Market Closing: Sensex ends up 490 pts, Nifty above 21650; broader markets join rally

India's benchmark indexes ended higher on Thursday after easing from near record highs in the past two sessions, even as investors continue to fret over the timing of US rate cuts after the Federal Reserve minutes.

Gains on domestic bourses were aided by a rebound in financials, while realty extended advances on robust sales volumes.

European stocks also staged a partial rebound after wiping out $163 billion in the first two sessions of the year, with oil shares leading gains as crude prices pushed higher amid increased Middle East tensions.

The Stoxx 600 Index was 0.4% higher.

Back home, the Sensex jumped 490.97 points to settle at 71,847.57, while the broader Nifty climbed 141.25 points to end the day at 21,658.60.

On the Nifty, Bajaj Finance, NTPC, ONGC, Tata Consumer and IndusInd Bank were among the top gainers, while BPCL, LTIMindtree, Dr Reddy's Laboratories, HCL Technologies and Hero MotoCorp were the worst hit.

Nifty Realty surged over 6% and was the best performer among sectoral indices. Banks and financials added over a 1% each.

Meanwhile, data from National Securities Depository showed that foreign portfolio investors (FPI) made record purchases of Indian equities totalling ₹661.35 billion rupees in December.

This record buying had propelled benchmarks, Nifty50 and Sensex, to fresh all-time highs last month.

European shares bounced back on Thursday, powered by healthcare and energy stocks, with investors looking forward to a slew of economic data for any signs that major central banks could loosen monetary policy sooner than expected this year.

The pan-European STOXX 600 was up 0.5%, having dropped to a three-week low in the previous session.

Energy was the top sector gainer, up 1.3%, followed by a 0.8% rise in healthcare.

Sentiment was also boosted by data showing China's services activity expanded at the fastest pace in five months.

Two-wheeler companies are a step ahead of other automobile segments. The year-on-year wholesale volume growth clocked by two-wheeler companies through each month of the December quarter is higher than the growth seen by passenger vehicles, commercial vehicles and tractors. For instance, in December, volume growth of two-wheeler companies stood at 15% vis-à-vis 6% growth in passenger vehicles. Medium & heavy commercial vehicles trucks and tractors saw their respective volumes fall by 2% and 17%.

Sure, a favourable base aided growth rates for two-wheelers. Even so, the demand environment is gradually recovering and that means improving prospects for the two-wheeler segment. On the other hand, the passenger vehicle segment is likely to see a slowdown. With pent-up demand being met and pending order backlogs fulfilled, volume growth is likely to moderate. For tractors, rural demand needs to pick up pace while for commercial vehicles the upcoming election is a key monitorable.

Advances rose 41% YoY to ₹7,600 crore.

The Indian government will likely exceed its fiscal year target for dividends from state-run companies by at least ₹120 billion, partly offsetting an expected shortfall from share sales, Reuters reported on Thursday citing a government source.

The dividend receipts could range from ₹550 billion to as much as ₹600 billion, the source said, potentially topping not only the government's target of ₹430 billion for the April-March fiscal year but also the ₹595 billion it collected in dividends last fiscal year.

So far this fiscal, India has received ₹438 billion in dividends from state-owned firms, according government data.

The high dividend will partly offset the shortfall in government's revenue from sale of equity in state-run enterprises.

India's REC has hired bankers to raise up to $500 million through its debut issuance of yen-denominated green bonds by 15 January, the company's director of finance told Reuters on Thursday.

The state-owned infrastructure financier will issue five-year and 10-year bonds to raise $300 million-$500 million to fund green infrastructure projects, said Ajoy Choudhury.

The company has hired DBS Bank, Mizuho, MUFG and SMBC Nikko as joint lead managers for the proposed issue.

BUY Laxmi Organics - CMP: 295; Target: 330; Stop Loss: 278 - MEDIUM TERM TECH PICK 

The stock with a gradual rise has recently moved past the important averages of 50EMA and 100 period MA at 279 levels to improve the bias and is anticipated for further rise in the coming days. The RSI is well placed and has much upside potential to carry on the positive move. With the chart looking good, we suggest to buy and accumulate this stock for an upside target of 330 keeping the stop loss near 278 level.

