Trade Setup For April 22: Nifty 50 Finds Support, Outperform EM Index And Signals Resilience
This week holds significant importance for FMCG stocks following a 7% loss for the index year-to-date.
The NSE Nifty 50 and the Nifty Bank have shown a notable adherence to support lines, indicating a positive trend. The Nifty has outperformed both the EM index and the Asia Ex-Japan Index, suggesting a potential for continued resilience in the market.
This week holds significant importance for FMCG stocks following a 7% loss for the index year-to-date. While metals enjoy global tailwinds, the telecom sector remains pivotal in focus for investors.
The daily chart reveals a divergence with a piercing candlestick pattern, complemented by a hidden bullish divergence and robust support at 21,700. Our analysis suggests that the index is likely to fluctuate within a broad range of 21,700 to 22,430, according to Aditya Gaggar, director of Progressive Shares.
The Bank Nifty has effectively tested the lower boundary of its ascending channel and found support at the 50-day moving average. Immediate support is identified at 46,900, while resistance appears to be capped at 48,160, Gaggar said.
"The IT sector has given a breakdown from its strong support level, which indicates a change of short-term trend to negative. We continue to retain our positive stance on the metal space. Couple of stocks look strong on the technical front. Geopolitical tension and result-oriented activity will continue to add volatility on either side," he said.
Given that the Nifty is nearing its immediate support levels and lower timeframe charts indicate oversold conditions, a potential pullback from these support levels is plausible. Given the heightened intraday volatility, it's advisable for traders to adopt a stock-specific approach and refrain from taking aggressive positions on either side, Ruchit Jain, lead of research at 5paisa.com, said.
FII And DII Activity
Overseas investors turned net buyers of Indian equities on Friday after four sessions of selling. Foreign portfolio investors mopped up stocks worth Rs 129.4 crore, according to provisional data from the National Stock Exchange.
Domestic institutional investors turned net sellers after seven sessions and offloaded equities worth Rs 52.5 crore, the NSE data showed.
Markets On Friday
India's benchmark indices reversed their four-session losing streak to end higher on Friday as index HDFC Bank Ltd. and Bajaj Finance Ltd. rose. However, the indices posted their worst weekly fall in over a month, as worries over the ongoing conflict between Israel and Iran dented investors' sentiment.
The NSE Nifty 50 settled 151.15 points, or 0.69% higher at 22,147 and the S&P BSE Sensex gained 599.34 points, or 0.83%, to end at 73,088.33.
Intraday, the benchmarks declined nearly 1% amid investor concerns that the West Asia turmoil might escalate to war after reports said Israel had likely launched an attack on Iran.
Major Stocks In News
Wipro Q4 (Consolidated, QoQ)
Revenue flat at Rs 22,208 crore vs Rs 22,205 crore (Bloomberg estimate: Rs 22,226.7 crore).
EBIT up 9% at Rs 3,560 crore vs Rs 3,267 crore (Bloomberg estimate: Rs 3,372.4 crore).
Margin at 16% vs 14.7% (Bloomberg estimate: 15.17%).
Net profit up 6% at Rs 2,858 crore vs Rs 2,701 crore (Bloomberg estimate: Rs 2,772.10 crore).
Jio Financial Services (Standalone, QoQ)
Total income up 5.22% at Rs 141 crore vs Rs 134 crore.
Net profit up 10.3% at Rs 78 crore vs Rs 70 crore.
HDFC Bank (Standalone, QoQ)
Net Profit was at Rs 16,512 crore vs Rs 16,373 crore
NII was at Rs 29,077 crore vs Rs 28,470 crore
GNPA was at 1.24% vs 1.26%
NNPA was at 0.33% vs 0.31%
HDFC AMC (Consolidated, YoY)
Net profit up 44% at Rs 541 crore vs Rs 376 crore (Bloomberg estimate: Rs 498.9 crore).
Total income up 33% at Rs 851 crore vs Rs 638 crore (Bloomberg estimate: Rs 724.80 crore).
Board recommends a dividend of Rs 70 per share.
Aditya Birla Fashion and Retail: The board approved the demerger of the Madura Fashion and Lifestyle business into a separate listed entity, Aditya Birla Lifestyle Brands.
Earnings In Focus
Reliance Industries, Rallis India, Mahindra Logistics, Hatsun Agro Product, Tejas Networks.
Top Brokerage Calls
Citi Research Cuts Wipro's Target Price
Citi Research has maintained a 'sell' rating on Wipro Ltd. and cut its target price to Rs 430 apiece from Rs.440, implying a potential downside of 5%.
Expects FY25 constant-currency revenue growth to be flat, the brokerage said in a note.
The BFSI is bottoming out post a tough FY24.
Wipro’s guidance and management commentary suggests caution on growth despite some green shoots seen in Capco.
Start of stability in BFSI led by Capco. Capco grew 6.6% on a sequential basis.
Goldman Sachs Raises Wipro's Target Price By 2.3%
Goldman Sachs maintained a 'sell' rating on Wipro Ltd. and revised its target price to Rs 430 apiece from Rs 420.
Demand environment remains unchanged, the brokerage said.
Guidance implies about 1% to 1.5% QoQ revenue growth in Q1 FY25.
This guidance bakes in early revival in Capco business.
Revenue growth of Wipro will underperform its peers, Goldman Sachs said.
Global Cues
Share indices in the Asia-Pacific region recouped Friday's losses to trade higher with a focus on China's loan prime rates. The Nikkei 225 was trading 226.68 points or 0.61% higher at 37,295.03, KOSPI index was trading 15.30 points or 0.59% up at 2,607.16 as of 06:33 a.m.
On Monday, the People's Bank of China will announce its one-year and five-year loan prime rates, with a special focus on the latter as it's closely linked with many property mortgages. The US stock market came under renewed pressure amid the Big Tech selloff, with traders remaining cautious about geopolitical risks ahead of the weekend, according to Bloomberg.
The S&P 500 Index and Nasdaq composite fell by 0.88% and 2.05%, respectively, as of Friday. The Dow Jones Industrial Average rose 0.56%. Brent crude was trading 0.50% lower at $86.85 a barrel. Gold was lower by 0.40% at $2,382.35 an ounce.
Rupee Update
The Indian rupee closed stronger on Friday after hitting a fresh record low earlier in the day amid a strong US dollar index and spike in crude oil prices due to the escalating West Asia conflict. The local currency strengthened seven paise to close at 83.47 against the U.S. dollar. During the day, it depreciated three paise to hit an all-time low of Rs 83.575 against the greenback. It had closed at Rs 83.54 on Thursday, according to Bloomberg data.
