March 12th 2024 Stock Market analysis

Indian Equities Close with Marginal Gains on Tuesday as IT Stocks See Drop

On Tuesday, Indian indices eked out marginal gains, with selling pressure evident across sectors except for IT. The BSE Sensex and NSE Nifty closed nearly unchanged as investors awaited the release of key domestic and US macroeconomic data later in the day. The Sensex edged up by 165.32 points, or 0.2%, to reach 73,667.96, while the Nifty inched up by three points, or 0.01%, to settle at 22,335.70. HDFC Bank led the gains, with its shares rising by 2%, followed by Tata Consultancy Services and LTI Mindtree. Conversely, Adani Enterprises, Cipla, and Grasim Industries emerged as the top decliners.

Technical Outlook on 13th March

Nifty is likely to find immediate support levels near 22,237 followed by 22,139, while resistances are anticipated at 22,433 and 22,531. Presently, Nifty exhibits a positive bias. Similarly, Bank Nifty is expected to encounter immediate support around 46,818 and 46,354, with resistances expected at 47,746 and 48,210. Bank Nifty also shows a positive bias at the moment.

Derivative Outlook on 13th March

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

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

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

India VIX Analysis: India VIX has closed at 13.64 vs 14.00 (DoD) basis which shows decrease in volatility.

ITC Shares Slide Below Rs 400 Mark, Decline 2% Amid BAT's Plans to Reduce Stake This Week

In early trade on March 12th, ITC shares declined as British American Tobacco (BAT) reportedly prepared to sell a portion of its stake this week. The London-based BAT, ITC's largest shareholder, has enlisted Wall Street giants such as Bank of America and Citigroup to execute a block deal estimated at around $2.5 billion, according to sources familiar with the matter. At 9:16 am, ITC shares were trading at Rs 401.15 on the NSE, marking a 2 percent decrease from the previous session's close. Typically conducted at a discount to prevailing market prices, the details of the transaction are subject to change, with the launch potentially extending into the following week depending on market conditions. Analysts and traders monitoring ITC note that while the proposed stake sale may not alter the company's fundamental outlook, it could temporarily weigh on the stock due to an anticipated supply overhang. Nonetheless, some view this development as an opportunity for investors, citing ITC's robust brand presence and growth potential in its FMCG business. The availability of a sizable block of shares could facilitate bulk purchases without exerting upward pressure on prices in the open market. However, BAT faces challenges in offloading its 4 percent stake in ITC, including navigating regulatory hurdles imposed by the Reserve Bank of India on foreign ownership in tobacco companies, which restricts potential buyers. BAT CEO Tadeu Marroco highlighted the complexities involved in divesting ITC shares, citing specific RBI approvals required for such actions and the resultant limitations on the buyer universe.

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