Gold prices steadied as investors looked out for more US jobs data to gauge the Federal Reserve's next steps on its monetary policy, although higher US bond yields kept a lid on bullion's upside.

Spot gold was up 0.1% at $2,043.72 per ounce, after hitting its lowest since 21 December on Wednesday. US gold futures rose 0.4% to $2,051.10 per ounce.

Reliance Jio added 31.59 lakh mobile users while rival Bharti Airtel's subscriber gain came in at 3.52 lakh in October 2023, as per data by TRAI.

There was no relief for the troubled telco Vodafone Idea on subscriber front, as it lost 20.44 lakh wireless subscribers in October.

With the addition of 31.59 lakh users, Jio's total wireless subscriber count climbed to 45.23 crore in October from 44.92 crore in September.

IndiGo on Thursday said it has scrapped fuel surcharges on domestic and international flights with immediate effect.

The budget carrier introduced fuel charges in October last year, following a surge in aviation turbine fuel (ATF) prices.

However, with the government slashing ATF prices for third time in a row, IndiGo said it has removed the ‘fuel charge’, effective 4 January 2024.

Packaged consumer goods such as soaps, detergents and snacks saw tepid demand in rural India in the December quarter, triggering concerns over FMCG sales volumes, according to industry analysts.

Volume growth in rural markets is likely to be either flat or may see a minor dip year-on-year, lagging volumes in urban markets, they said.

“Although moderating inflation in diesel and fertiliser costs augurs well for the rural segment, we forecast volume growth for most players shall remain challenging in Q3FY24 and possibly even Q4FY24," said Abneesh Roy of Nuvama Institutional Equities said in a report.

Weaker-than-expected winter and festive demand, rainfall deficit and unseasonal rains hampered growth in rural India in Q3FY24 and possibly FY24. "This led to muted volume growth for most players in Q3FY24. The last five to six quarters have been the longest periods of rural slowdown in the last decade," Roy added.

In the September quarter, rural markets reported a 6.4% rise in quarterly volumes after reporting a decline a year ago. FMCG volumes in urban markets rose 10.2% year-on-year, according to data released by NIQ (NielsenIQ) in November.

The last five to six quarters have been the longest period of rural slowdown in the last decade. As a result, companies are pinning hopes on an uptick in rural demand.

A Bengaluru city civil court on Wednesday asked Wipro Ltd and its former chief financial officer Jatin Dalal to resolve the issue of alleged violation of non-compete clause in the latter’s employment contract before arbitration.

Wipro announced Dalal’s resignation on 21 September, with 30 November being his last working day with the Bengaluru-based software company. A week later, Cognizant announced that Dalal would start as the company’s CFO.

But even before Dalal could complete his term with Wipro, the country’s fourth-largest IT services company filed a complaint in the city court in Bengaluru, alleging that Dalal had not adhere to the employment contract that restricted him from working with Wipro’s rivals for a period of up to one year.

Oil prices rose on Thursday, extending gains from the previous day, on concerns about Middle Eastern supply disruptions at a field in Libya and heightened tension around the Israel-Gaza war.

Brent crude rose 33 cents to $78.58 a barrel, while US West Texas Intermediate crude futures climbed 40 cents to $73.10.

Deposits climbed 13% on year to ₹3.68 trillion.

The Centre has called off the strategic disinvestment of Salem Steel Plant, a unit of SAIL in Tamil Nadu, due to lack of interest from shortlisted bidders.

"Multiple EoIs had been received and bidders were shortlisted. However, due to lack of interest of shortlisted bidders to proceed further with the transaction, Government of India, with the approval of Alternative Mechanism (Empowered Group of Ministers) has decided to annul the current EoI thereby terminating the present transaction," the department of investment and public asset management said in a statement Wednesday.

The Sensex was up 277.82 points at 71,634.42 in opening deals, and the Nifty rose 73.50 points to 21,590.80. 

