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Pre-market commentary for April 24: On Wednesday, Indian benchmark equity indices – the S&P BSE Sensex and the NSE Nifty 50 are likely to take cues from the Q4 earnings of Hindustan Unilever and Axis Bank. That apart, the adjustment of derivatives positions ahead of the April monthly expiry shall dictate the market trend.
The Sensex and Nifty have logged gains in the last three trading sessions. The BSE benchmark has surged over 1,250 points, while the Nifty has jumped 372 during this period. That said, on Tuesday the benchmarks ended with marginal gains.
Among the key developments on Tuesday, was a sharp drop in India VIX volatility index – the gauge for market volatility posted its steepest fall in five years and settled at record lows. This was the steepest correction since May 23, 2019, when the results of the 17th Lok Sabha elections were declared, and was the 12th biggest single-day fall for the index since 2008.
Analysts said markets may have factored in continuation of the current regime in the general elections. Easing of geopolitical tensions after Israel's relatively muted response to Iran's drone and missile strikes may have also contributed to the index declining 19.7 per cent to end the session at 10.2. READ MORE
Experts also attributed the sudden drop in India VIX to the reduction in lot sizes in Nifty options with effect from the May expiry.
Analysts, however, cautioned on getting complacent and taking aggressive overnight bets and instead remain vigilant and keep abreast of ongoing issues.
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The Nifty has recovered 670 points from its recent swing low of 21,777. The Nifty has reclaimed its level above 20-DEMA placed at 22,309. The downward gap zone of 22,503 and 22,427 is expected to remain resistance for Nifty in the near term. Support for the Nifty has now shifted up to 22,200, said Vinay Rajani, CMT, Senior Technical & Derivative Analyst at HDFC Securities in a note.
Echoing similar moves, Rajesh Bhosale, Technical Analyst at Angel One recommends buying Nifty at lower levels and booking profits at higher levels. Immediate support levels are seen at 22,280 followed by 22,250, with the bullish gap at 22,150 acting as a pivotal support. On the upside, resistance is anticipated at 22,450 – 22,500.
At 07:00 AM; Gift Nifty quoted around 22,425 suggesting a likely gap-up of 50-odd points on the NSE Nifty 50 index.
These are the factors that shall help determine the Sensex and Nifty trajectory on Wednesday.
Q4 earnings: Axis Bank and Hindustan Unilever (HUL) are the two companies among the Sensex 30 which are scheduled to announce March quarter results today.
According to analysts, HUL’s revenue and profit for the quarter under review may remain little changed as demand trends remain muted. They expect HUL's Q4FY24 revenue to grow in the range of 1 per cent to 2.5 per cent on a year-on-year basis, while net profit may stay flat. READ BROKERAGE EXPECTATIONS HERE
Axis Bank, meanwhile, may report a tepid numbers for the March quarter on the back of high base (sequentially), and lower treasury income. Analysts also expect Net Interest Margin (NIM) to contract. READ Q4 EARNINGS PREVIEW
Earnings calendar: 5Paisa, AU Small Finance Bank, Dalmia Bharat, DCB Bank, Equitas Small Finance Bank, Indian Hotels, Macrotech Developers (Lodha), LTIMindtree, Nitin Fire Protection, OFSS and Syngene International are among the notable companies scheduled to announce Q4FY24 numbers today.
Global markets: The US market ended on an upbeat note on the back of better-than-earnings from General Motors. Dow gained 0.7 per cent. Nasdaq zoomed 1.6 per cent, and the S&P 500 added 1.2 per cent.
Near home, Japan’s Nikkei rallied 2 per cent Wednesday morning. Kospi and Taiwan surged 1.7 per cent each.
ECB in focus: The European Central Bank (ECB) officials are scheduled to speak on Wednesday and may shed light on the likely future trajectory of interest rates in the Euro region. ECB has maintained interest rates at record-high levels for the fifth consecutive time during its April meeting, with the main refinancing operations rate remaining unchanged at a 22-year high of 4.5 per cent.
