Stock Market Highlights: Indian equity benchmarks, Sensex and Nifty ended lower Friday after the Reserve Bank of India (RBI) kept the policy rates unchanged and maintained policy stance as ‘Accommodative’. Broader markets, smallcap and midcap indices ended marginally higher. Among sectors, pharma, realty, media and financial services indices witnessed selling pressure, while Nifty Auto, Nifty Private Banks, Nifty Metal Nifty PSU Bank and Nifty IT ended in the green.
Market This Week | Here's how the market performed this week
- Market Snaps 2-week Losses; Nifty & Sensex Up 3% This Week
- Nifty Bank Up Nearly 4% & Midcap Index Up Less Than 1%
- All Sectoral Indices Record Gains This Week; IT & Pvt Bank Top Gainers
- 41 Nifty Stocks Post Gains; Eicher, Bharti, HDFC, Kotak Top Gainers
- UPL, Bajaj Finserv, Grasim, UltraTech Top Nifty Losers This Week
Ajit Mishra, VP - Research, Religare Broking
Markets traded volatile for the second consecutive session and ended marginally lower. After the flat start, it traded range-bound till the end however movement on the stock-specific front kept the participants busy. In between, the announcement of the status quo on key rates with an accommodative stance from the RBI review meet fell in line with the expectation. However, the SC ruling regarding the Reliance-Future merger in favour of Amazon didn’t go well with the market and triggered a sharp reaction in Reliance and Future group stocks.
In absence of any major event, earnings and global cues will dictate the market trend. We suggest keeping a close watch on the banking and financial pack as they have the potential to further fuel the momentum. Going ahead, in case of any dip, the 16,150-15,950 zone would act as a cushion in the Nifty.
Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities
After rallying for four straight sessions and scaling new milestones, Nifty shed losses as investors booked profit in Reliance Industries and other select blue-chip stocks. The RBI's decision to keep the policy rates unchanged failed to woo investors as the status quo was already priced in the market. Technically, on weekly charts, the Nifty has formed a strong breakout formation, which indicates a further uptrend from current levels. We are of the view that the medium-term trend is bullish and buying on dips and selling on rallies would be the ideal strategy for the positional traders. The 16,150-16,050 level on Nifty would be the strong support zone for the index. Trading above the same, the uptrend wave is likely to continue till 16,400-16,550 levels. Below 16,050, breakout traders may prefer to exit from trading in long positions.
Deepak Jasani, Head of Retail Research, HDFC Securities
After forming a Doji on Thursday, the Nifty fell validating the reversal sign of a Doji. Over the week, however the Nifty was up 3.0% due to the gains in the early part of the week. However, Nifty Midcap 100 rose 0.49% while Nifty Smallcap 100 index fell 0.78% over the week, reflecting the pressure on the broader markets. Over the week, Banks, IT and Auto stocks did well while Media stocks fell. 15,962-16,146 could be the support band for the Nifty in the coming week while 16,337-16,349 could act as a resistance.
Rahul Sharma, Co-Founder, Equity99
Nifty going ahead has immediate support placed at 16,200 followed by 16,075 – 15,950 & similarly Resistance is placed at 16,300-16,385-16,450 levels. Bank Nifty which made a flat close at 35,809 has major support at 35,625-35,500-35,350 & Resistance at 36,000-36,200-36,350. Sectors which will remain in focus for Monday – Pharma, Real-Estate, Paper, Banks & IT.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The Nifty seems to have started consolidation or minor downward correction from the highs, as anticipated and this consolidation movement is likely to extend towards the early part of next week. The important lower supports to be watched for next week around 16,200-16,100 levels and that is going to be a buy on dips opportunity. We expect a sharp upside bounce from the dips by the mid to later part of next week. On a decisive move above 16,350, Nifty may head towards 16,500 levels.
Manish Shah, Founder, Niftytriggers.com
Nifty is catching a breather after a sharp spurt seen in the last couple of days. The gap area between 16,162-16,188 is the first line of defence for the bulls. In case Nifty closes below 16,162 there could be a 1-2 day decline to 15,950-16,000. In case of a decline to the zone between 15,950-16,000 will be a buy zone. The MACD oscillator is in a buy mode and the directional movement index is also in a bullish mode. The ADX is also rising which points out towards a possible fast trend emerging in the market over the next couple of weeks. On the weekly, we see a range expansion candle in an existing uptrend. This type of pattern usually points towards trend continuation. The prolonged eight-week sideways price action has resolved with a breakout on the upside.
On the upside potential for Nifty to move towards 16,500 is there. The only glitch is that there could be a short-term decline in the market. The mindset should be to buy on declines and dip to 16,000 would be that opportunity. If Nifty trades beyond the Weekly R3 pivot at 16,303 expect further upsides to 16,500 is likely.
