Sensex Soars to Record Highs: Banking, Auto Stocks Shine While IT Lags Behind

On September 23, 2024, Indian markets saw a surge, with both the Sensex and Nifty reaching record highs in early trade. The rally was fueled by a wave of optimism following the Federal Reserve's rate cut last week, sparking a positive sentiment among investors. This reduction in interest rates has reignited a "risk-on" approach in the markets, driving investments in riskier assets such as equities.

Key Indices Movement:

• The Sensex rose by 384.30 points, or 0.45%, closing at 84,928.61.
• The Nifty 50 climbed 148.05 points, or 0.57%, to end at 25,939.00.

The market breadth was positive, with 2,273 shares advancing, 1,661 shares declining, and 119 shares remaining unchanged. The upward momentum was primarily driven by gains in banking, energy, and auto stocks, while the IT sector lagged behind.

Key Movers on September 23:

1. Indus Towers:
   CMP: ₹402 | Gain: 4%
   Shares of Indus Towers surged by 4% after CITI issued a 'Buy' recommendation on the stock with a target price of ₹500 per share. Although the Supreme Court's dismissal of the AGR petition was a headline, it was not expected to impact Vodafone Idea's cash flows immediately. However, the long-term sentiment surrounding the stock might be influenced by Vodafone Idea's future performance.

2. Adani Total Gas:
   CMP: ₹829 | Gain: 5%
   The stock jumped by over 5% after Adani Total Gas secured a $375 million financing package from global lenders. This marks the largest-ever global funding initiative in the City Gas Distribution (CGD) sector. The joint venture between the Adani Group and TotalEnergies of France secured these funds to boost its CGD business in India.

3. SpiceJet:
   CMP: ₹70 | Gain: 5%
   Shares of SpiceJet soared over 5% after the airline raised ₹3,000 crore through the issuance of shares to Qualified Institutional Buyers (QIBs). The capital infusion provided a much-needed financial boost to the struggling low-cost airline.

4. Hind Rectifiers:
   CMP: ₹856 | Gain: 5%
   Hind Rectifiers hit the upper circuit with a 5% rise after securing a ₹200 crore supply order from Indian Railways. This contract is set to be executed by FY26, driving long-term growth for the company.

5. Fusion Micro Finance:
   CMP: ₹275 | Loss: 10%
   The stock of Fusion Micro Finance plummeted over 10% after Investec downgraded its rating to 'Sell' from 'Hold'. The downgrade was attributed to the company's increased provisioning for Estimated Credit Loss (ECL) for Q2 of FY25 compared to the first quarter, indicating a more conservative outlook on potential defaults.

6. Aarti Drugs:
   CMP: ₹526 | Gain: 1%
   Aarti Drugs saw a modest gain of 1%, despite the US FDA issuing Form 483 with seven observations for its API manufacturing facility in Tarapur, Maharashtra. None of the observations were related to data integrity, which reassured investors to some extent.

7. Glenmark Pharma:
   CMP: ₹1,705 | Gain: 5%
   Glenmark Pharma shares jumped 5% after its Aurangabad manufacturing facility cleared a routine US FDA inspection without any observations, a significant achievement in maintaining quality standards.

8. Vodafone Idea:
   CMP: ₹11 | Gain: 4%
   Vodafone Idea shares gained 4% after the telecom operator signed a $3.6 billion (₹30,000 crore) deal with Nokia, Ericsson, and Samsung to supply network equipment over the next three years. This strategic partnership is expected to boost its 5G rollout across India.

9. Skipper:
   CMP: ₹478 | Gain: 15%
   Shares of Skipper surged 15% after Axis Securities initiated coverage with a 'Buy' rating and set a price target of ₹600 per share. The domestic brokerage sees 44% upside potential due to robust growth prospects in the company.

10. Nifty IT:
    Loss: 0.5%
    The Nifty IT sector was the only sectoral index in the red, falling by 0.5%. Major IT companies like Infosys, Tech Mahindra, and TCS dragged the index down. After substantial gains in previous months (12% in June, 13% in July, and 5% in August), the sector has been undergoing profit booking in September, resulting in a cumulative 2% decline so far this month.

Conclusion:
The stock market on September 23 saw a strong uptrend driven by sectors like banking, energy, and auto. However, IT stocks underperformed amid profit booking. Key movers like Indus Towers, Adani Total Gas, and SpiceJet led the gainers' list, while Fusion Micro Finance experienced a sharp decline due to a downgrade by Investec. The market sentiment remains buoyed by macroeconomic factors like the Federal Reserve's rate cut, which has strengthened investor optimism.

