Key equity indices the Sensex and the Nifty ended flat yet again on April 21 as unimpressive March quarter numbers and weak global cues amid lingering concerns over rate hikes kept investors wary.
Major global markets in the US, Asia and Europe suffered losses as investors seek cues on the possibility of more rate hikes even as they remain concerned that a prolonged phase of rate hikes has created a strong possibility of a recession in the West.
Sensex closed 23 points, or 0.04 percent, up at 59,655.06 while the Nifty ended completely flat at 17,624.05.
Mid and smallcaps underperformed the benchmark; the BSE Midcap index closed with a loss of 0.36 percent while the Smallcap index ended 0.27 percent lower.
Heavyweight stock Reliance Industries ended flat ahead of its Q4FY23 numbers.
Brokerage firm Motilal Oswal Financial Services expects RIL's net sales to clock a minor gain of 0.8 percent year-on-year (YoY). Adjusted PAT may fall 0.3 percent YoY. Brokerage firm HDFC Securities expects RIL’s consolidated EBITDA to increase to ₹37800 crore, up 20 percent YoY and 7 percent QoQ.
ITC, on the other hand, ended as the top gainer in the Sensex index, clocking a gain of almost two percent. In intraday trade, the stock hit its fresh 52-week high of ₹409.
Sonam Srivastava, the founder of Wright Research believes the stock can gain further.
"The legal cigarette industry is gaining market share from illegal sales due to rational tax policy, which bodes well for ITC's cigarette business. Both the cigarette and FMCG sectors are expected to witness double-digit earnings growth in FY24, driven by good margin recovery in the FMCG business. ITC's valuation remains attractive compared to other consumer staples firms, even at the current all-time high, making it a strong choice for investors," said Srivastava.
"The hotel business may benefit from the company's focus on management contracts, which should improve return ratios and signal value unlock to investors. The paperboard and agribusinesses are also expected to perform well, driven by factors such as raw material cost corrections and government policies. Overall, ITC's upward trajectory and strong performance in key businesses like cigarettes and FMCG indicate a bright future for the company," Srivastava said.
For the week, both the Sensex and Nifty fell over a percent each while the mid and smallcap indices inched up by up to half a percent.
Oil prices eased for the third straight day on Friday and looked set for a hefty weekly loss as softening US economic data and a rise in US gasoline inventories raised concerns about a recession and slower global oil demand, reported Reuters. Brent Crude traded near the $81 per barrel mark.
The rupee rose by 6 paise to close at 82.10 per dollar.
Top Nifty gainers and losers
As many as 26 stocks ended in the red while 24 clocked gains in the Nifty50 index.
Shares of ITC (up 1.92 percent), TCS (up 1.75 percent) and Britannia Industries (up 1.73 percent) ended as the top gainers in the Nifty index.
On the flip side, those of HDFC Life Insurance Company down 3.16 percent), Tech Mahindra (down 2.25 percent) and Adani Enterprises (down 2.22 percent) ended as the top losers in the Nifty pack of stocks.
Realty, Metal, Auto lose big
Among the sectoral indices, Nifty Realty emerged as the top loser, falling 2.13 percent. It was followed by Nifty Metal and Auto indices, falling 1.37 percent and 1.03 percent, respectively.
Nifty Bank ended with a loss of 0.36 percent.
Nifty Media (up 1.33 percent), FMCG (up 0.89 percent) and IT (up 0.69 percent) rose up to a percent.
Experts' views on markets
Vinod Nair, Head of Research at Geojit Financial Services is of the view that the mounting uncertainty in both global and domestic markets has kept Indian equities highly volatile.
"Weak signals of a softening job market and declining manufacturing activity in the US have raised fears of a possible recession," said Nair.
"Despite the RBI MPC’s unanimous decision to pause rates, its minutes revealed that its members continue to hold concerns about high inflation," Nair said.
Shrey Jain, Founder and CEO of SAS Online pointed out that the current focus of the market is on the ongoing Q4 sector, which has a negative bias due to initial results falling below expectations, particularly in the IT sector, although some IT midcaps may exceed market expectations. However, banking is giving early signs of sustained strength.
"With global sentiment being cautious, due to the expectation of another rate hike and mixed earnings released in the US, the market trend has been impacted by the withdrawal of foreign institutional investors during the week," said Jain.
Technical views on markets
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas observed that the Nifty continued trading within the broad range of 17,500 – 17,860. During the day, the Nifty broke below 17,570, however, it pulled back from the support zone of 17,550 – 17,500 and closed above 17,600.
Gedia believes until there is a decisive break of this range the rangebound action is likely to continue.
"On a weekly basis, the Nifty has closed in the negative after three consecutive weekly gains which indicates a pause in the overall up move and until this week’s high of 17,863 is not taken out we can expect the consolidation to continue," said Gedia.
"On the downside, there are multiple supports in the range of 17,600 – 17,500 in the form of the 200- and 40-day moving average which shall provide a cushion in case of a fall. The momentum indicators on the daily and hourly timeframe are providing divergent signals and hence we shall assign more weightage to the price action and wait for a decisive move beyond the extremes of the range 17,500 – 17,860," said Gedia.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual experts. These do not represent the views of MintGenie.