Stock Market Highlight: Nifty, Sensex rangebound; deep cut for broader market – Market

Britannia, Kotak Bank, TCS, Hindustan Unilever, and M&M were the top gainers in the Nifty 50. While Titan, Adani Enterprises, BPCL, Coal India, and SBI were the key laggards in the Nifty 50 on May 06.

Shares of One97 Communications were stuck in a lower circuit of 5% after the company’s COO and president, Bhavesh Gupta, resigned. “His resignation has been accepted by the Company and he will be relieved from the services of the company w.e.f. close of business hours on May 31, 2024,” said Paytm in an exchange filing.

Nifty PSU Bank‘s all constituent trades in red on May 06.

Courtesy: NSE

Courtesy: NSE

Britannia, Kotak Bank, TCS, JSW Steel, and Infosys were the top gainers in the Nifty 50. While Titan, Adani Enterprises, BPCL, SBI, and Coal India were the major losers in the Nifty 50 on May 06.

Courtesy: NSE

Courtesy: BSE

JM Financial maintained its buy recommendation on Titan Company’s stock but revised its target price downward to ₹3,825 from ₹3,940, attributing the adjustment to Titan’s March-quarter earnings falling below expectations.

According to JM Financial, while revenue was in line with expectations, lower margins across segments, particularly a weaker gross margin in jewelry and a lack of operating leverage in other segments, resulted in an overall nearly 3% miss on segment profits. The brokerage firm noted that the performance of the watches and eyewear segments has been volatile, requiring further attention before stabilizing.

JM Financial cautioned that near-term growth and margins may be affected by factors such as volatility in gold prices, electoral events, and fewer wedding dates. However, it emphasized that Titan remains committed to maintaining momentum in its jewelry division growth for the full year, reiterating its margin guidance of 12-13%.

Courtesy: NSE

Britannia rallied 9.7% to an intraday high of Rs 5,205.45 after the company declared its earnings for the quarter ending March of FY24. However, the company’s net profit declined by 3.76% on year but, its revenue grew by over 1% on year. The brokerages expect the company to grow in FY25. The stock was the top gainer in the Nifty 50.

The NSE Nifty 50 was up 42.90 points or 0.19% at 22,518.75, while the BSE Sensex was up 260 points or 0.35% at 74,137.53

In early trading on Monday, Titan Company’s stock plunged by over 7%, following the company reported weaker-than-expected March quarter results. Shares of Titan Company dropped by 7.57% to reach intra day low of Rs 3,285 apiece on the NSE.

After market hours on Friday, May 3, Titan reported a 5% year-on-year (YoY) increase in consolidated net profit, reaching Rs 771 crore for the quarter ending on March 31, 2024. Total income for the quarter also surged by 22% YoY to Rs 11,472 crore.

Kotak has revised its outlook on Titan stock, adjusting the target price from Rs 3,750 to Rs 3,600. This alteration follows a reduction in the FY25/26E consolidated jewelry EBIT margin estimate by 90-110 basis points (bps) and a corresponding decrease in EPS estimates by 5-8 percent.

“We’ve raised FY25-26E jewellery sales growth by 2 percent while lowering jewellery EBIT margin by 90-110 bps, resulting in a 5-8 percent EPS cut. We project a 17 percent consolidated jewelry sales CAGR over FY2024-27E,” stated Kotak.

The valuation of Titan by Kotak is based on a 60 times June 2026E PE ratio. However, Kotak warns that the stock is currently priced for perfection, emphasizing the importance of monitoring the adoption of lab-grown diamonds in India and Aditya Birla Group’s upcoming jewelry venture.

In early trading on Monday, Kotak Mahindra Bank‘s stock surged by over 4%, following the private sector lender’s release of Q4 results that exceeded expectations. Shares of Kotak Mahindra Bank rallied by 4.76% to reach Rs 1,622.50 apiece on the NSE.

“The Bank Nifty index faced selling pressure from higher levels but maintained its uptrend, closing near the immediate support of 49,000. Immediate resistance is at 49,200, and a break above could trigger short-covering moves towards 49,500 levels. Conversely, immediate support lies at 48,800-48,700, and a breach might lead to further downside towards the 48,400 mark, where the 20DMA is situated,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities

Kotak Mahindra Bank, Britannia Industries, Infosys, TCS, and LTI Mindtree are the top gainers on NSE Nifty 50 index whereas to laggards include Titan Company, Coal India, Adani Eenterprises, Adani Ports and SEZ, and Bajaj Auto.

Commenting on the Technical outlook of Nifty Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said The Nifty index is showing signs of near-term bearishness as it forms a double top pattern on the daily chart, coupled with a bearish engulfing candle. This suggests a sell-on-rise approach in the market. Confirmation of the double top pattern would require follow-up selling in the upcoming week. Immediate resistance is noted at the 22,600-22,700 zone, where aggressive call writing has been observed in the options market. On the downside, the index has immediate support at 22,300, and a breach below this level could accelerate the downside momentum.

Godrej Consumer Products, CG Power and Industrial Solutions, Lupin, Indian Bank, Marico, Gujarat Gas, Gujarat Fluorochemicals, Grindwell Norton, Happiest Minds Technologies, Route Mobile, Arvind, Prudent Corporate Advisory, Fusion Micro Finance, GHCL, Cartrade Tech, Arvind Smartspaces, DCM Shriram.

The NSE has added Aditya Birla Fashion, Balrampur Chini Mills, Biocon, GMR Infra, and Vodafone Idea in F&O on May 6, 2024.

Foreign institutional investors (FII) offloaded shares worth net Rs 2,392. crore, while domestic institutional investors (DII) mopped shares worth net Rs 690.5 crore on May 3, 2024, according to the provisional data available on the NSE.

The US Dollar Index (DXY), gauging the dollar’s value against a basket of six foreign currencies, experienced a marginal increase of 0.05%, reaching 105.13 in trading.

On Monday morning, WTI crude prices were trading at $78.16, reflecting a modest increase of 0.22%. Similarly, Brent crude prices saw a slight uptick, trading at $82.96, up by 0.17%.

Bloomberg reported that Wall Street interpreted the slowdown in the US jobs market as a sign that the Federal Reserve could commence rate cuts as early as September. Consequently, traders drove stocks sharply higher as bond yields decreased. The tech-heavy Nasdaq Composite concluded the session with a gain of 308.14 points or 1.95%, closing at 16,149.10. The S&P 500 also saw an increase, climbing by 63.59 points or 1.26% to reach 5,127.79, while the Dow Jones Industrial Average closed with a gain of 449.63 points or 1.18%, finishing at 38,675.29.