As is the norm going into a major event, the market exhibited a “wait and watch” behaviour. The Nifty ended unchanged from Tuesday’s levels albeit 120 points from the session’s highs. The index did briefly reclaim the 22,000 mark, but could not sustain above those levels.
The market now awaits the outcome of the RBI’s Monetary Policy Committee’s three-day meet on Thursday. While the RBI Governor has ruled out any premature rate cut, the focus will be on the central bank’s commentary on a host of issues, including the current macro economic factors and even the Paytm issue, a subject most likely to be raised during the media interaction.
Along with the central bank policy, Thursday will also be the weekly expiry of the Nifty 50’s options contracts. There will also be reaction to earnings from stocks like Tata Consumer, Power Grid and broader market names like Lupin, Apollo Tyres and others.
As we have noticed, good earnings have been disproportionately rewarded by the market, as evident from the reaction in Trent (Up 19% on Tuesday), Zaggle (Up 20%) and vice versa in cases like NLC India and Redington (Down 6% each).
Foreign investors were heavy sellers in the cash market on Wednesday, while domestic investors were buyers in a small quantity.
Nagaraj Shetti of HDFC Securities said that the Nifty has been hitting the previous key opening downside gap of 21,970 but a decisive upside breakout is missing from those levels. However, he sees a high possibility of an upside breakout from the 21,950 – 22,000 for the index. Immediate downside support is at 21,750.
The Nifty’s daily chart is still holding on to the higher bottom formation, which supports further upside from current levels, observed Shrikant Chouhan of Kotak Securities. He expects the index to move back to 22,150 as long as it remains above the 21,850 mark. Below those levels, the index may see a quick intraday correction towards 21,800 – 21,750 levels.
Osho Krishnan of Angel One maintains that 22,000 – 22,100 remains a tough challenge for the bulls to conquer and it is important for that to happen for triggering the next leg of upside. On the flip side, a dip below 21,750 can aggravate the profit booking towards the 20-DMA zone of 21,670.
The Nifty Bank was an outperformer in mid-week trading, also the day of its weekly expiry, but the upmove was not convincing. Most of the outperformance came from low float PSU banks, which rose between 15% to 20%. State Bank of India though, was the top index gainer, ending 4% higher.
Despite the outperformance, the index struggled to cross the 46,000 mark, reversing from the intraday high of 46,062. Thursday’s policy will be a key factor in determining which way the index heads.
Kunal Shah of LKP Securities said that the index continues to find support at the 45,500 – 45,600 zone and a convincing break below that can trigger a sharp correction on the index. But a break above the resistance band of 46,200 will lead to substantial short-covering towards the 46,500 mark.
Strong call writing was observed at the 46,000 strike in the Nifty Bank, making it a key resistance on the upside, said Ashwin Ramani of SAMCO Securities. The Nifty Bank, according to him, is unlikely to move higher unless call writers exit from the 46,000 strike.
What are The F&O Cues Indicating?
Nifty 50’s February futures added 0.5% and 65,500 shares in Open Interest on Wednesday. They are trading at a premium of 73.2 points from 31.75 points earlier. On the other hand, Nifty Bank’s February futures added 6.1% and 1.82 lakh shares in Open Interest. Nifty 50’s Put-Call Ratio is at 1 from 1.11 earlier.
Balrampur Chini, Delta Corp, SAIL have entered the F&O ban.
Ashok Leyland, Zee Entertainment, India Cements, Indus Towers, Hindustan Copper, UPL, NALCO continue to remain in the ban.
