Market highlights: Sensex gains 750 pts, Nifty just under 21,000 at close; IT stocks surge

The rupee closed marginally higher at 82.88 per US dollar from its previous close of 82.92.

Benchmark indices ended higher for the fifth session in a row. At close, the Sensex was up 759.49 points or 1.04% at 73,327.94, and the Nifty was up 202.90 points or 0.92% at 22,097.45.

“The Indian rupee rose to a three-and-half-month high as domestic markets touched fresh all-time highs today amid a weak US dollar. However, the rupee lost early gains as WPI rose 0.73% yoy in December 2023 vs 0.26% in the previous month, but lower than forecast of 0.9%. 

“Friday’s retail inflation too rose 5.69% in December 2023 compared to 5.55% in November 2023 but lower than forecast of 5.87%. India’s industrial production increased by to 2.4% in November 2023 compared to 11.7% in October 2023. The US dollar eased on rate hike expectations in the markets and positive global markets.

“We expect the rupee to trade with a slight positive bias on a weak US dollar and positive global markets. Expectations of fresh inflows from foreign investors may also support the rupee. 

“However, a surge in global crude oil prices and escalation of geopolitical tensions in the Middle East may cap sharp gains. Traders may remain cautious ahead of India’s trade balance data. USDINR spot price is expected to trade in the range of ₹82.50 to ₹83.20.”

Sebi has issued guidelines for alternative investment funds (AIFs) on holding their investments in dematerialised form and appointing a custodian. 

The new framework mandates that any investment made by an AIF after 1 October, 2024 must be held in dematerialised form, Sebi wrote in a circular.

Euro-zone government bond yields rose after the European Central Bank warned that cutting interest rates too fast may prove self-defeating.

Markets have been quick to bet that the ECB would slash interest rates this year with inflation seemingly close to falling back towards target, but policymakers have urged caution and tried to downplay expectations.

Global stocks held steady on Monday, with US markets closed for a holiday, while Chinese equities fell slightly after the country’s central bank wrong-footed investors by skipping on a rate cut.

MSCI’s world stock index was unchanged in morning trading in Europe. It has fallen around 0.35% so far this year after rallying 20% in 2023.

China’s CSI 300 index fell to its lowest since 2019 but recovered to stand 0.1% lower as investors digested the central bank’s decision to leave its medium-term policy rate unchanged on Monday, defying expectations of a cut.

At 3 pm the Sensex was up 774.94 points or 1.07% at 73,343.39, and the Nifty was up 207.80 points or 0.95% at 22,102.30.

Shares of Man Industries India Ltd surged 12% to hit a 52-week high after the company said in a stock exchange filing that it had received an order worth ₹400 crore. 

Pidilite Industries has partnered with Italian firm Syn-Bios, which conducts R&D and global marketing in the leather-tanning industry.

Under the deal, Pidilite will handle sales and distribution of Syn-Bios products in India, Sri Lanka, Bangladesh, Nepal, and Vietnam. The companies will also look to offer comprehensive solutions for the leather industry, Pidilite Industries wrote in a stock exchange filing.

-Buy call, target cut to ₹760 a share

-FY24 a washout year

-Company reported growth moderation in Q3FY24, with its individual/total APE declining 4%/7% year-on-year

-VNB declined 3% yoy, lower than the APE decline

-VNB decline lead to expansion in VNB margins by 40/50 bps yoy/qoq to 26.9% in Q3FY24

-In 9MFY24, total APE/VNB growth stood at 5% yoy

Shares are Tata Consumer Ltd are currently down around 1% on the NSE. The FMCG company has agreed to acquire a 100% stake in Capital Foods for ₹5,100 crore and Organic India for ₹1,900 crore.

At 2 pm the Sensex was up 652.67 points or 0.90% at 73,221.12, and the Nifty was up 171.80 points or 0.78% at 22,066.30.

The board of directors of Manorama Industries has approved a split of the company’s equity shares with face value of ₹10 each into 5 equity shares with face value of ₹2 each. The stock is current down 5.87% at ₹2,040.

Gold prices rose ₹188 to ₹62,550 per 10 grams in futures trade on Monday as speculators created fresh positions on a firm spot demand. On the Multi Commodity Exchange, gold contracts for February delivery traded up ₹188 or 0.3% at ₹62,550 per 10 grams in a business turnover of 9,411 lots.

Fresh positions built up by participants led to a rise in gold prices, analysts said.

Globally, gold futures increased by 0.34% to $2,058.50 an ounce in New York.

