Bank Nifty closes above 43,339 for the first time, next hurdle 42,750

The Bank Nifty opened lower at 42,959, which was also the day's low. After some volatile moves, the index closed 33 points higher at 43,053. The banking index formed a small-bodied bullish candle on daily frame with a bigger upper shadow. It has to hold above 42,750 to make an up move towards 43,339 and 43,500, whereas supports are placed at 42,750 and 42,500 levels, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

The Nifty hit another high to close above 18,600 for the first time on November 29, extending the uptrend to the sixth consecutive session supported by positive global cues and buying in FMCG, metal and pharma stocks.

The broader market, however, saw profit booking, with the Nifty midcap 50, midcap 100 and smallcap 100 indices declining half a percent each. On the options front, the maximum Call open interest was at 19,000 strike followed by 20,000 strike, with Call writing at 18,800 strike then 18,700 strike. The maximum Put open interest was seen at 18,000 strike followed by 17,000 strike, with Put writing at 18,600 strike then 18,500 strike.

After opening flat at 18,552, which was also the day's low, the index traded higher for the rest of the day. It hit a new high of 18,678 and closed 55 points higher than the previous day at 18,618. The index has formed a bullish candle on the daily charts, making higher highs for the fifth straight session.

"The market is consistently holding higher high and higher low formation which is broadly positive. Hence the support has now shifted to 18,550 from 18,450," Shrikant Chouhan, Head of Equity Research ( Retail) at Kotak Securities said.
As long as the index trades above 18,550, the uptrend will continue. The market can move to 18,750-18,800, the expert said.

The data indicates that in near term, the Nifty may trade in range of 18,400 to 18,800. India VIX was up by 0.36 percent to 13.62 levels, but overall it has been cooling off for the last nine weeks and supporting the bulls.

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Top 5 stocks that moved the most on November 25

Benchmark indices ended on a flat note on the first day of the December series amid volatility. At close, the Sensex was up 20.96 points or 0.03% at 62,293.64, and the Nifty was up 28.70 points or 0.16% at 18,512.80.

IDFC | CMP: Rs 80.20 | The scrip added over 2 percent on November 25. According to an exchange filing, the scheme of amalgamation of IDFC Alternatives Limited, IDFC Trustee Company Limited, and IDFC Projects Limited (wholly-owned subsidiary companies of IDFC) into IDFC Limited and their respective shareholders was approved by the NCLT, Chennai Bench on November 22, 2022.

Punjab National Bank | CMP: Rs 53.45 | The stock price jumped over 5 percent after the lender announced t has received the Government of India's approval for a stake sale in UTI Asset Management Company. "The Exchange is hereby informed that the bank has received approval of DIPAM, Ministry of Finance for divestment of entire/part stake in UTI AMC in single or multiple tranches subject to compliance of SEBI regulations," PNB said in a stock exchange.

Axis Bank | CMP: Rs 887 | The scrip ended in the green on November 25. Analysts appeared impressed by the lender's long-term vision at the annual analyst day meeting on November 24. "A convincing analyst meets that Axis Bank could compete on its strengths," said brokerage firm Kotak Institutional Equities in a note. ICICI Securities said that the management of the lender demonstrated its ability to translate 'intent' to 'action' towards delivering guided outcomes and initiatives undertaken over the last few years to strengthen its capacity to deliver more efficient and sustainable outcomes.

Adani Enterprises | CMP: Rs 3,900.05 | The share price ended marginally lower on November 25. The company said that the board will meet to consider and approve the proposal for raising funds. In a statement to the stock exchanges, Adani Group's flagship firm had said that raising funds would be by the way of a public offering or preferential allotment issue, including a QIP. Billionaire Gautam Adani is also courting sovereign wealth funds in a push to raise roughly $5 billion across his sprawling business empire after lenders asked the group to reduce leverage, as per sources.

India Tourism Development Corp | CMP: Rs 404.55 | The stock hit the 20 percent upper circuit after the government announced it has fixed an indicative value for 'The Ashok' hotel at Rs 7,409 crore under the national monetization program. Presently, ITDC has a network of three Ashok Group Hotels, one Joint Venture Hotel, 1 Restaurant, 5 ATT Units, 15 Duty-Free Shops at Sea ports, and one Sound & Light Show.

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Nifty may cross 19,000 by December if global market supports

After a significant run-up in the market, Amit believes by December 2022, the Nifty will have a new lifetime high, and may also cross 19,000 if the global market supports it. The Indian stock market has already discounted the interest rate risk at the current valuation, says the Co-founder of Ashika Global Family Office Services.