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Demat Accounts Surge: Over 42 Lakh Additions in June, Total Exceeds 16 Crore

In June 2024, India witnessed a significant surge in the opening of demat accounts, with over 42.4 lakh new accounts added. This represents the highest growth rate since February 2024, surpassing the previous month's addition of 36 lakh and significantly higher than the 23.6 lakh accounts opened in the same month last year. This marks the fourth time in recent months that new demat account additions have crossed the 40 lakh mark, a milestone previously achieved in December 2023, January 2024, and February 2024.

With these new additions, the total number of demat accounts now stands at over 16.2 crore, reflecting a 4.24% increase from the previous month and a 34.66% rise compared to last year. This sharp rise in account openings is attributed to a stable market, bolstered by strong foreign investor activity and a growing sense of confidence in the newly formed government.

Market analysts suggest that the current bullish sentiment in Indian equities, characterized by continued foreign investments and strong returns, has played a key role in driving the surge in demat accounts. The lack of market corrections has further fueled investor interest, as many new participants fear missing out on profitable opportunities. Additionally, ongoing IPOs, many of which have been heavily subscribed and are listing at premiums, have drawn fresh interest from retail investors.

As tax-filing season approaches, more individuals are looking to diversify their investments into equity markets, with the hope of increasing returns and reducing tax liabilities. Brokerages have also intensified their campaigns to promote financial inclusion, encouraging more people to enter the markets. According to Rajesh Palvia, an analyst at Axis Securities, the Nifty index is expected to reach 25,000 by the Budget period, with a year-end target of 28,000, further fueling optimism.

However, analysts caution that not all of the new accounts represent entirely new investors. Some are individuals shifting between brokers or opening multiple accounts to take advantage of different offers. A portion of the accounts could also be duplicates. Despite this, the momentum shows no signs of slowing down, and as long as markets perform well, the pace of demat account openings is expected to continue rising.

Deepak Jasani, an analyst at HDFC Securities, points out that the surge in demat accounts is a reflection of the broader market trend, with both retail and institutional investors showing increasing confidence in India's equity markets. As market sentiment remains positive, the influx of new accounts is likely to continue throughout the year.

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Market Movers: Top 10 Stocks That Defined September 17

On September 17, 2024, the Indian stock market saw a mixed bag of gainers and losers. Sensex and Nifty ended the session with slight gains, powered by telecom, banking, and construction stocks, while metal stocks faced declines. A total of 1,712 stocks advanced, 2,237 declined, and 109 remained unchanged, as per BSE data. Here's a detailed look at the top 10 stocks that saw the most movement:

1. Bajaj Housing Finance
   CMP: ₹181.5 per share
   Bajaj Housing Finance continued its stellar post-IPO performance, with shares hitting the upper circuit and surging by 10%. The stock, which debuted at ₹165, saw a 135% rise from its IPO price of ₹70. Investors remain bullish, extending its rally.

2. IGL
   CMP: ₹547 per share
   Shares of Indraprastha Gas Limited rose over 3% following an upgrade to 'buy' by UBS, which also hiked the target price. The stock rallied further due to strong volume growth prospects.

3. DCX Systems
   CMP: ₹347 per share
   DCX Systems surged to an upper circuit of 5% after announcing that its wholly-owned subsidiary had been granted an industrial license. This was seen as a key growth catalyst for the company.

4. Suzlon Energy
   CMP: ₹81 per share
   After delivering multi-bagger returns of 110% in just three months, Suzlon Energy saw a 4% dip due to profit booking. Despite the correction, the stock is still up 115% for the year.

5. SpiceJet
   CMP: ₹72 per share
   SpiceJet shares dropped nearly 7%, as investors booked profits following the stock's recent rally. The decline comes after the airline opened a Qualified Institutional Placement (QIP) to raise ₹3,000 crore at a floor price of ₹64.79 per share.

6. Geojit Financial
   CMP: ₹155 per share
   Geojit Financial's stock slumped by over 8%, even as the company's Rights Issue Committee is set to meet on September 19 to finalize key details about its upcoming rights issue, including the price and entitlement ratio.

7. Reliance Infrastructure
   CMP: ₹235 per share
   Shares jumped over 9% after the company announced a board meeting to discuss raising long-term funds. The stock surged despite no specific details about the mode or amount of fundraising.