Nifty 50 on the Call side for February 8 expiry:
For Today’s weekly options expiry, the Nifty 50 Call strikes between 22,000 and 22,100 have seen Open Interest addition, while the 21,800 strike saw some shedding in Open Interest.
| Strike |
OI Change |
Premium |
| 22,100 |
39.4 Lakh Added |
24.65 |
| 22,000 |
38.7 Lakh Added |
54.45 |
| 22,050 |
25 Lakh Added |
37.45 |
| 21,800 |
7.6 Lakh Shed |
170.95 |
Nifty 50 on the Put side for February 8 expiry:
On the Put side, the Nifty 50 strikes between 21,800 and 21,900 have seen Open Interest addition for today’s weekly expiry.
| Strike |
OI Change |
Premium |
| 21,900 |
22.7 Lakh Added |
55.05 |
| 21,850 |
12.8 Lakh Added |
37.7 |
| 21,800 |
10.7 Lakh Added |
25.35 |
These stocks added fresh long positions on Wednesday, meaning an increase in both price and Open Interest:
| Stock |
Price Change |
OI Change |
| Delta Corp |
10.55% |
26.24% |
| Balrampur Chini |
1.11% |
16.33% |
| Trent |
19.63% |
13.62% |
| Metropolis |
1.04% |
11.93% |
| Max Financial Services |
5.36% |
9.46% |
These stocks added fresh short positions on Wednesday, meaning a decrease in price but increase in Open Interest:
| Stock |
Price Change |
OI Change |
| Berger Paints |
-0.66% |
29.42% |
| Navin Fluorine |
-4.91% |
14.37% |
| Bank of Baroda |
-1.33% |
13.02% |
| Bata India |
-1.69% |
9.89% |
| Power Grid |
-2.17% |
9.78% |
Short covering was seen in these stocks on Wednesday, meaning an increase in price but decline in Open Interest:
| Stock |
Price Change |
OI Change |
| Chambal Fertilisers |
5.82% |
-15.01% |
| HDFC Life |
2.03% |
-9.17% |
| Pidilite |
3.14% |
-7.12% |
| Dr Reddy’s |
0.15% |
-6.47% |
| ICICI Lombard |
2.21% |
-5.77% |
These stocks saw unwinding of long positions on Wednesday, meaning a decline in both price and Open Interest:
| Stock |
Price Change |
OI Change |
| Ashok Leyland |
-1.83% |
-7.85% |
| TCS |
-1.11% |
-5.99% |
| NALCO |
-0.80% |
-5.62% |
| Infosys |
-1.56% |
-4.68% |
| JK Cement |
-0.20% |
-3.40% |
These are the stocks to watch out for ahead of Thursday’s trading session:
Tata Consumer Products: Net profit lower due to exceptional loss of ₹91.5 crore. EBITDA margin of 15% compared to poll of 14.4%. India revenue up 9.7%, in-line with 8-10% growth expectations. Packaged beverage revenue up 4% compared to 6-8% growth expectation. NourishCo revenue up 34%, higher than 25% expectation. International revenue up 10.6%, also higher than the 8% growth estimate. India foods business sees 5% volume growth. Soulfull, Sampann and NourishCo now contributing to 17% of sales from 13% last year.
Lupin: Exceeded expectations on what was expected to be a subdued quarter in the US. Spiriva generic contribution along with drugs like Suprep generic aided US numbers. US sales of $212 million were higher than estimates of $200 million to $205 million. Revenue for the quarter was at a record high, while margins at 20% were the highest in 10 quarters. Revenue also crossed the ₹5,000 crore mark for two quarters in a row. On track to hit exit margin guidance of 18% for financial year 2024.
Manappuram Finance: Net Interest Income higher than Motilal Oswal estimates, while net profit in-line. Calculated net interest margin at a 10-quarter high. Gold loan share at 51.4% from 58.4% last year and 53.4% sequentially. Gold Tonnage is at a seven-year low. Gold AUM also declined 3.7% sequentially but increased by 26.7% year-on-year. Provisions nearly triple year-on-year to ₹149.6 crore, also up 25% quarter-on-quarter. Asset quality deteriorated with Gross NPA at 2% from 1.6%, while Net NPA at 1.8% from 1.4% in September.
Apollo Tyres: Net profit up 78.1% to ₹496.6 crore, but revenue remains flat, up only 2.7% to ₹6,595.4 crore. EBITDA up 32.2% year-on-year to ₹1,208.1 crore, while margin expands by 400 basis points to 18.3% from 14.2% last year.
