has informed that Mr. Gopichandar Jagatheesan, currently BEO of Cereals Business, has been nominated to succeed Mr. Mehernosh Malia, as BEO of Dairy Business (Senior Management Personnel).

Mr. Mehernosh Malia will be taking up a new assignment within Nestlé group

Mr. Varun Sethuraman, currently Category Marketing Head for Classic Noodles, has been nominated to succeed Mr. Gopichandar Jagatheesan, as BEO of Cereals Business (Senior Management Personnel).

-Equal-weight call, target Rs 300 per share
-PpOP & credit costs topped estimate as net slippages were lower
-Company released some stage 1 provisions
-Raise estimate assuming lower credit costs with coverage reduction
-Expect sub-15 percent RoE in FY25-26 & see limited upside to higher price target

Sensex Today | BSE Information Technology index up 0.5 percent led by Vakrangee, KPIT Technologies, Sonata Software:

-Packaging & technical textiles underpinned miss in Q3 earnings
-Company cited QoQ pick-up in specialty chemicals & expects a significantly better Q4FY24
-Stock trades at 17x F25 EV/EBITDA (15 percent below 3-yr average)
Organic volume levers, industry repair & seasonal upturn keep us overweight

Net profit at Rs 32 crore versus Rs 9 crore and revenue up 27.5% at Rs 444.5 crore versus Rs 348.5 crore, YoY.

Net profit up 8% at Rs 514.2 crore against Rs 476.7 crore and revenue up 7% at Rs 3,255.1 crore versus Rs 3,043.2 crore, YoY.

Net profit at Rs 177 crore versus Rs 42.4 crore and revenue up 29.0% at Rs 2,411 crore versus Rs 1,869.1 crore, YoY.

Net profit at Rs 203 crore against Rs 78.4 crore and revenue up 7.4% at Rs 1,560.5 crore versus Rs 1,453.2 crore, YoY.

Net profit down 20.5% at Rs 12.8 crore versus Rs 16.1 crore and revenue up 64.5% at Rs 1,545.9 crore versus Rs 940 crore, YoY.

-Downgrade to underperform from buy, target raised to Rs 6,060 per share
-Subdued growth across its key geographies in Q3 earnings
-US saw price erosion while India saw volume decline in base business
-Emerging markets saw unfavourable FX movements
-Company is hopeful of a revival of its US business led by 26 product launches
-Expects India growth to be in double-digits
-Believe price erosion in US base business will keep its revenue growth tepid over mid-term
-Dependence on Revlimid (patent expiry in Jan 2026) will keep revenue growth tepid over mid-term
-Lower chronic mix in its India portfolio will keep revenue growth tepid over mid-term

Net Profit up 16.5% At Rs 2,524 Cr Vs Rs 2,166 Cr (YoY)
Revenue up10.1% At Rs 12,381 Cr Vs Rs 11,241 Cr (YoY)
EBITDA up15.8% At Rs 3,477.1 Cr Vs Rs 3,003.7 Cr (YoY)
Margin At 28.8% Vs 26.7% (YoY)

Net Profit rises 40.2% to Rs 104.2 crore vs Rs 74.3 crore (YoY)
Revenue up 5.6% to Rs 1,152 crore vs Rs 1,091 crore (YoY)
EBITDA grows 35% to Rs 179 crore vs Rs 133 crore (YoY)
Margin at 15.5% vs 12.2% (YoY)

Bank of Baroda reported a 19 percent on year rise in its net profit for Q3 at Rs 4,579 crore, up from Rs 3,852.70 crore in the base period. Net interest income also grew nearly 3 percent on year to Rs 11,101 crore.

Meanwhile, asset quality also improved as gross NPA's contracted to 3.08 percent, down from 3.32 percent in the last quarter. Net NPAs also came down to 0.7 percent from 0.76 percent a quarter ago.

Nuvoco Vistas gained 2.7 percent on January 31, a day after the company reported consolidated net profit of Rs 31.03 crore in the December quarter of the current financial year.

The cement company had reported a loss of Rs 75.29 crore in the year-ago period. The company’s revenue declined 7.04 percent on-year to Rs 2,420.98 crore.

The company’s revenue declined 7.04 percent on-year to Rs 2,420.98 crore.

Sensex Today | Market at 2 PM

The Sensex was up 496.08 points or 0.70 percent at 71,635.98, and the Nifty was up 165.10 points or 0.77 percent at 21,687.20. About 2129 shares advanced, 1104 shares declined, and 59 shares unchanged. 