8. Firstsource Solutions
   CMP: ₹308 per share
   The stock climbed by 3% following the announcement of a new partnership with Microsoft. The collaboration aims to deliver cutting-edge digital transformation services, boosting investor sentiment.

9. Ola Electric Mobility
   CMP: ₹118 per share
   Ola Electric Mobility saw its stock hit the upper circuit, rising by 10%, fueled by bullish calls from Bank of America and Goldman Sachs. The stock's growth outlook remains strong, with positive coverage from major global brokerages.

10. MGL (Mahanagar Gas Limited)
    CMP: ₹1,901 per share
    MGL shares rallied by almost 5% after UBS upgraded its rating to 'buy' and increased the target price, citing strong volume growth prospects.

This list highlights the stocks that captured the most attention on September 17, with notable performances from Bajaj Housing Finance and Ola Electric Mobility leading the gains, while profit-booking hit Suzlon Energy and SpiceJet.

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Bears Reclaim Market as Nifty Dips Below 25,200: Sensex Falls 203 Points

In a reversal of fortunes, Indian benchmark indices ended the day in the red, with the Nifty breaking its 14-day winning streak and closing below 25,200. The Sensex dropped by 203 points, reflecting a widespread decline across most sectors except for realty, FMCG, and pharma.

 

Market Summary:

·         Sensex: Down 203 points, closing at 82,352.64 (0.25% decline)

·         Nifty 50: Down 81.10 points, closing at 25,198.70 (0.32% decline)

 

Market Performance:

Indian markets mirrored global trends, starting the day with a gap-down and remaining in negative territory throughout most of the session. Despite some afternoon recovery, the indices finished lower.

 

Top gainers on the Nifty included Asian Paints, Grasim Industries, HUL, Apollo Hospitals, and Sun Pharma. Conversely, Wipro, Coal India, ONGC, Hindalco Industries, and M&M were among the biggest losers.

 

Sectoral Trends:

·         Gainers: FMCG, realty, and pharma sectors saw a 0.5% rise each.

·         Decliners: Auto, bank, energy, IT, and metal sectors were down between 0.4% and 1%.

 

Technical Analysis:

According to Rupak De, Senior Technical Analyst at LKP Securities, the Nifty has broken its upward trend, finding initial support at the historical swing high. The index might consolidate between 25,080 and 25,250, with a potential drop below 25,080 signaling further corrections.

 

Ajit Mishra, SVP of Research at Religare Broking, notes that the market's loss of nearly half a percent was driven by weak global cues. Despite selective buying in heavyweight stocks trimming some losses, the overall trend remains mixed. Mishra suggests maintaining focus on stock selection and trade management, with a strong support zone for the Nifty at 24,850-25,000.

 

Outlook for September 5:

·         Nifty 50: Potential consolidation between 25,080 and 25,250, with significant support at 25,000.

·         Sensex: Monitoring for further developments amid global market pressures.

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Godrej Industries Hits Fresh All-Time High with a 7% Surge on Heavy Trading Volumes

Godrej Industries witnessed a significant surge of 7% in trading on September 3, setting a new all-time high. The stock saw over 12 lakh shares being traded on the bourses, marking a 300% increase compared to its one-month daily average of four lakh shares.

 

Stock Performance on NSE

As of 2:00 PM, Godrej Industries shares were quoted at Rs 1,138 per share on the NSE, reflecting a 7.2% increase from the previous session's closing price.

 

Valuation Insights by ICICI Securities

ICICI Securities highlighted that Godrej Industries generates substantial value from its listed subsidiaries and associates, including Godrej Consumer, Godrej Properties, and Godrej Agrovet. Based on the brokerage's target prices for these subsidiaries and a 55% holding company (holdco) discount, Godrej Industries' value is estimated to be Rs 1,260 per share.

 

Current Trading Position

Despite the significant uptrend, ICICI Securities noted that the stock trades at a 62% discount to the combined market value of its subsidiaries and associates. They believe the subsidiaries and associates are poised to benefit from a recovery in the end-user industries.

 

Technical Analysis and Investor Advisory

A R Ramachandran, an Independent Research Analyst, pointed out that while Godrej Industries is showing bullish momentum, the stock is also extremely overbought on daily charts. He advises investors to consider booking profits as a daily close below the support level of Rs 1,067 could lead to a short-term target of Rs 859.

 

One-Year Stock Performance

Over the past year, Godrej Industries shares have surged by over 100%, doubling the wealth of its investors. In comparison, the benchmark Nifty 50 index has gained around 30% during the same period.

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