February 5th 2024 Stock Market analysis

‍Feb 5th 2024 share market analysis 

The Indian stock market indices experienced a notable decline in the final hours of trading on February 5, attributed to investors' growing caution in anticipation of the upcoming RBI policy announcement and amidst ongoing corporate earnings reports.

Investors eagerly await the Reserve Bank of India's decision on February 8, seeking insights into potential rate adjustments and inflation forecasts. Additionally, corporate earnings are playing a significant role in shaping investors' movements within specific sectors.

Following robust purchases throughout November and December, foreign institutional investors (FIIs) shifted to becoming net sellers in January due to the strength of the dollar and an increase in global bond yields. Given their significant influence, FII inflows will be closely monitored as they impact the momentum of domestic equities. Analysts highlight geopolitical concerns as a primary risk to the ongoing market rally.

At the close of trading, the Sensex ended lower by 354.21 points, or 0.49 percent, settling at 71,731, while the Nifty saw a decline of 82.10 points, or 0.38 percent, closing at 21,771. Market breadth was mixed, with 1,785 shares advancing, 1,593 declining, and 111 remaining unchanged.

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‍Technical Outlook on 6th February 

Near-term support levels for the Nifty are anticipated around 21,653 followed by 21,535, with resistances expected at 21,889 and then 22,007. Currently, the Nifty is exhibiting a negative bias.

For the Bank Nifty, immediate support levels are projected near 45,609 and then 45,393, while resistances are seen at 46,041 and subsequently 46,257. Presently, the Bank Nifty demonstrates a negative bias.

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‍Derivative Outlook on 6th February

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

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

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

India VIX Analysis: India VIX has closed at 15.62 vs 14.70 (DoD) basis which shows increase in volatility.

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LIC Surges 7% and Breaks Rs 1,000 Mark for the First Time, Driven by Government's Value Push

On February 5, the share price of Life Insurance Corporation of India (LIC) climbed by 7 percent to Rs 1,011, surpassing its IPO price of Rs 949 once again, leading to the insurer's market capitalization crossing the Rs 6-lakh crore threshold.

In mid-January, LIC surpassed the State Bank of India to become the most valued public sector undertaking. Meanwhile, SBI's share price declined by 1.11 percent to Rs 643.2 on Monday, with its market capitalization standing at Rs 5.77 lakh crore.

Over the past three months, the LIC stock has witnessed an impressive surge of more than 55 percent.

Following its listing on the exchanges in May 2022, LIC, the nation's largest insurer, saw the government divest over 22.13 crore shares, equivalent to a 3.5 percent stake, through an offer-for-sale. The price range for the issue was set at Rs 902-949 per share.

LIC has been granted permission by the Reserve Bank of India to increase its stake in HDFC Bank to 9.99 percent by January 24, 2025, from its current holding of 5.19 percent in the private bank. Additionally, the state-owned insurer has announced intentions to introduce three to four new products in the upcoming months as part of its strategy to achieve double-digit growth in new business premiums.

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