Informist, Monday, Feb 5, 2024
By Padmini Dhruvaraj
MUMBAI – The benchmark share indices are expected to stay in the red on Tuesday after the sharp fall during the last hour of today’s session, analysts said. The Nifty 50 index is expected to find support at 21600 and face resistance at 22000 points.
“The Nifty 50 has formed a doji kind of candle on the monthly charts, which indicates an immediate reversal,” Nirav Harish Chheda, assistant vice president of derivatives and technical research at Nirmal Bang, said. “The index might face some selling pressure this month and might touch the 21000 level, so investors should look to book profit now,” he added.
Today, the Nifty 50 index opened flat tracking mixed sentiment in the global equity markets, and rose higher due to bullish sentiment for some automobile and public sector stocks. However, the index fell later due to profit-taking in select index heavyweight stocks such as Reliance Industries, Bharti Airtel, and Bajaj Finance.
Eventually, the 50-stock index closed lower by 82.10 points, or 0.4%, at 21771.70 points and the 30-stock Sensex ended lower by 354.21 points, or 0.5%, at 71731.42. As many as 33 stocks of the Nifty 50 ended lower today. Meanwhile, the India VIX, often known as the fear gauge index, rose 6.3% to 15.62 points.
“Sluggish mood in global markets contributed to the overall weakness in local shares, as investors booked profit in select stocks amid dimming hopes of a rate cut in the near term,” Prashanth Tapse, senior vice president of research at Mehta Equities, said.
The Nifty 50 has to close above 22000 on a weekly basis for any further upside in the index, said Jigar Patel, senior equity manager at brokerage firm Anand Rathi. He said the index could fall up to 21600 points in the coming few sessions.
“Indications are in favour of consolidation to continue and expect Nifty to respect the 21450-21600 zone, in case the profit taking extends,” said Ajit Mishra, senior vice-president of technical research with Religare Broking. He added that traders should maintain caution while chasing the momentum and keep an exit plan in place.
Analysts expect pharmaceutical and fast-moving consumer durable stocks to perform well going forward, while private sector banks and information technology stocks are seen subdued.
Investors will assess the Oct-Dec earnings of Bharti Airtel which were released after market hours today. The company reported a lower-than-expected consolidated net profit for the quarter ended December due to a one-time cost on account of devaluation of the Nigerian currency, but the growth in its average revenue per user topped the expectations of analysts.
The telecom operator’s consolidated net profit for Oct-Dec came in at 24.42 bln rupees, up 82.2% on quarter and 53.8% on year. The bottomline was lower than analysts’ estimate of 29.15 bln rupees. The company said there was a one-time cost of 1.30 bln rupees in Oct-Dec due to the devaluation of the currency of group subsidiaries in Africa. The revenue grew 2.3% on quarter and 5.9% on year to 379 bln rupees. This was largely in line with analysts’ estimates.
Shares of Britannia Industries will be in focus as the quarterly earnings of the company are due Tuesday. Shares of Aarti Drugs, GAIL (India), NTPC, Motilal Oswal Financial Services, and Shriram Finance may fall as the stocks will trade ex-dividend. End
Edited by Ashish Shirke
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