Jan 2nd 2024 Share Market Analysis Report

On Tuesday, January 2, domestic equity benchmarks, namely the Sensex and the Nifty 50, concluded in the red amid growing apprehensions regarding escalating geopolitical tensions and a substantial surge in crude oil prices. Furthermore, investors seemed inclined to lock in profits given the market's elevated valuation, exercising caution ahead of the impending release of December quarter earnings.

The Sensex concluded the trading day 379 points or 0.53 percent lower at 71,892.48, while the Nifty 50 settled at 21,665.80, marking a decline of 76 points or 0.35 percent.

Today's top gainers in the stock market include Divi’s Lab, closing at 4037 with a 3.09% increase, Adani Port concluding at 1079 with a 2.97% rise, and Sun Pharma finishing at 1295.15 with a 2.77% gain. The Nifty Pharma sector exhibited positive momentum today, recording a 2.46% increase and reaching 17,274.30 points.

Conversely, the day's top losers feature Eicher Motors at 3894 with a -3.57% decline, M&M trading at 1661 with a -2.48% decrease, and Ultracemco trading at 10205.1 with a -2.47% variation.

Technical Outlook on 3rd Jan

Nifty has remained in a mild profit taking mood up to 21329 levels positionally and Banknifty is also in a mild profit taking mood up to 46,765 levels positionally.

Derivative Outlook on 3rd Jan

PCR Analysis: Nifty PCR-OI has decreased compared with previous session and nifty has closed in negative both indicates CALL WRITING.

Open interest Analysis: Nifty future JAN contract Open Interest has slightly increased with negative nifty future close both indicating Short Buildup.

Cost of Carry (CoC) Analysis: Nifty JAN month contract has ended in low compare with FEB month contract and high range compare with previous session which indicates a recovery from lower levels.

India VIX Analysis: India VIX has settled at 14.58 vs 14.68 (DoD) basis which shows decrease in volatility.

Alok Industries experienced a significant surge of 20% following a substantial investment of Rs 3,300 crore by (RIL)

Reliance Industries Ltd (RIL) has invested approximately Rs 3,300 crore into the textile manufacturer Alok Industries by means of non-convertible preference shares.

In a filing on Tuesday, Reliance Industries Ltd (RIL) stated that it has subscribed to 3300 crores, 9% non-convertible redeemable preference shares of Re 1/- each of Alok Industries Ltd, amounting to Rs 3,300 crore, at par for cash. This acquisition of preference shares is considered a related-party transaction, having received approval from RIL shareholders and conducted on an arm's length basis.

The filing clarified that the promoter, promoter group, and affiliated companies hold no interest in the mentioned transaction. Following this announcement, Alok Industries' shares surged by 20%, reaching the upper circuit. Over the past year, the stock has delivered a return of 64%.

Alok Industries had previously disclosed that the non-convertible preferential shares would carry a 9% per annum cumulative dividend and could be redeemed at par at the discretion of the company within a maximum period of 20 years from the date of allotment.

Reliance Industries Ltd (RIL) serves as a promoter with a 40.01% equity share capital stake in Alok Industries, which was acquired by Reliance and JM Financial ARC in 2019 through the corporate insolvency resolution process. Alok Industries specializes in manufacturing home textiles, apparel fabrics, garments, and polyester yarns, engaging in integrated business operations for both its cotton and polyester verticals.

In the second quarter, Alok Industries witnessed a 20% year-on-year decline in revenue from operations, totaling Rs 1,359 crore. Despite this, the company's loss narrowed from Rs 191 crore in the corresponding quarter last year to Rs 175 crore in the current quarter. Notably, Alok Industries' EBITDA more than doubled, reaching Rs 46.18 crore compared to Rs 19.22 crore in the same period.

On Tuesday, RIL shares were trading flat at Rs 2,587 on the BSE.