Stock Market Highlights: Sensex jumps 790 points, Nifty ends above 14,850 led by banks, financial stocks

Ajit Mishra, VP – Research, Religare Broking

Markets extended gains for the third consecutive session, in continuation to prevailing buoyancy around the earnings season. Despite caution amongst global peers ahead of the FOMC meet, the benchmark opened gap-up and continues to surge higher. The earnings outcome of companies in the banking and auto space (thanks to Axis Bank and TVS motors) led the up move as it further boosted investor’s confidence.

Markets will first react to FOMC meet outcome in early trade on Thursday and then focus would shift to the monthly derivatives expiry and earnings. On the earnings front, companies such as Bajaj Auto, Titan and HUL will announce their numbers during the day which will further add to the volatility. We reiterate our positive yet cautious view on markets and expect Nifty to test the 15,000 zone. Meanwhile, traders should maintain extra focus on the selection of stocks and prefer hedged bets, especially for the overnight trades.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The markets have successfully closed above the 14,700 level and this is a positive signal. We should now be headed to 15,100. The index has good support at 14,300-14,400 and as long as that holds, we could use any intraday correction or dip to buy into this market for higher targets.

S Hariharan, Head – Sales Trading, Emkay Global Financial Services

Market sentiment has been boosted by a set of strong results and continuing strong momentum in global markets, which has over-shadowed concerns over economic activity arising from renewed lockdowns and the second wave of covid-19 infections. Market-wide futures rollover has been strong with the median basis holding close to fair level of 42-43 bps, while roll proportion is strong at 60%. Metals & Banking sectors, in particular, have seen renewed long open interest build-up, while IT sector has lagged in a case of rotation of positioning. Mid-cap out-performance, which is a theme that has been in play for the last 6 months, continues to play out. Barring any further widespread impact of covid infections and resultant lockdowns in Tier 2 & Tier 3 cities, Nifty can be expected to trade towards its life high in May.

Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services

It is an eventful day, with Fed policy and Biden’s session of Congress. Ahead of both these events, dollar index is showing tentative signs of recovering, however, FII inflows into local stocks are weighing on USDINR spot. Technically, USDINR spot has formed a descending channel, and if tonight’s Fed message isn’t as hawkish as the market is expecting then we may see a further drop in spot. 74.25 is immediate support, until the spot remains afloat we may see prices moving towards 75 zone amid severe covid situation.

Manish Shah, Founder, Niftytriggers.com

The resistance zone for Nifty is at 14,980-15,000 and as tomorrow is the last day of expiry there could be selling around this level maybe for a day or two. A break above 14,980-15,000 will signal an onward upside towards 15,310-15,400 for May expiry. Support for Nifty is at 14,650-14,660 any declines to this zone is a buying opportunity.

Market At Close

– Market Gains For 3rd Straight Day To Close At Fresh 3-Week High

– Financials Lead Market Gains With Nifty Bank Rising 3%

– Nifty Is Now Less Than 600 Points Away From Record High

– All Nifty Bank Constituents End Higher; HDFC Bk, ICICI Top Contributors

– Sensex Gains 790 Points To 49,734 & Nifty 212 Points To 14,865

– Nifty Bank Rises 988 Pts To 33,723 & Midcap Index 266 Pts To 24,314

– Bajaj Fin & Bajaj Finserv Rise 8% & 4% Respectively After Earnings

– Strong Earnings By TVS Lead To A Strong Gain In 2-Wheeler Stocks

– TVS Motor Rises 14%, Eicher 5%, Bajaj Auto 3% & Hero Moto 1%

– Britannia Top Nifty Loser After A Miss on EBITDA & PAT In Q4

– Shriram Trans, AU Fin Bk, Adani Power, Tata Elxsi Top Midcap Gainers

– Market Breadth Favours Advances; Advance-Decline Ratio At 3:2

Closing Bell | The Indian equity market ended over 1.5 percent higher Wednesday led by banks, auto and financial stocks. The Sensex rallied 789.70 points, or 1.61 percent to 49,733.84, while the Nifty closed 211.50 points, or 1.44 percent higher at 14,864.55. Gains in midcap and smallcap indices supported the rally.

Among sectoral indices, Nifty Bank, Nifty Auto, Nifty Financial Services and Nifty IT gained the most, while losses were seen in metal, pharma and realty indices. On the Nifty50, Bajaj Finance, IndusInd Bank, Eicher Motors, Bajaj Finserv and Kotak Mahindra Bank were teh top gainers, while Britannia Industries, Hindalco Industries, Nestle India, Divi’s Laboratories and HDFC Life Insurance were the top index losers.

Cipla | The company has signed a non-exclusive licensing agreement with MSD a tradename of Merck & Co., Inc. Kenilworth, NJ., USA for the manufacturing and distribution of Molnupiravir, the investigational oral antiviral drug currently being studied in a Phase 3 trial for the treatment of non-hospitalized patients with confirmed COVID-19.

Maruti Suzuki | The company announced to close its Haryana factories to make oxygen available for medical needs. Suzuki Motor has closed Gujarat unit to make oxygen available for medical needs.

HDFC Securities on Axis Bank

Axis Bank reported an in-line operational performance with PPOP growth of 17% YoY, steady growth on both sides of balance sheet and gradual improvement in asset quality. The bank continues to build on its surplus provisions at ~2% of loans despite evidence of stability in the stressed pool. Loan growth continues to be driven by focus on high-rated corporates and mid-corporates on the wholesale side and ETB customers on the retail front. Conservative provisioning and likely speed bumps from the second wave of the pandemic are likely to defer credit cost normalisation to FY23E, despite healthy PCR (~72%). Maintain BUY with revised SOTP-based TP of Rs 758.