Sachin Gupta, AVP- Research, Choice Broking
Technically, the benchmark index is trading in a bullish trend with higher highs & higher lows formation. In the recent candle, it has formed a Bearish Candlestick at the top of the trend, which indicates some correction in the index. Moreover, the Nifty50 index also slipped below the key level of 16,300 & Upper Bollinger Band formation. A momentum indicator RSI is hovering near the overbought zone. However, MACD & Stochastic is still showing further strength with positive crossover. At present, the nifty index has resistance at 16,350 levels while support comes at 16,100 levels.
Rupee At Close | The Indian rupee ended flat at 74.15 per dollar amid selling in the domestic equity market after the Reserve Bank of India (RBI) has kept the key policy rates unchanged. The local currency opened 7 paise higher at 74.10 per dollar against yesterday’s close of 74.17 and traded between 74.08-74.22.
Market Watch: Aman Chowhan, Fund Manager at Abakkus AMC
On IPOs | IPO space is looking interesting. Lots of new-age companies are coming in which is good for the market and that is where the future lies. Just a bit of caution – these days for many IPOs retail investors are looking at a grey market premium if they are investing than the balance sheet or profit and loss (P&L), this is something which is not advisable according to us. They are good companies but be careful of what you are getting into. We are looking at IPO markets very selectively. Companies, where valuations are decent with good growth prospect, is something that we are investing in.
On EaseMyTrip | EaseMyTrip has always been profitable and that is where the focus lies. As the economy opens up, as air travel becomes more widespread, people with vaccinations start moving out then the business is going to increase and with the fixed cost, there can be a disproportionate increase in profits. That is the broad thesis in the stock that we have. Outlook is looking quite interesting.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
The Nifty took a breather today which is possibly due to the weekend knocking on the doors. The overall trend of the market continues to remain bullish and any dip or correction should be utilized to go long. 16,300 is the short term resistance that was crossed yesterday and today as well. If we can keep above that level, the index should zoom to 16,500-16,600.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research
The market witnessed some lackluster movement and an attempt to hold the support level around the Nifty50 Index level of 16,200. The expected levels of the market are likely to be in the range of 16,200 and 16,500, and it is going to be crucial for the short-term market scenario to sustain above the 16,200 Nifty50 Index level. The momentum indicators like RSI and MACD indicating a positive outlook to continue.
Market At Close | Sensex & Nifty end in the red for the first time this week. Market breadth favours advances; advance-decline ratio at 5:4.
Market At Close | Here are the highlights of today's trading session
- Sensex & Nifty End In The Red For The 1st Time This Week
- Nifty Falls 56 points To 16,238 & Sensex 215 points to 54,278
- Midcap Index Rises 16 Points To 27,946 While Nifty Bank Falls 26 Points To 35,809
- Reliance Drags Nifty By 34 Points While HDFC Bank & TCS Lift
- Cipla Sees Profit Booking After Q1 Earnings, Stock Down More Than 3%
- Hindalco Fails To Hold Gains Seen After Earnings, Closes 3% Off Highs
- IndusInd Bank Rises Along With Vodafone Idea & IDFC First Bank
- Voda Idea Sees Sharp Uptick In Last Two Sessions, Up 56% Of This Week Low
- Metropolis, Muthoot, Guj Gass & Berger Slip While AU SFB, Alkem Gain Post Q1 Earnings
- Tata Chem Rises Over 7% After Better-than-expected Q1, GAIL Up Over 4% Too
- Future Group Stocks Come Under Pressure After SC’s Order In Favour Of Amazon
- Adani Group Stocks Higher In Friday’s Trade, Adani Ports Up 2%, Adani Ent Up 7%
- Market Breadth Favours Advances; Advance-Decline Ratio At 5:4
Closing Bell | Indian equity benchmark indices ended lower Friday after the Reserve Bank of India (RBI) kept the policy rates unchanged. The Sensex fell 215.12 points, or 0.39 percent, to end at 54,277.72, while the Nifty closed 56.40 points, or 0.35 percent lower at 16,238.20. Broader markets, smallcap and midcap indices ended marginally higher.
Among sectors, pharma, realty, media and financial services indices witnessed selling pressure, while Nifty Auto, Nifty Private Banks, Nifty Metal Nifty PSU Bank and Nifty IT ended in the green. Cipla, Reliance Industries, Shree Cements, UltraTech Cement and Tata Steel were the top Nifty50 losers, while IndusInd Bank, Adani Ports & SEZ, Tech Mahindra and Tata Consumer Prodcts were the top index gainers.
