Informist, Tuesday, Jan 2, 2024
By Anjana Therese Antony
MUMBAI – The southward journey of financial services stocks continued to weigh on the Indian equities market today as the benchmark indices closed lower after tumbling sharply during the day. Investors rushed to take their profits out from an overbought market. Most financial stocks plunged, possibly on selling for profit.
The prevailing valuations of Indian equities are trading at a premium to their historical averages, though they remain attractive from a longer term standpoint, Mirae Asset Mutual Fund said in its 2024 equity outlook report. "Going into 2024, we remain constructive on equities and believe India is on the cusp of achieving robust growth over the next few years," the report said.
Today, the Nifty 50 closed 76.10 points, or 0.4%, lower at 21665.80 points and the BSE Sensex ended 379.46 points, or 0.5%, lower at 71892.48 points. Both indices plunged over 1% during the day. The immediate support for the 50-stock index is now pegged at 21600-21550 points and resistance at 21800 points. A few technical analysts said the Nifty 50 could see significant upside only if it surpasses the immediate hurdle. Till then, the weakness is likely to persist.
The broader market indices, which hit fresh all-time highs in early trade, soon slipped into the negative zone. The Nifty mid-cap and small-cap indices ended the day 0.1-0.3% lower.
The fall in financial services stocks contributed to a loss of nearly 0.2% in the Nifty 50. All indices related to the sector--Nifty PSU Bank, Nifty Financial Services, Nifty Bank, and Nifty Private Bank--closed 0.4-1.2% lower. A technical analyst at a broking firm said the Nifty Bank index may underperform the others in the next session. Support for the index is pegged at 47200 points and resistance at 48500 points for the near term. Today, the index closed 1% lower at 47761.65 points.
However, IDBI Capital Markets & Securities said it expects the credit growth of banks to remain in the range of 14-15%, led by higher retail credit growth and the revival of corporate credit. "Going forward, we need to watch for the impact of increased risk weight changes in personal loans, credit cards, and NBFCs (non-banking finance companies) on credit growth for FY24," the brokerage's report said.
Information technology stocks also inched lower. Jefferies, in a research report, said it expects the IT companies it covers to report soft sequential revenue growth in the December quarter on account of the impact of furloughs, which likely led to softer deal wins in the quarter.
The broking firm also raised concerns about the rich valuations of these stocks. With the earnings season set to kick off soon, investors will focus on the comments of company managements on the trend in discretionary spending, the demand environment, deal pipeline, and revenue growth guidance for the current financial year, two analysts tracking IT companies said.
In the automobile pack, weak wholesale numbers from original equipment manufacturers led to their stocks shedding up to 4%, said Avdhut Bagkar, technical and derivatives analyst at StoxBox, in a post-market note. While shares of Mahindra & Mahindra and Eicher Motors fell sharply, those of Tata Motors and Maruti Suzuki India closed marginally lower.
On the other hand, shares of pharmaceutical and healthcare stocks played the defensive role to the hilt and climbed higher to become the top sectoral gainers. The rise in number of COVID-19 cases in India along with an increase in revenue per operating bed could be a reason for the upside in these stocks, Prathamesh Masdekar, a research analyst at BP Wealth Management, said.
Gains in the pharma segment pushed the Nifty Pharma and Nifty Healthcare indices to fresh all-time highs. Shares of Lupin closed 6% higher at 1,394.35 rupees after Nuvama Institutional Equities raised the target price of the stock by 23.5% to 1,539 rupees. Nifty 50 constituent Divi's Laboratories hit its 19-month high of 4,052.10 rupees.
Among other stocks, Adani Ports and Special Economic Zone was the top gainer on the Nifty 50, closing nearly 3% higher at 1,078.40 rupees. The company's December cargo volumes rose 42% on year to 35.65 mln tn, and it raised its 2023-24 (Apr-Mar) cargo volumes target to over 400 mln tn from the earlier 300 mln tn. The company said it crossed the mark of 300 mln tn of cargo handled in just 266 days this financial year.
Vodafone Idea nosedived after the company clarified that it was not in talks with Elon Musk-owned Starlink. The stock had gained significantly on Monday after a report said Starlink was looking to tie up with the telecom player to enter the Indian telecom space.
* Of the Nifty 50 stocks, 20 rose and 30 fell
* Of the Sensex stocks, 7 rose, 22 fell, and 1 was unchanged
* On the BSE, 1,906 stocks rose, 1,904 fell, and 119 were unchanged
* Nifty Private Bank: Down 1.17%; Nifty Auto: Down 1.37%; Nifty Pharma: Up 2.46%
BSE NSE
Sensex: 71892.48, down 379.46 pts, or 0.53% Nifty 50: 21665.80, down 76.10 pts, or 0.35%
S&P BSE Sensitive Index Nifty 50
Lifetime High: 72561.91 (Jan 1, 2024) : Lifetime High: 21834.35 (Jan 1, 2024)
Record Close High: 72410.38 (Dec 28, 2023) : Record Close High: 21778.70 (Dec 28, 2023)
2024 1st day close: 72271.94 (Jan 1) : 2024 1st day close: 21741.90 (Jan 1)
2024 Closing High: 72271.94 (Jan 1) : 2024 Closing High: 21741.90 (Jan 1)
2024 Closing Low: 71892.48 (Jan 2) : 2024 Closing Low: 21665.80 (Jan 2)
2024 High (intraday): 72561.91 (Jan 1) : 2024 High (intraday): 21834.35 (Jan 1)
2024 Low (intraday): 71613.74 (Jan 2) : 2024 Low (intraday): 21555.65 (Jan 2)
2023 1st day close: 61167.79 (Jan 2) : 2023 1st day close: 18197.45 (Jan 2)
2023 Closing High: 72410.38 (Dec 28) : 2023 Closing High: 21778.70 (Dec 28)
2023 Closing Low: 59288.35 (Feb 27) : 2023 Closing Low: 17311.80 (Oct 17)
2023 High (intraday): 72484.34 (Dec 28) : 2023 High (intraday): 21801.45 (Dec 28)
2023 Low (intraday): 58699.20 (Jan 30) : 2023 Low (intraday): 17098.55 (Jan 17)
2022 1st day close: 59183.22 (Jan 3) : 2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 63284.19 (Dec 1) : 2022 Closing High: 18812.50 (Dec 1)
2022 Closing Low: 51360.42 (Jun 17) : 2022 Closing Low: 15293.50 (Jun 17)
2022 High (intraday): 63583.07 (Dec 1) : 2022 High (intraday): 18887.60 (Dec 1)
2022 Low (intraday): 50921.22 (Jun 17) : 2022 Low (intraday): 15183.40 (Jun 17)
2021 Closing High: 61305.95 (Oct 14) : 2021 Closing High: 18338.55 (Oct 14)
2021 Closing Low: 46285.77 (Jan 29) : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 61353.25 (Oct 14) : 2021 High (intraday): 18350.75 (Oct 14)
2021 Low (intraday): 46160.46 (Jan 29) : 2021 Low (intraday): 13596.75 (Jan 29)-
2020 Closing High: 47751.33 (Dec 31) : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23) : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31) : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24) : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20) : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19) : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28)) : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23) : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26) : 2017 High(intraday): 10515.10 (Dec 26)
End
With inputs from Team Informist
Edited by Rajeev Pai
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