JK Paper: Net profit declines by 29.1% year-on-year to ₹236.4 crore from ₹333.5 crore. Revenue up 2.7% to ₹1,781.78 crore. EBITDA down 31.9% to ₹447.6 crore, while margin narrows to 25.1% from 37.9%. Sales impacted due to overall drop in realisations and substantial increase in wood costs. Selling prices also under pressure due to rising import trends and weak demand scenario.
Kalpataru Projects: Revenue up 22.3% from last year to ₹4,896 crore, the highest ever, net profit up 19.5% to ₹141 crore. EBITDA up 13.4% to ₹424 crore, but margin narrows to 8.7% from 9.3%. Revenue growth led by robust order book in T&D, B&F, water and urban infra business. Year-to-Date order inflows in financial year 2024 at ₹18,065 crore and additional L-1 of nearly ₹6,000 crore. Favourably placed in a large size EPC project for airport development and underground metro rail tunneling in India.
Aarti Pharmalabs: Revenue down 5% year-on-year but improves slightly sequentially. EBITDA margin improves both year-on-year and sequentially to 21.3%. Net profit also rises from last year and last quarter.
Piramal Pharma: Riverview facility gets form 483 with three observations from the USFDA. A pre-approved inspection was conducted by the USFDA between January 29 to February 6, 2024. Observations classified as Voluntary Action Indicated and do not relate to data integrity. The company will submit a detailed response to the USFDA within the stipulated timelines.
SJVN: Gets Letter of Intent from Gujarat Urja Vikas Nigam Ltd. for 200 MW Solar Power Project in GUVNL Phase XXII. Earlier, its wholly-owned subsidiary had bagged the initial 100 MW solar project through bidding and another 100 MW under a greenshoe option at a tariff of ₹2.63 per unit on a Build, Own and Operate basis. Tentative cost of construction and development of this project is said to be ₹1,100 crore and shall be commissioned within 18 months of signing the PPA. The PPA signed will be for a period of 25 years.
KEC International: Wins orders worth ₹1,175 crore across various businesses. T&D business has won orders in India and Americas, while Civil business has won an order in the residential building segment. Solar business has also won an order in India. Year-to-Date order intake in financial year 2024 stands at over ₹14,000 crore.
PSP Projects: Receives new work orders worth ₹935.41 crore. The projects include river edge development of Dharoi Dam region as a world class sustainable tourist and pilgrimage destination worth ₹357.07 crore, civil, MEP and finishing work for development of street at Gandhinagar worth ₹155.62 crore and development of Sabarmati Riverfront worth ₹399.38 crore. Total order inflow in financial year 2024 so far at ₹1,995.7 crore.
Sterling & Wilson Renewables: Customer issues notice terminating the EPC and O&M contract to its step-down subsidiary in Australia. The project had received mechanical completion in July 2022. The notice has been strongly refuted by the subsidiary. The customer has also invoked the outstanding bank guarantee amounting to nearly ₹90 crore. Subsidiary will initiate appropriate legal action and lodge claims for damages.
NHPC: Government to sell shares to eligible employees between February 13 to February 16, 2024 at a price of ₹71 per share. The quantum of the share sale though, has not been specified by the company.
Supriya Lifesciences: Planning a capex program at Ambernath site with an estimated aggregate capital outlay of ₹60 crore over the next three years for site development and related infrastructure on nearly 500 square meters of land. The capex will majorly funded through internal accruals.
IRB Infra: Toll collected for the month of January up 25% to ₹466.8 crore, despite transporter strike at the start of the month.
Kalyani Steels: Paid balance cash amount of ₹425.36 crore to acquire assets of Kamineni Steel & Power India Pvt. Ltd. for which it was declared the successful bidder on January 10.
Aurionpro Solutions: Board meet on February 12 to consider fund raising.
Info Edge: To invest ₹25 crore in wholly-owned subsidiary Jeevansaathi by subscribing to 25 lakh Compulsorily Convertible Debentures.
First Published: Feb 7, 2024 7:35 PM IST
