Domestic equities bounced back after three days of decline and closed higher on Tuesday (October 17), led by banking and financial stocks. Upbeat global cues triggered a firm start, followed by range bound action till the end. The NSE Nifty opened gap up and maintained its strength throughout today's session to finally settle at 19,811 levels with gains of 80 points or 0.40%.

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On the sectoral front, a mixed trend continued wherein energy and financials were among the top gainers, while auto and realty closed flat. Among the broader indices, the smallcap index almost retested its record high and gained nearly a percent.

The overall investor sentiment was also lifted by better-than-expected results of HDFC Bank. Top gainers on the Nifty were BPCL, Power Grid Corporation, SBI Life Insurance, HDFC Life and Coal India, while losers included Tata Motors, L&T, UPL, IndusInd Bank and TCS.

What Are The Experts Saying?

The market's gap-up opening today, offsetting the losses of the past three days, indicates an optimism over the ongoing second quarter earnings despite concerns about the Middle East and subdued start by the IT sector, said Vinod Nair, Head of Research at Geojit Financial Services.

"The upward trend was broad-based with particular upside in banking, oil and gas and FMCG sectors. However, some profit-taking was evident as the day concluded," Nair added.

Motilal Oswal's Siddhartha Khemka said that the positive trend remains intact given the resilient domestic economy and strong earnings outlook. "A lot of stock-specific action are likely to be seen as we progress into the results season."

What Do The Nifty 50 Charts Indicate?

Has the Nifty 50's recovery on Tuesday given a ray of hope to the bulls and the chartists? Lets find out here:

Nagaraj Shetti of HDFC Securities said the short term trend of Nifty continues to be positive with range bound action. "Nifty is expected to face patchy road ahead on the upside, as it could encounter multiple resistances like 19,850 (previous swing high), 19,950 (up trend line hurdle) and 20,115 (previous opening down gap) in the near term," he said, adding that an immediate support is placed around 19,700 levels.

According to Rupak De of LKP Securities, the market started to gap up following strong global sentiment and has so far remained in strength. "The short-term trend remains strong as the index sustains above critical moving averages on the daily timeframe. A 'buy on dips' strategy is favored as long as it remains above 19,550. On the higher end, it might move towards 20,000-20,200."

"We reiterate our mildly bullish view on Nifty and suggest continuing with a 'buy on dips' approach till it manages to hold 19,600. On the other hand, we are seeing a rise in volatility across sectors with the beginning of earnings so traders should keep a check on stock selection and risk management aspects," said Ajit Mishra, SVP - Technical Research at Religare Broking.

44000 a crucial support for Nifty Bank

The market witnessed a persistent struggle between the bulls and the bears, resulting in the Nifty Bank close 0.42% higher at 44,409.50.

"This signifies ongoing uncertainty and indecision among market participants. The index is currently stuck within a broad trading range, with support around 44000 and resistance at 45000. This range-bound movement suggests a lack of a clear, sustained trend in either direction," said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.

Despite the sideways trading range, Shah said the overall sentiment within this range remains bullish. "Investors are inclined to use dips in the market as buying opportunities, reflecting confidence in the potential for upward movements."

Mehul Kothari of Anand Rathi said the Nifty Bank index is still a laggard, and the breakout would be confirmed only above 44700. "A move above the same might result in upside momentum. On the other hand, 44000 now remains a crucial support for the coming sessions."

Ceat climbs 11% in trade today

Among individual stocks, Ceat closed 5.91% higher after the company reported a consolidated net profit of Rs 208 crore in Q2FY24, compared with Rs 7.83 crore a year earlier.

Ceat's margin continued to surprise positively during the September quarter. On a sequential basis, the company's gross margin expanded by 230 basis points led by better product mix and lower raw material costs.

Product mix for Ceat improved due to the truck segment contribution being lower in September when compared to June and the two-wheeler contribution improving compared to the first quarter.

As a result of Ceat's strong results, most of its peers such as JK Tyre, MRF and Apollo Tyres are also trading with gains of as much as 11% in today's session. In fact, shares of JK Tyre and MRF were trading at their respective record highs.

What Are The F&O Cues Indicating?

Nifty 50's October futures added 1.4% or 1.34 lakh shares in Open Interest on Tuesday. They are now trading at a discount of 0.40 points as against a premium of 8.65 points earlier. On the other hand, the Nifty Bank's October futures shed 6.9% or 1.56 lakh shares in Open Interest. Nifty 50's Put-Call Ratio is now at 1.08 from 1.04 earlier.

Steel Authority of India, Bharat Heavy Electricals Ltd, Delta Corp, Balrampur Chini Mills, Hindustan Copper, India Cements, Manappuram Finance, Indiabulls Housing Finance, Gujarat Narmada Valley Fertilizers & Chemicals, and Multi Commodity Exchange of India continue to be in the F&O ban list, while Sun Tv Network and Punjab National Bank are out of the list.

Stocks to watch ahead of Wednesday's session:

HUDCO: Shares of Housing And Urban Development Corp will be in focus tomorrow as the government will sell up to 7% via offer for sale (OFS). The government looks to garner approximately Rs 1,100 crore from HUDCO OFS.

Bajaj Finance: The company reported its September quarter earnings on Tuesday. Bajaj Finance reports a 30% increase in profit and NII from the same quarter last year.

IRCTC ties up with Zomato for delivery of preordered meals through IRCTC’s e-catering portal (as a Proof of Concept) in the first phase at five Railway stations i.e. New Delhi, Prayagraj, Kanpur, Lucknow and Varanasi.

ICICI Bank, Kotak Bank: The Reserve Bank of India on October 17 said it has imposed a penalty or Rs 12.19 crore on ICICI Bank and Rs 3.95 crore on Kotak Mahindra Bank for non-compliance of certain regulatory norms.

Bajaj Electricals awarded a service contract by Power Grid Corporation of India, aggregating to Rs 347.29 crore.

Tata Elxsi: Net profit rose 5.9% to Rs 200 crore in Q2, the firm said in a filing on Tuesday. The company's revenue was up 3.7% at Rs 881.7 crore versus Rs 850.3 crore QoQ. EBIT rose 3.7% at Rs 238.5 crore, while margin came flat at 27.1% QoQ.

Mahanagar Gas signs joint venture with Baidyanath LNG for LNG business. MGL and BLNG will subscribe the initial share capital of JV in the ratio of 51:49.

Mazagon Dock signs contract with Ministry of Defence for construction and delivery of One Training Ship for Indian Coast Guard (ICG) at a cost of Rs 310 crore.

Lemon Tree Hotels signs pact for – 'Keys Select by Lemon Tree Hotels' in Vadodara. The property, which shall be franchised by Lemon Tree Hotels, is expected to open in FY 2026.

Meanwhile, foreign investors and domestic investors remained net buyers in the cash market on Tuesday.

First Published:Oct 17, 2023 6:18 PM IST