In the past three days, Nifty declined to 600 points. However, experts believe that the trade setup for Nifty is nearing a very good support level. Can we see something positive today?
After a significant drop of 600 points in just three sessions, the Nifty has reached levels that were last observed on March 27. Furthermore, this marks the initial occurrence in a span of three months where the index experienced a consecutive decline over the course of three days. The prominent figures have declined to offer their backing to the index, despite it dropping below crucial support levels.
Is the IT Sector the reason for the decline?
Once seen as a valuable resource, IT has now become a significant source of frustration for the market. Without any backing from TCS after their earnings, the Nifty is facing additional strain due to the departure of key personnel from LTIMindtree and Wipro. The spotlight is firmly on Infosys as it prepares to release its results on Thursday evening. Investors and analysts alike are eagerly awaiting the management’s insights and projections for the financial year 2025.
Nevertheless, as the index steadily declines, there is a glimmer of hope emanating from the broader markets. The Midcap index closed unchanged on Tuesday, while the Smallcap index recorded gains of more than 0.5%. Industries such as Defence, Pharma, and FMCG demonstrated resilience in the face of a sluggish market on Tuesday. That might also provide the bulls with some encouragement.
Trade Setup as per NSE circular
It is important to consider the recent NSE circular issued on Tuesday. This circular introduced an extra exposure margin of 15% in the equity derivatives segment for securities where the top 10 clients hold more than 20% of the Market-wide Position Limit. This framework will come into effect on April 26, once the April contracts have expired.
The global markets experienced a rather calm and uneventful evening on Tuesday, while the Asian markets on Wednesday morning displayed a combination of positive and negative movements. Despite a decline in Japanese equities, the Chinese markets performed admirably. Thursday marks the weekly options expiry of the Nifty contracts.
Foreign investors persisted in selling heavily in the cash market on Tuesday, while domestic investors once again attempted to counterbalance the losses by being net buyers.
Ruchit Jain from 5paisa.com suggests that adopting a stock-specific approach can be a more effective trading strategy in the short term. The Nifty’s weekly options data indicates a range of 22,000 – 21,950, which aligns with a support trendline that is on the rise. If the support is breached, there is a possibility that the index could decline to levels around 21,750. He anticipates a potential decline toward 22,400 due to oversold readings and positive market breadth.
The Nifty is currently positioned close to the critical support of an ascending trend line, as indicated by the weekly chart, and the lower boundary of an ascending channel on the daily chart, which is approximately at 22,000. Despite the current downward trend, there is anticipation of a potential rebound above the 22,000 level. The level of resistance to watch for is currently at 22,260.
Top gainers as of 17th April (Source)
In a recent note, Asit C Mehta Investment Intermediates highlighted Nifty’s channel pattern and its lower-end support at approximately 22,000 levels. This support is considered significant and, if maintained, could potentially trigger a rebound rally towards 22,500. The Nifty is currently finding short-term support in the range of 22,000 – 21,900, with potential resistance levels at 22,300 and 22,500.
In addition to IT, banking stocks have failed to provide any assistance to the Nifty. In the past three trading sessions, the Nifty Bank has experienced a significant drop of more than 1,500 points. On Tuesday, the index closed below the 47,500 mark, marking a significant milestone for the entire April series. HDFC Bank performed exceptionally well amidst a challenging market environment, although it was unable to withstand the selling pressure experienced by stocks such as ICICI Bank and IndusInd Bank.
Stocks in News
Vodafone Idea
₹18,000 crore Subscription for FPO is now available. GQG, Fidelity Funds, UBS are among the investors who participated in the anchor book. The company successfully secured an impressive ₹6,000 crore from anchor investors.
Infosys
Infosys has recently announced a partnership with Proximus, a leading company in Belgium, to enhance their customer service management operations. This collaboration is expected to bring about significant improvements in the way customer queries and concerns are handled, ensuring a seamless and efficient experience for all. With their combined expertise and resources, Infosys and Proximus aim to deliver top-notch customer service that goes above and beyond expectations. Earnings for the March quarter will be announced after the market closes on Thursday.
Zee Entertainment
Zee Entertainment has decided to withdraw its merger implementation application from the NCLT against Sony. To vigorously pursue all its claims against Sony in the ongoing arbitration proceedings at the Singapore International Arbitration Center. In addition, the stock will no longer be included in the F&O segment starting from June 28, 2024.
Biocon
Biocon has recently entered into a licensing and supply agreement with Biomm, a Brazil-based company. This agreement will allow Biocon to commercialize Semaglutide, also known as gOzempic, a medication that is highly effective in improving glycemic control in adults with type-2 diabetes.
Piramal Pharma
Piramal Pharma has received the Establishment Inspection Report (EIR) from the USFDA for its Riverview manufacturing facility. This report signifies the successful completion of a thorough inspection and compliance with the stringent regulations set by the USFDA. It is a testament to Piramal Pharma’s commitment to maintaining high standards in pharmaceutical manufacturing. The inspection occurred on February 7, 2024, and has now been completed.
Angel One
Angel One reported a significant increase in revenue for the March quarter, with a growth of 64.3% amounting to ₹1,357.2 crore. Additionally, their net profit also saw a notable rise of 27.3% from the previous year, reaching ₹340 crore. The EBITDA margin has experienced a decrease, narrowing down to 39% from its previous level of 46.7%. However, there has been a notable increase in EBITDA, which has risen by 37.2% to ₹529.7 crore from ₹386 crore.
Shilpa Medicare
Unit 4 in Jadcherla, Telangana underwent an inspection by Austrian regulators and has been granted a GMP certification. The last inspection of this unit occurred in January 2020. The unit is involved in the production, testing, and distribution of sterile injections as well as non-sterile tablets and capsule-finished dosage forms in various markets around the world, including the US and Europe.
Adani Group
Adani Group has successfully completed its warrant subscription for Ambuja Cements, increasing its stake from 63.2% to 70.3%. In addition, they have invested an impressive ₹8,339 crore, bringing the total fund infusion to a substantial ₹20,000 crore. Ambuja plans to increase its capacity to 140 MTPA by 2028, effectively doubling its current capacity.
Paytm
Paytm has stated that they have not received any communication regarding a deferral or penalties for their license application for Paytm Payment Services.
Brigade Enterprise
Brigade Enterprises achieved an impressive milestone by recording pre-sales of ₹6,013 crore in the financial year 2024, setting a new record for both a single quarter and an entire financial year. In the quarter, pre-sales reached ₹2,243 crore. Realizations experienced a significant 23% increase during the financial year 2023. The average room rate (ARR) for our hospitality portfolio reached ₹6,480, reflecting an impressive 8% increase over the past year. The company is confident about the robust residential demand expected in the financial year 2025.
Sunteck Realty
Sunteck Realty reported a significant increase in pre-sales during the March quarter, with a growth of 26% year-on-year, amounting to ₹678 crore. Pre-sales for the entire fiscal year have increased by 20% compared to the previous year, reaching ₹1,915 crore. Revenue for the quarter decreased by 10.3% to ₹296 crore, and for the full year, it decreased by 1% to ₹1,236 crore.
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