On Tuesday, a muted opening is anticipated for the Sensex and Nifty 50 Indian stock market indices amidst mixed global market cues.
The Indian benchmark index is off to a somewhat encouraging start, according to Gift Nifty’s trends. The Gift Nifty was trading at about 21,861, compared to the previous close of 21,830 for the Nifty futures.
The domestic benchmark indices set a new high on Monday, but higher levels of profit booking caused them to end flat with a bias towards the positive.
The Nifty 50 closed 10.50 points, or 0.05%, higher at 21,741.90, while the Sensex gained 31.68 points to close at 72,271.9.
On the daily chart, the Nifty 50 created a small body of positive candles with upper and lower shadows. Technically speaking, this pattern shows the emergence of a candle pattern resembling a high wave, which suggests significant market volatility at the peaks.
At the onset of Tuesday’s trading session, the Nifty 50 and Sensex, key players in the Indian equity landscape, commenced with marginal dips, predominantly influenced by downward traction observed in the financial and IT sectors. Despite this, the resilience displayed by the oil & gas segments acted as a stabilizing force against the prevailing negative sentiment. The closing hours of the preceding session witnessed a downturn on Dalal Street, eroding earlier gains that had propelled the indices to new zeniths during the day.
While JSW Steel has been upgraded to “hold” from “underperform,” Jefferies has maintained a “buy” call on Tata Steel, Coal India, and Hindalco Industries as market participants wait for the start of India Inc.’s corporate earnings season, which is expected to occur next week. After a challenging 2023, the brokerage is cautiously optimistic about the metal basket.
With a gain of 17.9%, the Nifty Metal index—which has 15 constituents, including Tata Steel, Vedanta, Hindustan Zinc, SAIL, and NALCO—finished 2023 on Dalal Street with a record-breaking gain of 20%, matching the headline Nifty50 index’s best yearly return in the previous two years.
The brokerage projects that Coal India will see a robust volume compound annual growth rate (CAGR) of 6–15% over FY24–FY26, driven by increasing power demand and the capacity expansion of Tata Steel and JSW Steel.
“Coal India’s FY25–26 EPS is estimated to be 19–21% above street level. Its 7% dividend yield and 7.3x FY25E PE make it appealing,” Jefferies analysts stated in the report.
The last few days have seen Nifty 50 struggle to get a significant follow-through rise. As of right now, the index is down 0.45%, trading at 21,645.
Blue-chip stocks in India ended the day on Monday with minor gains as investors booked profits in the latter part of the session following the benchmarks’ historic rally that continued into the first day of 2024.
The S&P BSE Sensex (.BSESN) gained 0.04% to close at 72,271.94, while the blue-chip NSE Nifty 50 (.NSEI) finished 0.05% higher at 21,741.90 points.
Before giving up gains in the final minutes of the afternoon session, both indexes had increased by roughly 0.5% apiece to reach all-time highs.
According to Vinod Nair, Head of Research at Geojit Financial Services, “Profit booking was evident at higher levels as lingering concerns over Red Sea disruptions pose short-term risks to global supply chains and freight costs.”
With the help of stronger-than-expected economic growth, the return of foreign investors, and mounting expectations of a U.S. interest rate cut as early as March, the Nifty and Sensex reached new highs for the majority of the December sessions.