Asset management firm Lexdale International has sold about 2.62 crore shares of the FSN E-Commerce Ventures, the parent company of Nykaa, for ₹495.4 crore in open-market transactions at an average price of ₹188.83 a share.

The Adani Group is set to hold non-deal roadshows in Europe from Monday to Thursday as part of the group’s fundraising efforts to support its investment plans, NDTV reported. Jefferies has organised the roadshow, which comprises private meetings between institutional investors and the company’s management. The group’s stocks are currently trading flat.

At 1 pm the Sensex was up 616.75 points or 0.85% at 73,185.20, and the Nifty was up 165.80 points or 0.76% at 22,060.30.

Its subsidiary Genesis Gas Solutions has completed the incorporation of IGL Genesis Technologies, a joint venture with Indraprastha Gas (IGL). The stock is currently up 8.53% at ₹7.

Wholesale price index (WPI)-based inflation came in at 0.73% for December 2023, up from 0.26% in November, according to the data from the commerce ministry. 

“Positive rate of inflation in December 2023 is primarily due to increase in prices of food articles, machinery & equipment, other manufacturing, other transport equipment and computer, electronics & optical products, etc,” the ministry said.

The company recorded 22.3% year-on-year growth in net profit at ₹92 crore in the December quarter. Revenue from operations rose 19.7% to ₹265 crore.

“We believe that all the one-offs and adjustments due to the merger have been reflected in the financials of HDFC Bank and expect the bank to post robust performance on all fronts hereon.

“We believe that the bank will have strong business growth due to increased branches and effective execution from the sales team, which was aided by the festive season. 

“Deposits are likely to witness healthy growth in Q3FY24 due to attractive interest rates and increased mobilization of term deposits (TDs). However, its CASA may have a marginal impact due to increased traction in the TDs. 

“NIMs are likely to be range-bound between 3.4% and 3.6% due to high cost of funds. We expect an improvement in profitability and return ratios due to increasing disbursements, mainly to construction finance. 

“As HDFC Bank has taken care of the non-retail book of erstwhile HDFC Ltd. in the previous quarter itself, we do not foresee further run down in asset quality in the current as well as upcoming quarters. 

“We expect the bank to have healthy liquidity coverage ratio due to the merger effect, with return ratios aided by robust growth visibility in top line from various loan segments. 

“Additionally, a better mix of loan originations, particularly focused on the retail shift, would help the bank to outperform its peers in the industry.”

Tokyo shares ended higher for a sixth straight session on Monday, with the Nikkei again hitting a nearly 34-year high, as a sense of relief spread after Taiwan’s elections. 

The benchmark Nikkei 225 index climbed 0.91% or 324.68 points to end at 35,901.79, while the broader Topix index gained 1.22% or 30.37 points to 2,524.60.

At 12 pm the Sensex was up 596.55 points or 0.82% at 73,165.00, and the Nifty was up 160.00 points or 0.73% at 22,054.50.

The dollar fell on Monday as investors revived their bets of early rate cuts by the Federal Reserve, while the yuan fell to a one-month low after China’s central bank surprised markets by keeping its medium-term policy rate steady.

The euro hovered near $1.10 and was last 0.13% higher at $1.0964. The dollar index dipped 0.1% to 102.30, having largely drifted sideways in the past couple of sessions.

Shares of Indian Railways Finance Corporation (IRFC) hit a record high once again on Monday. The stock is now up five-fold from its IPO price of ₹26.

Mahindra Group and the Ontario Teachers’ Pension Plan Board have co-sponsored an Infrastructure Investment Trust (InvIT) holding assets in the renewable energy space. The InvIT, Sustainable Energy Infra Trust (SEIT), is believed to be India’s largest renewable-energy InvIT.

The company has received USFDA approval for propranolol hydrochloride extended-release capsules that are used to treat hypertension, migraines and anginas. The drug will be manufactured in the company’s Pithampur facility. It had sales of $71 million in the US from January to November 2023.

Shares of Zomato plunged over 4% to a day’s low of ₹133.35 on the NSE following a block deal that saw shares worth ₹621.68 crore change hands at ₹138.15 each.

Shares of HDFC Life Insurance fell more than 3% to ₹615 after its annual premium equivalent & value of new business declined by 2% year-on-year in Q2. Nomura reduced HDFC Life’s target price from ₹800 to ₹740 while Investec cut its target from ₹825 to ₹750.

At 11 am the Sensex was up 585.36 points or 0.81% at 73,153.81, and the Nifty was up 152.20 points or 0.70% at 22,046.70.

