April 12th 2024 Stock Market analysis

Market Recap: Sensex and Nifty Close 1% Lower Amid Broad-Based Selloff

‍Benchmark indices Sensex and Nifty experienced a notable one percent decline on April 12, attributed to a broad-based selloff. This downturn in investor sentiment followed the release of US CPI inflation data, which dashed hopes of a June rate cut and triggered a surge in treasury bond yields.

Tata Consultancy Services, a major IT services firm, initiated the earnings season for tech companies by announcing its Q4 FY24 financial results on April 12. The company reported a 9.1 percent increase in consolidated net profit to Rs 12,434 crore for the quarter ended March 31, 2024, compared to Rs 11,392 crore in the corresponding period last year.

Market participants are eagerly awaiting the impact of TCS's results on the equity market on April 15. On April 12, TCS closed 0.5 percent higher at Rs 4,003.80 on the NSE.

By close, the Sensex was down by 793.25 points or 1.06 % at 74,244.90, while the Nifty 50 closed lower by 234.40 points or 1.03%  at 22,519.40. Among the sectors, Nifty Midcap 100 and Nifty Midcap 150 reached their respective record highs during the session. Divis Laboratories, Tata Consumer Products, Nestle, and TCS emerged as the top Nifty gainers, while Sun Pharmaceutical Industries, Maruti Suzuki, Power Grid Corp, and Titan Co were among the biggest laggards.

All sectoral indices concluded in the red, with Nifty Pharma and Nifty Healthcare experiencing the most significant declines at 1.8% and 1.5%,  respectively. Nifty Media, Nifty PSU Bank, and Nifty FMCG also closed lower by over 1 percent each.

Additionally, the BSE midcap index slipped by 0.4 percent, and the smallcap index shed 0.5 %. Notable activities included long buildup in IRCTC, Metropolis Healthcare, Syngene International, and Bharat Electronics, while short buildup was observed in Sun Pharmaceutical Industries, Page Industries, Laurus Labs, and Zydus Lifesciences.

On the BSE, Aarti Industries, ABB India, Aegis Logistics, Bharat Electronics, Cummins India, Eicher Motors, among others, reached their 52-week highs.
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Technical Outlook on 15th April

Nifty experienced mild profit-taking on Friday, with the possibility of continued booking once it closes below the 22,500 levels on the daily chart, potentially reaching down to 22,248 levels. From there, a mild recovery in Nifty could be anticipated. Bank Nifty, on the other hand, may undergo mixed trading within the range of 47,925 to 49,635 levels, depending on the position.

Derivative Outlook on 15th April

PCR Analysis: Nifty PCR-OI has decreased with nifty has negative which shows CALL WRITING.

Open Interest Analysis: Nifty future April contract OI has decreased with negative close which shows Long Unwinding.

Cost of Carry Analysis: Nifty April month contract has ended in high compare with MAY contract and high range compare with previous session which indicates a recover from lower levels.

India VIX Analysis: India VIX has closed at 11.53 vs 11.11 (DoD) basis which shows increase in volatility.‍

Vodafone Idea's Rs 18,000 Crore FPO Set to Open on April 18, Floor Price Fixed at Rs 10‍

Vodafone Idea's Rs 18,000-crore follow-on public offer (FPO) is scheduled to open for subscription on April 18, as announced by the telecom company on April 12. The floor price for the issue has been set at Rs 10 per share, with a cap of Rs 11.

The offer is set to close on April 22, with anchor bids being approved on April 16, according to the company's exchange filing.

Investors have the opportunity to bid for a minimum lot of 1,298 equity shares, with the minimum application amount standing at Rs 14,278 for one lot at the upper end of the price band. The FPO follows the company's board approval on February 27 to raise up to Rs 20,000 crore via equity. Recently, it raised Rs 2,075 crore through preferential shares issuance to Oriana Investments Pte Ltd, an Aditya Birla Group entity, at Rs 14.87 per share, a 40 percent increase from the FPO floor price.

Besides the equity fund raise, the telecom operator is reportedly in discussions with banks to secure debt funding, potentially totaling Rs 45,000 crore as a mix of equity and debt.

CLSA, in a recent note, suggested that Vodafone Idea shares could drop to Rs 5 following a loss of 17 million subscribers over the past year. It cautioned about a potential financial crunch in fiscal year 2026, when annual spectrum and AGR payments of up to $4 billion will be due, unless the government converts debt principal to equity at the end of the moratorium.

Despite doubling over the past 12 months, Vodafone Idea's stock has corrected by 30 percent from its recent peak.

On April 12, the stock was in the F&O ban for the session, implying no new positions could be initiated in the stock.