Anjana Potti, Partner, J Sagar Associates on RBI Policy
The monetary policy reflects the overall market sentiment of ‘wait and watch’ with the projected GDP, inflation and liquidity being more or less constant. The MPC believes that continuing the accommodative stance will nurture the emerging and cautious recovery in the domestic economy in the relatively uncertain financial environment which will go a long way in turn to reduce the uncertainty in the market factors for investors. In keeping with the accommodative stance, the RBI has also extended the TLTRO and marginal standing facility up to September 30, 2021, and December 31, 2021, respectively continuing to ease liquidity pressures on NBFCs and banks and boosts access to funds by the market.
Considering the impact that the transition from LIBOR will have on the financial market, the RBI has decided to amend the guidelines related to export credit in foreign currency and restructuring of derivative contracts to permit the adoption of a widely accepted alternative reference rate in the relevant currency. As a consequence of such impending amendments the transition to an alternative reference rate will not be treated as a ‘restructuring’ under the ‘Prudential Norms for Off-balance Sheet Exposures of Banks – Restructuring of Derivative Contracts’.
Market Watch: Prakash Diwan Market Expert
If Vodafone Idea were to survive, in whichever way, but the time to buy is once you see that solution; you cannot bet your money on binary trade and you will not make too much. However, if things were to improve, you will get ample opportunity for price discovery even if it’s higher than what you thought it was when you started thinking about it. So stay out till there is clarity. There is far easier money to be made with the same sector on some of the stronger names like Bharti Airtel.
Vodafone Idea surges over 20% in a rebound after 4 days of losses
Vodafone Idea shares bounced back on Friday to break a four-day losing streak that had taken away 28 percent of their value. The rebound in the Vi stock came after the government moved to amend a law that would nullify retro tax demands from businesses. On Thursday, the government introduced a bill in the Lok Sabha that would bury retrospective tax by amending the Income Tax Act. Now no retro tax will be applicable for indirect tax transfer of Indian assets made before May 28, 2012. The new legislation is expected to benefit companies like Vodafone that are battling arbitration cases due to the law, as it seeks to withdraw retrospective amendments to the law that had raised demands on businesses.
Muthoot Finance Q1 Analysis | Muthoot Finance reported a 16 quarter low net interest margin (NIM) of 12.93 percent versus 14.27 percent QoQ. This led to a miss on net interest income (NII) and profit after tax (PAT) versus CNBC-TV18 polls on the same. Asset quality deteriorated sharply, especially for the housing finance subsidiary (for second quarter in a row). The housing finance subsidiary has been under pressure for three quarters in a row, reports CNBC-TV18's Abhishek Kothari. Muthoot Finance's Gross NPA was at Rs 640.8 crore versus Rs 464.1 crore, up 38.1 percent QoQ. Gross NPA was at 1.22 percent versus 0.88 percent. Asset under management growth remained healthy at 27.4 percent YoY & flat QoQ. Operating profits of the company was at Rs 13,334 crroe, down 2 percent QoQ; seeing a consecutive QoQ decline for the second time in a row.
Piramal Enterprises Q1FY22 | The company's consolidated net profit rose 8.8 percent to Rs 539.4 crore from Rs 495.6 crore, while revenue fell 1 percent to Rs 2,908.7 crore as against Rs 2,937.3 crore, YoY. EBITDA decreased 13.7 percent to Rs 1,549.8 crore from Rs 1,795.5 crore and EBITDA margin narrowed to 53.3 percent from 61.1 percent, YoY.
AU Small Finance Bank Q1FY22 | The bank's net profit was at Rs 203.2 crore against CNBC-TV18 Analysts' Poll estimates of Rs 183.5 crore. Net interest income (NII) was at Rs 724 crore against estimates of Rs 675.2 crore. Gross NPA increased to 4.31 percent from 4.25 percent and net NPA also rose to 2.26 percent from 2.18 percent, QoQ.
Dhiraj Relli, MD & CEO, HDFC Securities
As expected MPC voted unanimously to leave the policy repo rate unchanged at 4%; but what was unexpected was the divided view (5 to 1 majority) in keeping the stance accommodative. The RBI has noted that India’s economic activity picked up pace in June-July as some states eased pandemic containment measures. On the inflation front, the RBI has nudged the Govt to take more concerted steps to ease supply constraints to restore the supply-demand imbalance. The RBI is hopeful of pick up in credit demand but worried about the state of MSMEs. Going by the overall outcome of the MPC meet, one wonders whether we have begun the normalisation process in a small way.
Muthoot Finance Q1FY22 | The company's net profit rose 15.5 percent to Rs 971.1 crore from Rs 840.8 crore and revenue increased 13.8 percent to Rs 2,713.8 crore as against Rs 2,385 crore, YoY. Net interest income (NII) was at Rs 1,701.5 crore as against Rs 1,444.5 crore, up 17.8 percent YoY and versus Rs 1,837.8 crore, down 7.4 percent, QoQ.