NIFTY Crosses 26K Mark, Reaches New ATH; Broader Market Sentiment Remains Indecisive

On Thursday BSE Sensex and NSE nifty rose to new all-time high. Nifty gained 211.90 points, settled at 26,216.05. The NSE Nifty reached a record high of 26,250.80 and BSE Sensex hit an all-time high (ATH) of 85,930.43 on Thursday.

China stimulus pushed Asian equities higher with Hang Seng +4.16% Nikkei +2.79%, providing push to Indian markets.

In the large cap index Maruti, Tata Motors, Grasim and Shriram Finance were the top gainers while Cipla, ONGC, NTPC, And Hero MotoCorp were the top losers.

Auto Stocks moved higher today ahead of monthly sales data, Maruti shares jumped 4.5% while M&M advanced 2.5%. The NIFTY auto index was the top gainer with the NIFTY Auto index rose 2.26%. Metals index rose over 2 percentage point with a recovery of commodity prices. PSU banks rose over a percentage point.

Despite a rally in large caps the broader market sentiment remains negative. Among NIFTY 500 companies, advance decline was 228: 269 while in large cap NIFTY advance decline was 41:9. In midcap 100 advance decline was 51:48. This suggests a divergence scenario of the market with traders and investors booking their profit on high valued midcaps. The midcap index is trading 75% higher then 5 years median PE which looks expensive at the moment.

India VIX (volatilityindex) slide 7.12% giving impetus to nifty bulls. A rise in VIX is generally leads to selling in the market.

Many market analysts were with the opinion the NIFTY may continue the momentum, however we are cautious looking at the divergence within the market.

Corporate and economic developments

·         Tata Motors gains 3% On JLR’s £500 mlninvestment for parallel EV production plan while Hero Motorshares ends in the red after UBS gives sell call on the company.

·         Vedanta To Consider 4th Interim Dividend for FY25 On Oct 8, Stock Jumps 4.77% at 502.75.

·         Zetwerk Manufacturing announced that it has received an order from NTPC for the manufacturing and supply of 1,515-megawatt peak (MWp) solar photovoltaic modules, along with spare parts for the 1,200 MW Khavda Solar projects in Gujarat.

·         As per market info, Alkem Labs in discussions to buy Novartis India from its Swiss parent. Total value of the deal expected to be around ₹2,000 crore.

·         Indian Bank to raise additional long-term infrastructure bonds up to ₹5,000 crore in one or more tranches.

·         Biocon partners with Tabuk Pharmaceuticals to commercialize its Glucagon-like peptide-1 product in the Middle East region.

·         GoM discussed proposal to move to 3-rate GST structure; no decision finalised yet. GoM discussed proposal to merge 12% & 18% slabs

·         Indian government releases its monthly economic review for August and reports showed urban consumption has signs of weakness with a decline in automobile sales during the first five months. A GDP growth of 6.7% in Q1FY25 & the movements in HFI till August suggests real GDP growth projection of 6.5-7% for FY25 mentioned by the Economic Survey 2023-24.

Market Outlook - Index

NIFTY:NIFTY is likely to witness profit taking however may see strong support at 26050-80 zone which was a resistance earlier. May prefer bear put spreads for intraday.

BANK NIFTY:The bank nifty has broken the ATH of 53357 and as long as its holds above the same, one can expect the short-term trend to be positive. The index has interim support at 54180 levels and then 54000 mark with immediate resistance 54500 levels. There is high probability of long liquidation on Friday.

NIFTY MIDCAP Select Index:The index has been a laggard and failed to catch the momentum despite NIFTY and bank NIFTY reached ATH. The index faces a stiff resistance at 13280-300 zone and if the market fails to hold above that then the index may correct back below 13200 mark again. The index suggests a short-term slide towards 13050 kind of levels as long as it stays below 13300 levels. A break and sustained trading above 13300-320 may nullify declines in the short term. 

Data Calendar

The report is being prepared by Bitupan Majumdar, an independent SEBI registered research analyst with registration code INH30006962. Please consult your financial advisor before taking investment decision.

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