At this level, with over 18 years of experience in the BFSI domain, Jain feels there are some value-buying opportunities in the pharma, IT, and banking sectors. Edited excerpts: With the falling inflation in the US, do you think a major concern is easing and now we don't have to worry, or do we need to watch out for more data?

On Thursday, US inflation numbers at 7.7 percent came in a pleasant surprise for global markets. Both Dow Jones and Nasdaq rallied 3 percent to 6 percent at the index level. Also, the US 10-year G-Sec bond yield fell below 4 percent, which has given a lot of comfort to bulls to take fresh long positions.

This declining trend for US inflation looks sustainable now as most commodity prices have cooled off by 10 percent to 20 percent in the last nine months. Hence, in my view, there is a higher chance that US inflation has already peaked two months back, and now, going forward, each inflation number will have some downtrend.

What are your thoughts on job cuts announced by several service companies in the US? Is it a big worry for the job market?

Any layoffs are always painful for professionals. So, of course, I am not feeling great for those who are laid off, but this may be the beginning of the end for interim problems faced by these US companies, as now they may have much higher productivity per employee, as most of the roles which are laid off were either from support function or from redundant job roles.

These layoffs certainly trigger a wave of concern for IT professionals worldwide.

What are your broad expectations from Union Budget 2023, especially ahead of the General Elections in 2024?

Till now all budgets by the ruling government have been extremely pragmatic and focused on the bottom of the pyramid of Indian society.

In my view, this trend will continue even in Union Budget 2023. We may have some further PLI (production-linked incentive) schemes for start-ups and mid-size corporates. Also, we may have some dedicated initiatives for farmers as rural demand continues to lag post-Covid.

What are your thoughts on the corporate earnings season that is ending soon? What do you make of the management commentaries about the future trend?

The results of most corporates have been in line with expectations. Most of the management is bullish on Q3 projections as inflation numbers are consistently coming down every month. Hence, we may see some revival in export-oriented sectors. At this level, we may see some value buying opportunities in pharma, IT, and banking.

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Bank Nifty may cross 45,000 in two quarters

Improving asset quality, lower provisioning and better capital adequacy in the banking sector will increase the profitability of the sector, taking the sectoral index beyond the 45,000 level in the next two quarters," Apurva Sheth of Samco Securities has said in an interview to Moneycontrol. He also says Samco Securities has been bullish on IT sector stocks for almost two months, and there are early signs that attrition in the sector has peaked.

Entry at the current level in top-rung IT stocks may reward investors handsomely, Sheth, with a research experience of more than a decade in the Indian stock market, believes. Edited excerpts of the interview:

Do you expect the rally to continue in the PSU banking space after a significant run-up in the recent past?

Public sector banks (PSBs) have performed better on certain aspects compared to their private sector peers. Conscious corporate lending practices and reduction of corporate slippages compared to private banks have given an edge to PSBs.Also, cleaner balance sheets and increased demand for lending will see the rally continuing.

Do you think the Nifty Bank can move beyond the 45,000-mark by the end of this financial year?

In addition to the factors mentioned above, improving asset quality, lower provisioning and better capital adequacy will increase the profitability of the banking sector, taking the Nifty Bank beyond the 45,000-level in the next two quarters.

The Nifty FMCG index has seen a good uptrend since June followed by a consolidation in the last month. Do you think the rally will resume and will take the index towards 50,000?

As the name suggests, the index houses FMCG stocks, which are considered defensive bets. As the benchmark indices are about to peak, the consolidation may continue for some more time in the Nifty FMCG index but the long-term story remains intact for Nifty FMCG.

Crude oil is the key raw material in the production of health care and skin care products. With crude oil prices expected to ease in the coming days/months, the uptrend in Nifty FMCG may coincide with a consolidation in the benchmark indices.

Do you see any sign of a sharp uptrend in the Nifty IT index in the coming months?

We have been bullish on the IT sector stocks for almost two months. There are early signs that attrition in the IT sector has peaked out. New hirings across companies/sectors have begun and margins have started expanding gradually. The recent beating-down of IT sector stocks have made valuations compelling. Entry at the current level in the top-rung IT stocks may reward investors handsomely, going ahead.

What is your take on tyre stocks that have given decent returns in the last month?

Prices of the key raw material, rubber, have gone down, and that is keeping cost under control. Overall demand has been good, and it is expected to remain so.

The recent festival sales in October, across segments, were the highest. The tension gripping international crude oil prices has eased significantly, indicating lower retail prices ahead. This has also aided the sentiment for tyre stocks.

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