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Informist, Friday, Nov. 29, 2024

By Anjana Therese Antony

MUMBAI – A surge in heavyweight stocks such as ICICI Bank, Reliance Industries, and Bharti Airtel pushed benchmark indices higher Friday, recouping most of the losses made a day earlier. However, analysts said the market may see periodic corrections in the near term and a sharp bounce-back is unlikely, particularly due to anticipation of lower returns, likely slowdown in interest rate cuts in the US, and slowdown in earnings growth of Indian companies.

Benchmark indices closed higher for the second consecutive week, rising nearly 3% each during this period. The Nifty 50 closed 0.9% higher at 24131.10 points and the BSE Sensex ended 1% higher at 79802.79 points. The near-term support for the 50-stock index is pegged at 24050-23970 points and resistance at 24280-24350 points, technical and derivatives analysts at two broking firms said. 

The domestic equity markets have fallen sharply for nearly two months. The sharp fall has brought stock valuations to comparatively better levels as they were seen to be expensive earlier. However, weak near-term cues are expected to lead to periodic corrections, analysts said. 

Shares of Bharti Airtel closed 4.3% higher at INR 1,627.15 on the National Stock Exchange, and contributed to nearly 0.2% rise in the Nifty 50. The stock has the sixth-highest weightage of nearly 4% on the index. ICICI Securities upgraded the stock rating to 'buy' from 'hold' earlier and maintained the target price of INR 1,875. This means a 15% upside for the stock from the current level. The company's fundamentals have shown good recovery, and may either sustain or improve further, the brokerage said, adding that it is also generating strong free cash flows. The company's market capitalisation rose by INR 406.19 billion Friday. 

Gains in Reliance Industries, which has the third-highest weightage on the Nifty 50, contributed to 0.1% rise in the index. The stock closed 1.7% higher at INR 1,292.20. The stock rose after the company said its step-down wholly-owned subsidiary in the US, Reliance Finance and Investments, purchased a 21% stake in another US-based company Wavetech Helium for $12 million. Following the news, reports said that Morgan Stanley retained its 'overweight' rating on the stock at a target price of INR 1,662. 

On the sectoral front, pharmaceutical and healthcare stocks gained the most Friday. Shares of Cipla and Sun Pharmaceutical Industries were the top pharma gainers in the Nifty 50 and closed nearly 3% higher each. Cipla rose after Prabhudas Lilladher upgraded the stock rating to 'buy' from 'accumulate' earlier and raised the target price to INR 1,730 from INR 1,615. Though sales in the US may fall in Oct-Dec due to supply issues surrounding the drug Lanreotide, sales in the domestic market will recover, the brokerage said. Cipla's revenue from the US is around 30% of total sales.

Nifty Pharma and Nifty Healthcare indices closed over 2% higher each. "A significant capex cycle is underway for hospitals in India to cater to strong demand for quality healthcare ... We see hospitals continuing to pursue M&A (mergers and acquisitions) in 2025," HSBC Securities and Capital Markets (India) said in its research report. The broking firm also maintained its positive outlook on the growth of hospitals as structural drivers are intact, such as ageing population, increase in lifestyle-related disorders, and rising health insurance coverage, it said.

On the stock-specific front, Zee Entertainment Enterprises closed nearly 4% higher at INR 129.16 after the company's shareholders voted against the resolution to reappoint Punit Goenka as director. Last week, Goenka had resigned as the managing director of the company and was appointed as the chief executive officer. 

With respect to new listings, Enviro Infra Engineers closed nearly 40% higher at INR 207.07 after listing at INR 220 on the bourses Friday. Over 55 million shares of the company changed hands on the NSE Friday. "Enviro Infra listing was above our expectations, this shows the demand for the theme based sector water and wastewater management companies have a bright future," said Prashanth Tapse, senior vice president of research at Mehta Equities, in a note. 

* Of the Nifty 50 stocks, 44 rose and 6 fell

* Of the Sensex stocks, 27 rose and 3 fell

* On the NSE, 1,758 stocks rose, 1,047 fell, and 86 were unchanged

* On the BSE, 2,347 stocks rose, 1,606 fell, and 97 were unchanged

* Nifty Pharma: up 2.4%; Nifty Healthcare: up 2%; Nifty Realty: down 0.5%

BSE                                               NSE

Sensex: 79802.79, up 759.05 points or 1%          Nifty 50: 24131.10, up 216.95 points or 0.9%

End

Edited by Akul Nishant Akhoury

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