• Fri. Mar 1st, 2024

Closing Bell: Nifty Crosses 19,700, Sensex Gains 173 Points; Mid and Small Caps Shine

ByNishat Manzar

Sep 27, 2023
share market

Introduction:
In today’s volatile market session, the Nifty managed to overcome an initial dip and closed above the 19,700 mark, while the Sensex posted gains of 173 points. The midcap and smallcap indices also witnessed positive movements, each rising by 0.6 percent. Notably, the Bank Nifty showed resilience, defending a crucial support level at 44,200, although it currently trades below its 20-day moving average. Amidst this market backdrop, technical indicators suggest potential opportunities for investors.

Bank Nifty Shows Resilience:
The Bank Nifty bulls displayed remarkable resilience as they defended the key support level at 44,200, which coincided with a rising trendline support. However, the index currently trades below its 20-day moving average (20DMA) at 45,000. A decisive move above this level could trigger significant short-covering. Within its current trading range, sentiment remains bullish, favoring a “buy on dip” strategy.

Nifty’s Recovery and Technical Strength:
The Nifty initially opened lower but swiftly recovered throughout the day, ultimately closing with a gain of approximately 51 points. This move allowed it to close above the 40-day moving average (19630) and the 61.82% Fibonacci retracement level (19604), indicating underlying strength. The daily momentum indicator reaching the equilibrium line signals the maturity of the correction phase, offering a bullish outlook. Key support lies between 19600 and 19550, with immediate resistance at 19880-19900.

Bank Nifty’s Path to Recovery:
The Bank Nifty held its 78.6% Fibonacci support (44360) and bounced back strongly. This suggests that a short-term bottom may be in place, potentially leading to a pullback in the coming trading sessions. Initial targets include 45000 and possibly 45200.

Market Analysis:
The broader market saw volatility but ended marginally higher. Certain heavyweight stocks, such as Reliance and ITC, played a significant role in the market’s recovery. Sectors like pharma, realty, and FMCG outperformed, with the broader midcap and smallcap indices showing gains of 0.8%-1%.

Technical Indicators and Support Levels:
Technical analysis points to a bullish engulfing pattern and potential resistance at 19,750. A clear breakout above this level could pave the way for a substantial rally toward 19,900, while support is established at 19,600.

Expert’s Perspective – Ajit Mishra, SVP – Technical Research, Religare Broking:
Mr. Ajit Mishra highlights the volatile nature of the market but notes that select heavyweight stocks, particularly Reliance and ITC, contributed to the market’s recovery. He advises caution, as the monthly expiry of derivative contracts may keep volatility high and recommends planning trades accordingly.

Market Updates:
The IPO from JSW Infrastructure has received significant subscription interest, with retail investors, high-net-worth individuals, and institutional buyers participating actively.

Amber Enterprises is optimistic about maintaining margins and expects growth from wearables and hearables in the coming years.

Gold Prices and Market Adjustments:
Gold prices have dipped to their lowest levels in over a month, influenced by a strengthening U.S. dollar amid expectations of higher interest rates. The market is adjusting to this new scenario.

Rupee Movement:
The Indian Rupee has experienced fluctuations due to factors like the strong U.S. Dollar, crude oil price surges, and foreign fund outflows. RBI interventions may provide support, but global market risk aversion and the Dollar’s strength weigh on the Rupee.

Analyst Outlook – CLSA on Communications:
CLSA maintains an outperform rating on a communications company with a target price of Rs 2,045 per share. The merger with Kaleyra is expected to lead to data revenue upgrades, although it may slightly impact margins. Despite near-term margin challenges, the company is poised for strong data revenue growth.

Closing Bell: Market Snapshot:
The Sensex and Nifty closed the session with gains, with the Nifty crossing the 19,700 mark. Gains were observed in sectors like PSU banks, capital goods, FMCG, realty, and healthcare, while some selling pressure was seen in the oil and gas sector. The BSE midcap and smallcap indices also posted gains of 0.6 percent each.

Recent Developments:
Man Infraconstruction has received approval for its luxurious residential project in Mumbai.

Jefferies View on Aditya Birla Capital:
Jefferies initiates a buy rating on Aditya Birla Capital with a target price of Rs 215 per share. The company is expected to double its profit over the next three years, driven by branch expansion and opportunities in MSME lending.

Market at 3 PM:
In the late afternoon, the Sensex was up by 0.33 percent, and the Nifty was up by 0.32 percent. The market witnessed varied stock movements.

GE Shipping Contracts:
The Great Eastern Shipping Company has contracted to sell a Supramax Dry Bulk Carrier, Jag Rohan, to an unaffiliated third party, a move that will impact the company’s fleet composition.

Bank Nifty’s Technical Outlook:
Technical analysis suggests that the Bank Nifty may be nearing the end of its consolidation phase and could soon start an upward movement. The performance of key banking stocks, HDFC Bank and ICICI Bank, will play a crucial role in this scenario.

Morgan Stanley’s View on SBI Cards & Payment Services:
Morgan Stanley maintains an overweight rating on SBI Cards & Payment Services with a target price of Rs 1,115 per share. The company has shown growth in spending and is well-positioned to benefit from the MSME lending opportunity.

Rupee’s Movement:
The Indian Rupee has experienced fluctuations due to various global and domestic factors. Expectations of RBI interventions and global market trends are influencing its trajectory.

Analyst Outlook – Jefferies on Amber Enterprises:
Amber Enterprises’ management is positive about maintaining margins and anticipates growth in the wearable and hearable space.

Market Update – Gold Prices:
Gold prices have dipped due to a stronger U.S. dollar and changes in interest rate expectations.

CLSA’s Perspective on Communications:
CLSA maintains a positive outlook on a communications company following its merger with Kaleyra, expecting data revenue growth despite potential margin adjustments.

Closing Bell: Market Snapshot:
A snapshot of the market’s closing figures, with gains in both the Sensex and Nifty. Gainers and losers in specific stocks are highlighted.

Recent Development – Man Infraconstruction:
Man Infraconstruction has received approval for its residential project in Mumbai, adding to its project portfolio.

Jefferies’ View on Aditya Birla Capital:
Jefferies initiates coverage with a buy rating on Aditya Birla Capital, highlighting its potential for profit growth and expansion opportunities in the MSME lending sector.