Bajaj Finance, Bajaj Finserv, Adani Ports, Tata Motors and Infosys were among the top gainers on the Nifty, while BPCL, Bajaj Auto, Dr Reddy's Labs, L&T and HCL Technologies were the worst hit.

India's benchmark indices were higher in pre-open trade. The Sensex was up 189.90 points at 71,546.50, and the Nifty rose 78.60 points to 21,595.90.

We believe Nifty is not just over-valued, but it is in bubble territory. The small caps and mid-caps are even more exorbitantly priced than Nifty and represent even a bigger bubble. We see a 10-15% correction in Nifty in the current quarter and 15-20% correction in small and mid-caps. For CY 2024 the downside in Nifty could be as much as 25% and in small and mid-caps it could be 30-35%. We see robust IPO activity to continue in the current quarter but will probably start fading from next quarter onwards. By the end of CY 24 the IPO market could largely be dead. We expect the activity in the Private equity side to take even a bigger hit by the end of CY 24. We remain bullish on long term GOI bonds as RBI and other central banks will cut rates aggressively in the H2 of CY 24 as the economies slow down dramatically.

NIFTY-50 has closed at 5 days low and the 20 day average placed at 21,320 will act as strong support from current levels.

On the higher side the month opening of 21700 will act as strong resistance and crossover of the same would push the index higher to 22,000 levels.

RSI is being oversold on hourly charts and other key other key technical indicators could show mixed action with respect to the weekly expiry.

Highest call OI has moved lower to 21,600 strike while on the downside the highest put OI has moved lower to 21,500 for the weekly expiry.

The government may set a divestment target for the coming fiscal year that is at least 20% lower than what was estimated for the current year, two people aware of the development said.

The Union budget for FY24 had estimated raising ₹51,000 crore from the sale of the government’s shares in public sector companies. It is unlikely that any new big-ticket additions will be made to the divestment list for FY25, the people mentioned above said on condition of anonymity.

India’s largest lender State Bank of India (SBI) is looking to tap the US bond markets to raise $500-750 million, said a person aware of the development.

SBI is planning to raise funds through Regulation S bonds, said the person cited above, adding that the roadshows could begin as early as next week. Bank officials have held discussions with about six bond arrangers, the person cited above said.

Raised by foreign issuers in the US, Regulation S bonds cannot be subscribed to by US citizens. While the tenor of the bond could not be immediately ascertained, SBI had raised five-year $750 million in Regulation S bonds in April 2023. Those bonds were benchmarked against the five-year US treasury rates and priced at a spread of 145 basis points over the benchmark.

SBI, Adani Ports, Jio Financial Services, Bajaj Auto, Vedanta, among others, will be in focus today.

National Aluminium Company, Balrampur Chini Mills, Delta Corp, Hindustan Copper, Indian Energy Exchange, SAIL and Zee Entertainment Enterprises are in the F&O ban list for 4 January.

On Wednesday, the BSE Sensex dropped 536 points to end at 71,357, while the Nifty50 declined 149 points to close at 21,517.

GIFT Nifty futures traded 33 points higher at 21,613 in early deals, indicating a marginally positive start for the Indian benchmark.

Stocks in Asia fell following a fall in US stocks after Federal Reserve meeting minutes indicated interest rates will remain elevated for longer.

A gauge for regional shares fell for a third straight session as Japanese benchmarks declined in their first trading day of the new year after a holiday break. The benchmark Nikkei 225 tumbled 2.26% at open, while the Topix also slid 1.25% as Japan kicks off its first day of trade in 2024.

Equities in Australia and South Korea also slipped while contracts for Hong Kong stocks edged higher.

US share futures were little changed during Asian trading after the S&P 500 ended Wednesday 0.8% lower, extending a run of daily declines that began on the last trading day of 2023.

Overnight, US stocks fell again as Wall Street’s slow start to the year stretched into a second day.

The S&P 500 lost 38.02 points to 4,704.81, though it remains within 2% of its record set exactly two years ago. The Dow Jones Industrial Average dropped 284.85 points, from its own record to 37,430.19. The Nasdaq composite led the market lower with a drop of 173.73, or 1.2%, to 14,592.21.