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Informist, Wednesday, Sep 25, 2024

By Anshul Choudhary

MUMBAI – Benchmark indices touched fresh lifetime highs yet again, driven by hopes of interest rate cuts in India and better earnings growth in the second half of this financial year. Large-cap indices fared better than small- and mid-cap ones, which declined on concerns around high stock valuations.

Large private banks almost single-handedly took the market to new highs even as shares of select information technology and fast-moving consumer goods companies fell. As widely expected, the Nifty 50 closed above 26000 points for the first time, rising 0.3% today.

The Nifty 50 has gained 2.5% since the US Federal Reserve last week announced its decision to cut interest rates by 50 basis points. The Sensex also ended at its highest closing level, rising to 85169.87 points.

Shares of most large private banks were up on the day of the expiry of Nifty Bank derivative contracts. Among large-cap stocks, Axis Bank was the top gainer, rising 2.3%. "Axis Bank saw short-covering yesterday (Tuesday), and today, it saw long built up," Kapil Shah, technical analyst at Emkay Global Financial Services, said.

Shares of HDFC Bank were up for the sixth straight session, gaining 6.6% during this period, to close at 1,779.10 rupees. The stock rose to a new one-month high today and is just 15 rupees below its 52-week high. The bank's subsidiary HDB Financial Services inching closer to its debut on the exchanges and reports that the lender could offload loan assets to lower its credit-to-deposit ratio were some of the factors that boosted sentiment around the stock in the past several days. 

Brokerage firm HSBC maintained a "buy" rating on the stock and raised its target price to 2,010 rupees from 1,870 rupees, CNBC-TV18 reported. It raised the target price to factor in a higher multiple for the bank and for HDB Financial Services, which is set to float an initial public offer to raise 25 bln rupees.

Shares of Power Grid Corp of India rose nearly 4%, gaining the most among Nifty 50 constituents. The company is expected to benefit from the government's capital expenditure on transmission. Sentiment for the stock was positive after the revised National Electricity Plan showed that the government plans investment for 9.15 trln rupees by 2032.

Goldman Sachs said Power Grid is capable of funding 30% of India's grid capex estimates for the financial years between 2023-24 and 2031-32, according to Moneycontrol. The brokerage maintained its "buy" rating on the stock with a target price of 370 rupees. Shares of Power Grid closed at 363.75 rupees.

On the downside, most of the information technology stocks fell on concerns around their high valuations. Shares of LTIMindtree fell 3.8% and Tech Mahindra ended 2.1% lower. The Nifty IT index has lost nearly 2% so far this month after gaining over 32% during the previous three months.

Shares of Tata Consumer Products fell amid weak demand for its tea products--which is one of its largest segments. "Inflation in prices of tea continues to compel consumers to downgrade to lower-priced brands, with prices likely to further rise in the coming procurement season in 2HFY25 (Oct-Mar)," Emkay Global Financial Services said in a report. Shares of Tata Consumer closed 1.8% lower.

Within broader market indices, small-cap ones fell around 0.4% each and mid-caps were down 0.5-0.6%. Among mid-cap stocks, PB Fintech was down for the third straight session, falling nearly 11% in this period. The sharp fall in the stock this week came after significant gains in the previous two weeks, when it gained 12.6%. Despite falling this week, the stock is up nearly 50% in six months.

Shares of Zee Entertainment rose 5.7% after Subhash Ghai's production house Mukta Arts on Tuesday said it has entered into an agreement with Zee Entertainment for satellite and media rights for 37 films.

Within small-caps, shares of Easy Trip Planners declined over 16% after large deals on exchanges. Media reports suggested promoter Nishant Pitti offloaded part of his stake in the company. Among others, shares of Saregama India rose 16%.

* Of the Nifty 50 stocks, 30 rose and 20 fell

* Of the Sensex stocks, 20 rose and 10 fell

* On the NSE, 1,197 stocks rose, 1,594 fell, and 83 were unchanged

* On the BSE, 1,697 stocks rose, 2,256 fell, and 112 were unchanged

* Nifty Media: up 2.9%; Nifty Energy: 0.8%; Nifty PSU Bank: down 0.9%

BSE                                               NSE
Sensex: 85169.87, up 255.83 points or 0.3%        Nifty 50: 26004.15, up 63.75 points or 0.3%

End

US$1 = 83.59 rupees

Edited by Aditya Sakorkar

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