Symphony Q4 results: Recovery is not derailed; consumer sentiment was very strong before COVID 2.0

Symphony posted strong Q4 earnings, its revenue rose around 35 percent this quarter and margins have also expanded significantly for the company. Nrupesh Shah, ED of Symphony said, “On account of continuous innovation it’s a very strong brand and our thrust on rural as well semi-urban market it has been like a generation gap in terms of variety of model for Symphony products. As we had said, recovery might be delayed but no way recovery is derailed.” “Right until last week of April the demand was there and the sentiments were very strong. As far as our Australian subsidiary is concerned March quarter has been a turnaround quarter and now looking forward we expect it to perform as it was originally estimated.” Read here.

Iron ore prices at all-time high; strong demand seen from steelmakers

Iron ore prices are hitting all-time highs. The futures are trading above USD 190 per tonne. The demand has been strong from steelmakers. The rising margins in China have also supported demand. “This is a classic bull-market cycle for steel,” analysts at J.P. Morgan said in a note. “As the world ex-China emerges from the pandemic and reacts to stimulus measures, demand is recovering at a fast pace.” A Reuters report states that this bodes well for China, which is the world’s top exporter of steel materials and steel-based products. Watch here

HDFC Securities on Britannia Industries

Britannia clocked an in-line revenue while EBITDA margin was lower than our as well as street’s expectation. Domestic volume growth at 8% was much slower than ~17% in 1HFY21. Demand for essentials and in-home categories remained benign in 2HFY21 as consumer buying saw a shift from essentials to non- essentials. Commodity inflation and resumption of other variable costs (particularly marketing spend) impacted margins. Amidst COVID- led localised lockdown, there can be a near-term acceleration in the packaged food category but it will be unlike that in the previous year. We maintain our EPS estimate for FY22/23. High debt, inter-group transactions, and modest FY22 earnings growth will keep the valuation in check. We value Britannia at 40x P/E on Mar-23 EPS to derive a target price of Rs 3,589. Maintain REDUCE.

Enkei Wheels (India) | The company has reported a profit at Rs 8.28 crore for the quarter ended March 2021, against loss of Rs 13.25 crore. YoY. Revenue from operations increased to Rs 112.46 crore from Rs 67.18 crore in the same period.

Market Watch: Aditya Agarwala, Yes Securities

– Buy Tata Motors at current levels for target of Rs 325, keeping a stop loss at Rs 297 on the downside.

– Buy Siemens for target of Rs 1,965, keeping a stop loss at Rs 1,820 on the downside.

COVID-19: Goa to impose complete lockdown from Thursday

Goa government has decided to impose a complete lockdown in the state from Thursday (April 29) onwards. The decision comes as the second wave of the COVID-19 pandemic threatens the survival of the people in the coastal state. Chief minister Pramod P Sawant said that the lockdown will commence tomorrow evening and continue till Monday morning.  Only essential services will be allowed to operate during the period. While casinos, hotels and pubs will remain shut,  hotels will be allowed to function solely to cater for the demands of home delivery. Further borders of the state will remain open for essential service transportation.

SBI board approves $2-billion fund-raising plan for FY22

The executive committee of the central board of State Bank of India (SBI) has approved a proposal to raise up to $ 2 billion. The board approved “long-term fund-raising in single / multiple tranches up to $2 billion under Reg-S/144A, through a public offer and / or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2021-22,” the bank said.

Anupam Rasayan India | The company has received and signed a letter of intent amounting to Rs 1,100 crore from one of the top ten multinational life sciences company, for supplying life sciences related specialty chemicals.

Confident of good year despite COVID second wave uncertainty: Tata Elxsi CEO

Tata Elxsi’s fourth-quarter earnings came ahead of analyst estimates, with margins at a multi-quarter high, and up 230 bps quarter on quarter.  Quarterly revenue was up 8.5 percent sequentially. “Going forward there is a little bit of uncertainty with this second wave of COVID and so on but based on the order booking and the deals that we have won we are pretty confident that we will have another good year this financial year,” Manoj Raghavan, MD & CEO, Tata Elxsi told CNBC-TV18. He attributed deal wins to the steady uptick in revenues. Watch here.

Citi cuts FY22 India GDP estimates by 50 bps; warns of another 50 bps downside risk

Citi has lowered India’s GDP estimates for FY22 by 50 basis points, and its Chief Economist Samiran Chakraborty warned there was a risk of another 50 basis point hit. “We have dropped down our GDP growth forecast by 50 basis points from 12.5 percent to 12 percent. We have also highlighted another 50 basis points downside risk if this (COVID 2nd wave) persists a little while longer beyond the first quarter impact. At this moment we are only looking at the impact to be contained in the first quarter, but if it spreads to the second quarter, we might need sharper GDP downgrades,” he said in an interview to CNBC-TV18. Citi in its report has also indicated a sharp weakening of economic activity. Restrictions and fear factor among consumers are the main reasons for the drop in activity, Chakraborty said. Read here.

Morepen Laboratories | The company’s board has approved the investment proposed by Corinth Group, a global private investment Group headquartered in Switzerland, ‘to the extent of $32.50 million in the parent company, Morepen Laboratories, out of a total $100 million investment in the promoter group, subject to approval of the shareholders and other regulatory bodies.