Adani New Industries, a wholly owned subsidiary, has won a contract from Solar Energy Corporation of India (SECI) to set up electrolyser-manufacturing capacity of 198.5 MW a year under the Strategic Interventions for Green Hydrogen Transition Scheme (Tranche-I).

“Last week, gold and silver exhibited significant volatility, displaying weakness in the early days but making a strong comeback on Friday. The recovery was attributed to heightened tensions in the Middle East following air-strikes conducted by the US and the UK in Yemen.

“The conflict between Israel and Hamas in Gaza has further escalated concerns, contributing to the safe-haven demand for precious metals. While the dollar index is trading steadily, US 10-year bond yields slipped below 4.0% levels once again, potentially supporting gold and silver prices.

“In today’s session, we anticipate continued volatility in gold and silver prices. Gold finds support at $2035-2024, with resistance at $2061-2072. Silver’s support is at $23.18-22.90, and resistance is at $23.44-23.60. In INR, gold has support at ₹62,080-61,910, with resistance at ₹62,540-62,710. For silver in INR, support is at ₹71,850-71,380, and resistance is at ₹73,250-73,780.”

Shares of HCL Technologies climbed nearly 4% to hit a day’s high of ₹1,619.60 on the NSE. The company clocked 13.5% sequential growth in profit at ₹4,350 crore in the December quarter, beating analysts’ expectations. Revenue grew 6.7% sequentially to ₹28,446 crore (6% in constant-currency terms).

The company has received USFDA approval for propranolol hydrochloride extended-release capsules that are used to treat hypertension, migraines and anginas. The drug will be manufactured in the company’s Pithampur facility. It had sales of $71 million in the US from January to November 2023.

“The rally in the market, primarily driven by momentum, is now getting support from fundamentals. The sharp bounce in large cap IT stocks on the back of slightly positive management commentary indicates that an underperforming segment can surprise on the upside on news of a turnaround in the sector. The IT index, which shot up by 5% on Friday, will remain firm since HCL Tech and Wipro have more room on the upside.

“Nifty has broken out on the upside from the consolidation range and shows signs of further up move. An important driver of the rally is RIL which is moving up on large delivery based buying on news of commissioning of the Dhirubhai Ambani Green Energy project in H2 of 2024. RIL, large cap IT and banking majors can provide fodder for the bulls in the near-term.”

At 10 am the Sensex was up 348.86 points or 0.48% at 72,917.31, and the Nifty was up 73.30 points or 0.33% at 21,967.80. 

Shares of Wipro opened 10% higher on Monday after its December quarter earnings surpassed muted expectations on Friday. The company’s constant-currency growth for the quarter fell 1.7%, while analysts estimated a 2.7% drop.

The company’s net profit rose 17.6% to ₹690.6 crore in the December quarter, while revenue grew 17.3%. Ebitda increased by 16%, while margin remained flat at 8.2%.

The company has signed agreements to acquire a 100% stake in Capital Foods for ₹5,100 crore and Organic India for ₹1,900 crore.

At open the Sensex was up 505.66 points or 0.70% at 73,074.11, and the Nifty was up 135.80 points or 0.62% at 22,030.30.

The rupee opened 11 paise higher at 82.81 per dollar against Friday’s close of 82.92.

Gold prices climbed for a third straight session on Monday as bullion held onto safe-haven gains from elevated tensions in the Middle East and after US producer prices data last week renewed bets for an early rate cut by the Federal Reserve.

Jio Financial, Angel One, Kesoram Industries, PCBL and several other companies will announce their third-quarter results today.

The US dollar ebbed on Monday on renewed expectations of a rate cut by the Federal Reserve in March, while the yuan fell to a one-month low after China’s central bank surprised markets by keeping its medium-term policy rate steady.

The company clocked 13.5% sequential growth in profit at ₹4,350 crore in the December quarter, beating analysts’ expectations. Revenue grew 6.7% sequentially to ₹28,446 crore (6% in constant-currency terms).

The company reported revenue from IT services of ₹22,150.8 crore in the December quarter, down 1.09% from the previous quarter. Revenue in dollar terms fell 2.1% sequentially to $2,656.1 million (1.7% in constant-currency terms).

The GIFT Nifty traded at a premium of more than 90 points, indicating a gap-up start for the market.

Brent crude traded near $78 a barrel and West Texas Intermediate was close to $73 even after the US followed up the initial strikes against targets in Yemen with a fresh attack on a radar installation. While the global benchmark was up more than 4% at one point on Friday it ended the session with a relatively modest gain of 1.1%.