April 1st 2024 Stock Market analysis

Record Highs: Sensex and Nifty Soar on First Day of FY25; Realty and Metals Lead the Way

Indian equity markets kicked off the 2024-25 financial year with a strong surge, extending their winning streak for a third consecutive session on April 1st, buoyed by widespread buying across sectors, notably in power, real estate, and metals.

Closing figures saw the Sensex up by 363.20 points, or 0.49 %, at 74,014.55, while the Nifty climbed 135.10 points, or 0.61 %, to reach 22,462. Both indices hit fresh highs during the day, with the Sensex peaking at 74,254.62 and the Nifty reaching 22,529.95. However, profit booking at higher levels led to a partial erasure of gains later in the session.

Among the top Nifty gainers were Tata Steel, JSW Steel, Adani Ports, Shriram Finance, and Divi’s Labs, while Eicher Motors, Titan Company, Bajaj Auto, LTIMindtree, and Nestle were among the losers.

With the exception of the auto sector, all other sectoral indices closed in positive territory, with metal, power, capital goods, healthcare, and real estate gaining by 1 to 4 percent, while oil & gas, information technology, and banking sectors rose by 0.5 percent each.

The BSE midcap index rose by 1.6 percent, and the smallcap index surged by nearly 3 percent. Hindustan Copper, DLF, and Indus Towers saw long build-ups, whereas Eicher Motors, Godrej Consumer Products, and Hero Moto Corp witnessed short build-ups.

Over 1050 stocks touched their 52-week highs on the BSE, including Action Construction, BASF, Cochin Shipyard, Cummins India, DLF, Dynamatic Technologies, Glenmark Pharma, Gujarat Pipavav, Indian Hotels, Indus Towers, Jindal Steel, Muthoot Finance, and Oracle Financial Services.

Technical Outlook on 2nd April

Nifty is likely to find immediate support around 22,411, followed by 22,360, with resistances anticipated at 22,513 and then 22,564. Currently, Nifty appears poised for a positive range-bound trade. Similarly, Bank Nifty may find immediate support near 47,442, then 47,306, while facing resistances at 47,714 and subsequently 47,850. Presently, Bank Nifty is also indicating a positive range-bound trade.

Derivative Outlook on 2nd April

PCR Analysis: Nifty PCR-OI has decreased with nifty has positive which shows CALL BUYING.

Open Interest Analysis: Nifty future April contract OI has decreased with positive close which shows Short Covering.

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 positive bias.

India VIX Analysis: India VIX has closed at 12.08 vs 12.83 (DoD) basis which shows decrease in volatility.

‍Metal stocks shine as China manufacturing rebounds, Hindustan Copper up 8%

Metal stocks surged in trading on April 1st following positive economic data from China indicating a rebound in the manufacturing sector, potentially driving increased demand for metals. China's manufacturing activity expanded for the first time in six months, reaching its fastest pace in 13 months, with the manufacturing purchasing managers index rising to 50.8 in March from 49.1 in February—a sign of stabilization in the world's second-largest economy, according to experts. Indian metal stocks experienced a strong upswing, with the Nifty metal index jumping 3.4 percent to a new high. Among its constituents, Hindustan Copper, Welspun Corp, and Vedanta were the top gainers, rising by up to 8 percent. The last commodity supercycle, which occurred in the mid-2000s, was driven by reforms in China and saw significant increases in prices of iron ore, steel, coal, and natural gas. Another contributing factor to the rise in metal prices is the global infrastructure push and increasing defence spending, leading to heightened demand for metals, as noted by Bolinjkar. As demand for copper, zinc, and lead rises, supply constraints cause prices to surge. Domestic demand for iron ore is expected to align with growth in infrastructure and construction, with the domestic steel sector positioned favourably compared to its global counterparts. Furthermore, as crude steel capacity inches toward 300 million metric tons by FY30-31, total demand for iron ore is estimated to reach around 435-445 million metric tons expected.