Oil prices fell on Wednesday as lacklustre economic activity in China, the world's biggest crude importer, weighed on sentiment, but prices were set for their first monthly gain since September as broadening Middle East conflicts raised supply concerns.

Brent crude futures for March, which expire today, fell 31 cents, or 0.4%, to $82.56 a barrel by 0700 GMT. The more actively-traded April contract fell 29 cents to $82.21.

U.S. West Texas Intermediate crude futures declined 25 cents, or 0.3%, to $77.57 a barrel.

Sensex Today | BSE Midcap index up 1 percent supported by UCO Bank, PB Fintech, ICICI Securities:

Sensex Today | Power Stocks in Focus:

According to a pre-budget report from Axis Securities, the power sector is expected to gain additional momentum in the interim budget. It cites the government's heightened focus on expanding the utilisation of renewable energy as a top priority.

The report specifically highlights the inclusion of further details about the recently launched Pradhanmantri Suryodaya Yojana, a scheme to make electricity affordable and make India self-reliant in power.

Gold prices, on Wednesday, were headed for their first monthly dip in four as investors tempered their bets of swift and deep U.S. rate cuts in the light of a resilient economy, ahead of the Federal Reserve's monetary policy decision later in the day.

Spot gold was flat at $2,036.10 per ounce by 0719 GMT, after touching a two-week high of $2048.12 in the previous session. Prices have dropped 1.3% so far this month.

U.S. gold futures rose 0.1% to $2,033.30.

-Underperform call, target Rs 610 per share
-Large EBITDA beat driven by decline in ESOP cost in Q3 earnings
-PAT of Rs 37 crore vs a H1 loss of Rs 33 crore
-Decline in insurance take rate and Paisabazaar revenues
-Guidance saw upside risk to estimate for FY24
-Ask rate for Q4, going by consensus
-Estimates >Rs 37 crore profit, which, given the strong seasonality in Q4, looks achievable

Sensex Today | BSE Healthcare index up 2.7 percent supported by Shilpa Medicare, Narayana Hrudayalaya, Max Healthcare:

Net profit jumped 10.3% at Rs 228.9 crore against Rs 207.5 crore and revenue down 0.4% at Rs 1,133.4 crore versus Rs 1,137.4 crore, YoY.

Company board announces interim dividend of Rs 100 per share & special dividend of Rs 60 per share.

Net profit up 30.1% at Rs 289.3 crore versus Rs 222.4 crore and revenue up 16.9% at Rs 1,335 crore versus Rs 1,141 crore, YoY.

-Add Call, target Rs 4,016 per share
-Q3 EBITDA below estimate, PAT up 22 percent YoY but below expectations
-Management has revised its FY24 order inflow growth guidance to 20 percent from 15 percent
-Management has revised its FY24 rev guidance to 15 percent from 12-15 percent led by robust order pipeline

Net profit up 34.9% at Rs 90.9 crore against Rs 67.4 crore and revenue up 10.6% at Rs 677.5 crore versus Rs 612.7 crore, YoY

.

Sensex Today | Market at 1 PM

The Sensex was up 487.25 points or 0.68 percent at 71,627.15, and the Nifty was up 150.20 points or 0.70 percent at 21,672.30. About 2084 shares advanced, 1134 shares declined, and 60 shares unchanged. 

Asian shares fell broadly on Wednesday, while the Australian dollar slid after surprisingly soft inflation data and Japanese government bond (JGB) yields ticked higher on growing bets of an imminent policy shift from the Bank of Japan (BOJ).

Chinese markets wobbled after an official factory survey showed China's manufacturing activity in January contracted for a fourth month as the world's second-largest economy struggles to regain momentum.

MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.4% and was heading for a monthly loss of roughly 5%, snapping a two-month winning streak.

Hong Kong's Hang Seng Index shed more than 1%, weighed down by property and tech names, and was on track for its worst January performance since 2016 with a 9% loss.

In Japan, a summary of opinions from the BOJ's January meeting out on Wednesday showed policymakers discussed the likelihood of a near-term exit from negative interest rates and possible scenarios for phasing out the bank's massive stimulus programme.

Tyre Companies In Focus | European Commission carrying out inspections at premises of tyre companies on concerns w.r.t price coordination, reported CNBC-TV18. 

