Informist, Tuesday, Sep 26, 2023
By Maitri Seth
MUMBAI – Analysts expect the Nifty 50 index to remain trapped in a range of 19600-19750 points on Wednesday, and peg 19600 levels as strong support for the index which can keep the downside limited. Market participants believe that the ongoing sideways movement will continue until the derivative contracts of the Nifty 50 expire on Thursday.
Further, "there is indecisiveness in the market," said Ameya Ranadive, equity research analyst with Choice Broking, while adding that he expects indices to move sideways for a few more sessions. He further said there is hardly any strength in the market, especially in heavyweight stocks such as Reliance Industries, HDFC Bank, and ICICI Bank.
Today, both the Nifty 50 and Sensex closed 0.1% lower at 19664.70 points and 65945.47 points, respectively. In the broader market, most mid-cap indices ended in the red, replicating similar momentum. However, buying was seen in small-cap stocks and all the three major small-cap indices closed 0.4-0.7% higher.
"There is heavy call writing at 19850 calls, so investors do not seem to have expectations of markets posting strong gains," added Ranadive.
Analysts also attributed the current indecisiveness to mixed cues from global markets. On one hand, US indices are gradually recovering after digesting hawkish comments from the US Federal Reserve, on the other, Asian indices are still witnessing selling due to Fed officials' comments. Meanwhile, indices in China and Hong Kong were also impacted after a dip in property developer Evergrande Group's shares led to selling in other property stocks.
"Also mounting concerns over China's real estate sector, FIIs (foreign instituTional investors) offloading in domestic equities dampened the sentiments. However, momentum is seen in Auto and defensive sectors like FMCG," said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
However, Ruchit Jain, lead research analyst at 5Paisa said, amid uncertainty in global cues and selling ahead of the monthly expiry, what is limiting the losses is consistent buying from domestic institutional investors, which is likely to continue due to strong domestic data such as India's GDP in recent months.
"The opening up of the sovereign bond market and resultant inflows are likely to be beneficial for the Indian equity returns due to the positive impact on growth and likely softening implications on interest rates," said Morgan Stanley on the implications of India's government bond inclusion in the Global Bond Index-Emerging Markets Suite on the stock market.
For Tuesday, analysts will watch out for US consumer confidence index data for September, due later today, followed by Bank of Japan's monetary policy meeting minutes, scheduled before market hours on Wednesday. Japan will also release its services producer price index for August on Wednesday, before Indian market hours.
Among sectors, analysts are positive on metals, fast-moving consumer goods, and pharmaceuticals, as they are likely to perform better. However, market participants do not see heavy gains in any sector until the monthly contracts of the Nifty 50 expire.
Market participants are also positive about information technology companies ahead of the announcement of their Jul-Sep earnings. "We believe market is taking the view that the worst is over and that revenue or earnings will accelerate sharply in FY25," said Nirmal Bang Institutional Equities on IT companies.
Among specific stocks, Tata Steel, Tata Consumer Products, and Jubilant Foodworks appear "good" on the technical charts and can see gains on Wednesday. The Moody's Investors Service's rating upgrade on Tata Steel has improved the sentiment for the stock, analysts said.
Further, shares of SignatureGlobal (India) will get listed on the bourses on Wednesday. Shares of Vedanta may fall after Moody's Investors Service downgraded the company's corporate family rating to Caa2 on high debt restructuring risks. End
Edited by Manisha Baxla
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