June 26th 2024 Stock Market analysis

Nifty and Sensex Reach New Closing Highs as Energy and Infrastructure Stocks Surge

Indian benchmark indices continued their record run for a second consecutive session on June 26, with Nifty crossing 23,850 for the first time ever, led by banks and heavyweights.

At close, the Sensex rose by 620.73 points or 0.80 percent to 78,674.25, while the Nifty increased by 147.50 points or 0.62 percent to 23,868.80.

The BSE Sensex and Nifty50 indices hit new record highs of 78,759.40 and 23,889.90, respectively.

The Nifty Bank index also reached a fresh record high, approaching 53,000. After a muted start, the market remained flat for the first couple of hours, but gained strength in the afternoon trade, touching new record highs amid buying in the banking, oil & gas, and FMCG sectors. The biggest gainers on the Nifty included Reliance Industries, UltraTech Cement, Bharti Airtel, ICICI Bank, and Grasim Industries, while the losers were Apollo Hospitals, Bajaj Auto, M&M, Tata Steel, and Hindalco Industries.

Among sectors, banking, oil & gas, telecom, media, and FMCG rose by 0.3-2 percent, while auto, metal, and realty fell by 0.7-1.5 percent.

The BSE midcap index fell by 0.30 percent, while the smallcap index ended on a flat note.

Technical Outlook on 27th June

Nifty is expected to find immediate support near 23,759, followed by 23,650, with resistance levels at 23,977 and 24,086. Currently, Nifty is looking at potential profit booking.

Similarly, Bank Nifty is expected to find immediate support near 52,563, followed by 52,256, with resistance levels at 53,177 and 53,484. Bank Nifty is also looking at potential profit booking.

Derivatives Outlook on 27th June

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

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

Cost of Carry Analysis: Nifty June month contract has ended in low compare with July contract and negative range compared with previous sessions which indicates a negative bias.

India VIX Analysis: India VIX has closed at 14.05 vs 14.31 (DoD) basis which shows decrease in volatility.

Mazagon Dock Soars to New Record High After Attaining 'Navratna' Status

Shares of Mazagon Dock Shipbuilders soared by 7.5 % to reach a fresh record high of Rs 4,271.20 on June 26 after the company was granted 'Navratna' status by the Department of Public Enterprises, making it the 18th public sector undertaking (PSU) to receive this honor.

With this recognition, Mazagon Dock joins the ranks of esteemed companies like Engineers India, CONCOR, Bharat Electronics, Hindustan Aeronautics, RCF, NALCO, NMDC, RVNL, IRCON, and IREDA, all of which hold 'Navratna' status.

The 'Navratna' status enables Mazagon Dock to invest up to Rs 1,000 crore without requiring central government approval. Additionally, the company can invest up to 30 percent of its net worth annually, provided the total investment does not exceed Rs 1,000 crore.

Navratna companies also enjoy the flexibility to form joint ventures, establish alliances, and set up subsidiaries abroad. To qualify as a Navratna company, a PSU must first achieve Miniratna status and maintain a net profit of Rs 5,000 crore annually for three consecutive years, along with either an average annual turnover exceeding Rs 25,000 crore or an average annual net worth surpassing Rs 15,000 crore over the same period. For FY24, Mazagon Dock reported an annual turnover of Rs 9,466 crore.

Meanwhile, the stock surged over 4 percent in the previous session, driven by news of progressing talks to acquire more Kalvari-class (Scorpene) submarines for the Navy. The anticipated Rs 35,000-crore deal aims to significantly bolster India's submarine fleet.

Sources reported by ET revealed that the three new submarines in discussion will be larger and incorporate advanced electronics, enhancing their operational capabilities and endurance compared to previous models.

As a government-owned PSU under the Ministry of Defence, Mazagon Dock is the designated shipyard responsible for constructing naval vessels and submarines for the Indian Navy. Consequently, the Rs 35,000-crore deal to expand the Indian Navy's submarine fleet is expected to directly benefit Mazagon Dock.

Additionally, the stock has been on a strong upward trajectory in recent months, buoyed by the government's push for indigenization, increased capital expenditure in the sector, and growing export opportunities. Riding high on these growth levers, the stock has already delivered more than two-fold returns in the past three months.