Sun Pharmaceutical Industries is expected to deliver another quarter of healthy earnings, with about 10 percent on-year growth in net profit and revenue in October-December 2023, helped by strong sales in the domestic market and its specialty portfolio. The pharmaceutical major is slated to detail its Q3 earnings on January 31. Read More

India’s largest automobile player, Maruti Suzuki India Limited, is expected to post healthy revenue and net profit growth in the December quarter, on the back of a favourable product mix and improved volumes.

The 4-wheeler major’s profit is expected to increase 21 percent on-year to Rs 2,838 crore for October to December quarter, according to an average of seven brokerage firms’ estimates. Its revenue from operations is projected to rise 15 percent on-year to Rs 33,385 crore, estimates suggest. The company clocked a profit after tax of Rs 2,351.3 crore during the same period last year. Read More

Net profit at Rs 56.5 crore versus Rs 27.9 crore and Net Interest Income (NII) up 69.4% at Rs 118.4 crore versus Rs 70 crore, YoY.

The dollar headed for its biggest monthly gain since September and the yen for its sharpest drop in over a year on Wednesday, as traders waited on a U.S. rates decision to round out January.

A sharp slowdown in Australian inflation pushed the Aussie dollar down 0.5% to $0.6567 and rallied bonds as investors pulled forward wagers on interest rate cuts.

Elsewhere moves were more modest, and the yen made little immediate reaction to a hawkish tilt at the Bank of Japan, while markets waited to hear from the Federal Reserve.

The dollar was slightly firmer at $1.0817 per euro and steady at 147.67 yen early in the Asia afternoon.

Kalyan Jewellers on January 31 reported a consolidated net profit of Rs 180.3 crore for the December quarter of FY24, a growth of 21 percent from the year-ago period.

Revenue came in at Rs 5,223 crore, up 34 percent from Rs 3,884 crore last year, the company said in a regulatory filing.

-Buy call, target raised to Rs 340 per share
-Q3 broadly in-line with consensus; capacity additions slow, but expect pace to pick up
-Believe previously signed PPAs & company’s low cost of capital will allow it to add new capacity

Sensex Today | Auto stocks were in focus today ahead of Interim Budget in which the automobile industry, specifically electric vehicle companies, are hopeful of supportive measures to spur the adoption of battery-powered cars and two-wheelers.

-Add call, target Rs 370 per share
-PAT aided by 30 bps sequential improvement in margins
-Lower provision amid consistency in improving the asset quality
-Expect margins to improve in Q4FY24 on re-pricing of loans
-Margins to improve on portfolio rejig & likely lower provision amid stringent underwriting
-Company is one of high-conviction stock ideas due to its attractive risk-reward

-Buy call, target raised to Rs 613 per share
-Market share gains in new inflows, equity AUM were positives
-Systematic transactions & unique investors were positives
-Marginally tweak EPS estimate as factor in AUM mix change in favour of equity /ETF AUM

UTI Asset Management Company said the Board of Directors has approved the re-appointment of Imtaiyazur Rahman as the Managing Director and Chief Executive Officer of the company for another term of two years with effect from June 13, 2024 till June 12, 2026.

Sensex Today | Market at 12 PM

KEC International has recorded net profit at Rs 96.87 crore for quarter ended December FY24, growing 450% over a year-ago period on strong operating numbers and higher other income. Revenue from operations increased by 14.4% YoY to Rs 5,006.72 crore during the same period, while EBITDA for the quarter jumped 54% and EBITDA margin expanded 160 bps to 6.2% compared to year-ago period.

Zodiac Energy has entered into power purchase agreement (PPA) with Uttar Gujarat VIJ Company (UGVCL) for procurement of solar power on long term basis. The 5.0 MW PPAs are part of total allotted capacity of 26.8 MW by UGVCL to Zodiac Energy.

Sensex Today | BSE Smallcap index up 1 percent led by Dolat Algotech, Vakrangee, Godfrey Phillips:

Gold prices on Wednesday were headed for their first monthly dip in four as investors tempered their bets of swift and deep rate cuts in the U.S. in the light of a resilient economy, and also awaited remarks from the Federal Reserve due later in the day.

Spot gold edged 0.1% lower to $2,033.88 per ounce, after touching a two-week high of $2048.12 in the previous session. Prices have dropped 1.4% so far this month.

U.S. gold futures rose 0.1% to $2,033.30.