May 10th 2024 Stock Market analysis

Market Recap: Sensex and Nifty 50 Close the Week with 2% Decline; Experts Foresee Continued Volatility Ahead

On Friday, key equity indices, including the Sensex and the Nifty 50, closed higher, buoyed by buying in shares of select heavyweights such as ITC, Reliance Industries, Bharti Airtel, NTPC, Hindustan Unilever, and Power Grid, alongside positive global cues. However, these gains were insufficient to offset the losses incurred by the indices throughout the week. For the week ending May 10, both the Sensex and the Nifty 50 saw around a 2% decline, with the BSE Midcap and Smallcap indices falling 3% and 4% respectively. Investors witnessed a collective loss of nearly ₹10 lakh crore as the overall market capitalization of BSE-listed firms dropped to nearly ₹396.6 lakh crore from nearly ₹406.2 lakh crore over the week. The Indian stock market's recent movements have been divergent from major global peers, with domestic factors outweighing global cues. The significant selling by foreign portfolio investors (FPIs) ahead of the general election outcome has primarily driven the domestic market's decline. Moreover, the market has already factored in several positives and lacks fresh triggers to sustain gains and push higher. On Friday, the Sensex snapped its three-day losing streak to close 260 points, or 0.36%, higher at 72,664.47, with ITC, Reliance Industries, and Bharti Airtel contributing to the gain. After five consecutive days of losses, the Nifty 50 ended 98 points, or 0.44%, higher at 22,055.20. The BSE Midcap index rose by 0.81%, while the Smallcap index increased by 0.80% on Friday. Among the Nifty 50 stocks, 38 ended higher, with BPCL, Power Grid, and NTPC being the top gainers, while TCS, Cipla, and LTIMindtree ended as the top losers.

Technical Outlook on 13th May

Nifty may expect an immediate support near 21965 then 21875 and resistances are 22145 then 22235. Now the nifty is looking at a profit booking which remains at higher levels. And nifty remains in a profit booking mode only and it may be possible to test 21739 levels positionally and any short covering rally seen to utilise a selling opportunity.

Bank Nifty may expect an immediate support near 47083 then 46679 and resistances are  47896 then 48300. Now the bank nifty is looking at a profit booking which remains at higher levels. And Banknifty remains in a profit booking mode only and it may be possible to test 46128 levels positionally and any short covering rally seen to utilise a selling opportunity.

Derivative Outlook on 13th May

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

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

Cost of Carry Analysis: Nifty MAY month contract has ended in low compare with JUNE contract and low range compare with previous session which indicates a profit booking on higher levels.

India VIX Analysis: India VIX has closed at 18.47 vs 18.20 (DoD) basis which shows increase in volatility.

Tata Motors Soars: Q4 Net Profit Skyrockets to Rs 17,407 Cr Amidst Robust Vehicle Demand, 13% Revenue Surge

Benefiting from improved operating leverage and favourable commodity prices alongside robust volume growth across its segments, Tata Motors recorded an impressive 222 percent surge in consolidated net profit to Rs 17,407.18 crore. Revenue from operations also climbed 13 percent to Rs 119,986.31 crore. P.B. Balaji, Group Chief Financial Officer, Tata Motors, expressed satisfaction with the FY24 results, highlighting the company's record-breaking revenues, profits, and free cash flows. He noted that the India business is now debt-free, with plans to achieve net automotive debt-free status on a consolidated basis in FY25. Analysts' estimates were surpassed, with profit projected at Rs 7,084 crore for the fiscal fourth quarter, and revenue from operations expected to reach Rs 1,22,008 crore. Additionally, the company's board recommended a final dividend. Tata Motors also reported a notable increase in total wholesales in April 2024 compared to the previous year, with the Jaguar Land Rover (JLR) unit achieving record-breaking results. JLR's revenue for Q4 FY24 and FY24 as a whole reached unprecedented levels. Looking ahead, Tata Motors anticipates continued strong demand for passenger cars, albeit with a potentially moderate growth rate due to factors such as the high base effect and external influences like elections and heat waves. Despite this, the company remains focused on achieving market-beating growth, sustaining double-digit EBITDA margins, and generating positive free cash flows for its passenger vehicle business.