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Informist, Thursday, Aug 29, 2024

By Noel John

MUMBAI – Headline equity indices marked a new record closing high today, led by gains in index heavyweight Reliance Industries. Gains in shares of fast-moving consumer goods, financial services and automobile companies also pushed up the indices. The Nifty 50 and the Sensex hit all-time highs of 25192.90 points and 82285.83 points, respectively. Though the indices were mostly higher throughout the day, trade turned volatile in the final hour due to the monthly expiry of the August derivatives series. 

The Nifty 50 and Sensex ended 0.4% higher each at 25151.95 points and 82134.61 points, respectively. The Nifty 50 index has now extended gains for the 11th straight session and the Sensex for the eighth successive session. The support for the 50-stock index is now pegged at 24950 points, while the resistance is seen at 25300 points. The market was volatile towards the end of the session due to sharp movements in stocks traded in the futures and options segment owing to the monthly expiry today, Sunny Agrawal, head of fundamental equity research at SBI Securities, said. 

The Nifty 50 index has been moving in a narrow range for the past couple of sessions and some traders unwound their long positions towards the end of the day, said Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market. The volatility was also triggered by rollovers and position adjustments by traders towards the end of the session, Saral Seth, vice president of institutional equities at IndSec Securities, said. 

"The monthly expiry day was a roller-coaster ride for participants, ultimately ending on a positive note," Ajit Mishra, senior vice president of research at Religare Broking, said in a note today. Although the benchmark indices ended higher, the disappointment was due to the underperformance of the broader market indices, Mishra said. All broader market indices ended in the red today due to concerns regarding expensive valuations, analysts said. 

Index-heavyweight Reliance Industries was the major contributor to the rise in the Nifty 50. The stock rose sharply after the company said its board would meet on Sep 5 to consider a one-for-one bonus issue of shares. Shares of the company remained higher throughout its annual general body meeting, which started at 1400 IST. Shares of Reliance usually rise before the annual general body meeting on hopes but tend to correct after the event, Prashanth Tapse, senior vice president of research at Mehta Equities, said in a note. 

Shares of Tata Motors rose sharply in the last half-an-hour of trading and ended 4.4% higher at 1,121.65 rupees to become the top gainer in the Nifty 50 index. The sudden rise in the share price could be due to the positive rollovers to the September derivative series, said Seth of IndSec Securities. "Tata Motors witnessed a congestion zone breakout on the higher side and is all set to test 1,175 (rupees) and higher levels in the immediate near term," Kumar of Globe Capital Market, said. 

Shares of Bajaj Finserv and Bajaj Finance were also among the top gainers today. Shares of these companies are seeing buying interest ahead of the initial public offering of Bajaj Housing Finance, due early September, Shreya Khandelwal, research analyst at Nirmal Bang Institutional Equities, said. Bajaj Housing Finance is expected to list in mid-September and its parent company Bajaj Finance is looking to raise up to 70 bln rupees through this listing, which is boosting the shares, Khandelwal said. The initial public offering, comprises fresh issue of shares worth up to 40 bln rupees and an offer for sale of up to 30 bln rupees by Bajaj Finance.

Shares of Bajaj Finserv and Bajaj Finance could see some profit booking in the coming couple of sessions as all these fundamentals are priced in at current levels, Khandelwal said. However, the valuations are not stretched owing to the fall in these shares a couple of weeks ago due to regulatory concerns, the analyst said. The share price of Bajaj Finance is attractive at current levels as it could go up to 8,000 rupees, where it used to trade earlier, Khandelwal added. Shares of Bajaj Finance ended 2.4% higher at 7,063.55 rupees. 

FMCG stocks gained today, with those of Britannia Industries, ITC, and Nestle being some of the major gainers. FMCG companies are expected to report 5-6% volume growth for the June quarter, which is quite robust, said Seth of IndSec Securities. These companies are also expected to report a 6% rise in Jul-Sep volumes, Seth added. Further, a sell-off in the broader market has also attracted buyers to FMCG stocks given its defensive nature, he added. 

Shares of TV18 Broadcast ended nearly 8% higher, becoming the top gainer in the Nifty 500 index. The stock rose sharply today after the Competition Commission of India late Wednesday approved the joint venture that combines the businesses of Viacom18 and Disney's Star India. The combined entity will have a significant pricing power in the sports genre as it will create a monopoly, Jinesh Joshi, research analyst at Prabhudas Lilladher, said. "However, this is just an approval from the Competition Commission, and we have to wait and see how the merger will take place," Joshi added.

Shares of Sonata Software ended over 5% higher today, becoming one of the top gainers in the Nifty 500 index after the company secured a large "multi-year, multi-million dollar" deal for information technology outsourcing from a US healthcare and wellness company. The company did not name the client or disclose the amount of the contract. 

* Of the Nifty 50 stocks, 29 rose, 20 fell and 1 unchanged

* Of the Sensex stocks, 19 rose and 11 fell

* On the NSE, 964 stocks rose, 1,768 fell, and 82 were unchanged

* On the BSE, 1,420 stocks rose, 2,531 fell, and 96 were unchanged

* Nifty Oil & Gas: up 0.9%; Nifty FMCG: up 0.7%; Nifty Metal: down 0.5%

BSE                                               NSE
Sensex: 82134.61, up 349.05 points or 0.4%        Nifty 50: 25151.95, up 99.60 points or 0.4%

End

Edited by Saji George Titus

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