February 22nd 2024 Stock Market analysis

Nifty Hits Record High Above 22,250 Driven by Heavyweight Stocks; Positive Outlook Prevails

On February 22, the benchmark indices rebounded from their intraday lows, with heavyweight stocks driving the NSE Nifty 50 to a fresh all-time high of 22,252. Despite the day's volatility, the broader market also outperformed the headline indices. Looking ahead, analysts anticipate the Nifty to surpass a new lifetime high of 22,700, maintaining a positive bias. They advise investors to view any temporary dips in the broader market as opportunities to buy quality stocks that have demonstrated resilience. ICICI Securities analysts highlight a strong support level at 21,600. The Sensex and Nifty closed 0.7 percent higher at 73,158 and 22,217, respectively, on February 22, while broader indices Nifty Midcap 100 and Nifty Smallcap 100 also posted gains of up to 1 percent. This upward movement coincided with a decline in India VIX, which measures market volatility, by over 4 percent, falling below the 16 level. Despite a marginal decline in the Bank Nifty index, all other sectors witnessed gains. Notably, the Nifty IT and Auto indices emerged as the top sectoral performers on February 22. Year-to-date, foreign institutional investors (FIIs) have sold equities worth Rs 25,980 crore. In contrast, domestic institutional investors (DIIs) have been injecting funds into Indian markets. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, suggests that investors should closely monitor trends in DII activity for future market direction.

Technical Outlook on 23rd February 

Nifty is anticipated to find immediate support levels near 22,123 and 22,029, with resistances expected at 22,311 and 22,405. Presently, Nifty exhibits a positive bias.

Meanwhile, Bank Nifty is likely to encounter immediate support around 46,621 and 46,323, while resistances are projected at 47,217 and 47,515. Bank Nifty also maintains a positive bias at the moment.

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Derivative Outlook on 23rd February

PCR Analysis: Nifty PCR-OI has increased with nifty has positive close which shows PUT WRITING.

Open Interest Analysis: Nifty future Feb contract OI has increased with positive close which shows Long Buildup.

Cost of Carry Analysis: Nifty FEB month contract has ended in high compare with MARCH contract and high range compare with previous session which indicates a positive bias.

India VIX Analysis: India VIX has closed at 15.20 vs 15.93 (DoD) basis which shows decrease in volatility.

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Space Stocks Skyrocket as 100% FDI Approval Takes Off

Space-related stocks surged on February 22 following the Union Cabinet's approval of changes to the Foreign Direct Investment Policy (FDI) in the space sector. The government's decision to permit 100 percent investment under the automatic route for activities such as manufacturing components, systems, and sub-systems for satellites triggered the market rally. Shares of companies like MTAR Technologies and Data Patterns (India) soared nearly 6 percent, with others like Apollo Micro Systems, Azad Engineering, Paras Defence, Hindustan Aeronautics, and L&T experiencing gains between 1 and 2 percent. These stock surges were further fueled by recent successes such as Chandrayaan 3’s moon landing. Notably, Data Patterns (India) witnessed a significant boost, with the Singapore government acquiring Rs 578 crore worth of stake through bulk deals in February, leading to a surge of over 16 percent in the company's shares in the last month alone. 

Astra Microwave, anticipating significant growth in the space sector, expects to allocate 10 percent of its business this year to space-related activities, aiming to increase it to 15 percent next year. The company recently established Astra Space Technologies, signaling its commitment to becoming an end-to-end player in the space industry. Furthermore, the government's decision to allow up to 49 percent FDI in the automatic route for launch vehicles and associated systems, as well as up to 74 percent FDI for satellite manufacturing, operation, and related segments, underscores its efforts to encourage private sector participation and enhance the nation's capabilities in the global space economy.