More Stories

Informist, Thursday, Sep 5, 2024

By Noel John

MUMBAI – Headline equity indices ended yet another session in the red after their long winning streaks in the past three weeks. The benchmark indices opened slightly higher today tracking trends from their Asian peers, but shed gains within the first half of the session. The fall in shares of index heavyweight Reliance Industries weighed the most on the indices.

RIL's shares were among the worst performers in the Nifty 50 after the company approved a one-for-one bonus issue. The record date for the issue will be announced later, as per a press release from the company. The company also increased its authorised share capital to 500 bln rupees from 150 bln rupees. The stock is expected to be bound in a range in the short term with support at 2,890 rupees and resistance at 3,100 rupees, Vipin Kumar, senior technical and derivatives analyst at Globe Capital Market, said.

Today, the Nifty 50 and the BSE Sensex ended 0.2% lower each at 25145.10 points and 82201.16 points, respectively. The 50-stock index is now expected to find support at 24950 points while the resistance is seen at 25350–25600 points, according to technical and derivatives analysts. Shares of select fast-moving consumer goods, financial services, and automobile companies were the major laggards.

"Indices are consolidating in a range, which just seems to be a time-wise correction. We may see such a trend continuing for a few days," Ruchit Jain, lead research analyst at 5paisa, said. According to Jain, the next trigger for the market would be the US Federal Open Market Committee meeting outcome on Sep 18.

Investors have been parking money in defensive-sector stocks such as FMCG and pharmaceuticals in the past few days. "Markets are going defensive. Buying is visible in pharma, FMCG, and IT while the broader market is showing signs of exhaustion," Saral Seth, vice-president of institutional equities at IndSec Securities, said. Going forward, Seth expects the market to be driven by stock-specific movements, like today. Brokerage SBI Mutual Fund remains of the view that increasingly the market will become more discerning and move back towards companies which have strong business models, long-term earnings growth visibility, and sustainable cash flows.

Shares of pharmaceutical companies, which traded higher throughout the day, fell in the latter part of the session as investors took out profits following the recent gains. "The pharma sector has experienced a notable rally recently, with some stocks reaching new all-time highs," said Maitri Sheth, research analyst at Choice International. "While certain companies may now be trading at high valuations, we still see the potential for further upside in select companies," she said. According to Sheth, the sector looks promising, driven by growth opportunities from new product launches, stabilised price reductions in the US, and solid capital expenditure plans.

Shares of Prestige Estates Projects ended 4.6% lower, becoming the worst performer in the Nifty 200 index. The company raised 50 bln rupees by selling shares to institutional investors through private placement. It launched its qualified institutional placement on Aug 29 to raise funds. The issue price of 1,674 rupees per share was at a 4.6% discount to the floor price of 1,755.09 rupees per share. 

After its listing on the bourses, shares of Raymond Lifestyle hit the 5% lower band of 2,869 rupees. The stock is expected to fall further owing to its extremely high valuation, Seth of IndSec Securities said. On Tuesday, shares of parent company Raymond rose sharply on news of the listing of its apparel business.

On the upside, shares of Titan Co were the top gainer in the Nifty 50 index and ended 3.2% higher at 3,722.85 rupees. The sentiment towards the stock has improved after the import duty cut on gold and silver in July, a head of research with a domestic brokerage said.

Investors' sentiment towards the stock has improved ahead of the festive season as demand is expected to pick up, the head of research said. The target price of the stock is 3,958 rupees, according to the research head. Earlier, investors were pessimistic about the company's growth prospects owing to concerns about demand growth, but now the outlook has improved, especially after the import duty cut, the head of research said.  

Shares of Easy Trip Planners rose sharply and ended nearly 11% higher to become one of the top gainers in the Nifty 500. The stock rose after its board approved the incorporation of a wholly-owned subsidiary for manufacturing electric buses. The new subsidiary, Easy Green Mobility, will build a plant with a capacity of 4,000-5,000 buses in the initial phase, and ramp up capacity going forward. The company will also invest 2 bln rupees in research and development, product development, and setting up the manufacturing plant over the next 2-3 years.

Zomato ended 4.9% higher at 254.85 rupees and was the top gainer in the Nifty 200. The stock rose after brokerage JP Morgan raised its target price by 63% to 340 rupees from 208 rupees earlier. Zomato is spearheading a rapid retail consumer transformation through its quick commerce business Blinkit, which will have a way to scale faster than its peers and current targets, JP Morgan said, CNBC TV18 reported.

Cholamandalam Investment and Finance Co's stock ended 3.1% higher at 1,533.60 rupees after brokerage Goldman Sachs initiated coverage on the stock with a 'buy' rating. The brokerage set the target price for the stock at 1,786 rupees. Goldman Sachs expects the company to gain market share amidst the commercial retail upcycle and said it is a structurally better earnings growth story, as per a post by ET Now on social media platform X.

The broader market indices ended sharply higher, outperforming the benchmarks. All Nifty Midcap and Nifty Smallcap indices hit record highs. "Broad market valuations are expensive at 23x one year forward, which is at elevated levels. A correction is definitely on the cards," Seth of IndSec Securities said. 

* Of the Nifty 50 stocks, 18 rose and 32 fell

* Of the Sensex stocks, 11 rose and 19 fell

* On the NSE, 1,618 stocks rose, 1,117 fell, and 73 were unchanged

* On the BSE, 2,249 stocks rose, 1,679 fell, and 110 were unchanged

* Nifty Realty: down 1%; Nifty Energy: down 0.8%; Nifty Media: up 0.8%

BSE                                               NSE
Sensex: 82201.16, down 151.48 points, or 0.2%     Nifty 50: 25145.10, down 53.60 points, or 0.2%

End

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.