MARKET SUMMARY
Indian markets are expected to open flat to marginally lower today, with the Gift Nifty at 25,684, showing a slight increase of 0.08%. This follows mixed global signals and a range-bound close of the Nifty around 25,740 yesterday. Trading is anticipated to remain within the 25,600–25,900 range. Stock-specific momentum may favor buying during dips, as supports at 25,500–25,600 attract interest. If Nifty remains above 25,740, there is potential for an upward move towards 26,300.
KEY DRIVERS
– Global cues are mixed, with US indices remaining flat post-rally and subdued activity in Asian markets. However, steady buying at lower levels is limiting the downside. Keep an eye on USDINR at 90.91 for potential pressure on the rupee.
– In earnings, Schaeffler India reported a significant Q4 profit increase of 35.9% to ₹322 crore, with revenue up by 27.5%. Elantas Beck also saw a 32.4% profit rise, suggesting potential follow-through in the auto and engineering sectors.
– The government is initiating an Offer for Sale (OFS) in IRFC, with a 2% stake at a ₹104 floor from February 25-26. There is also a block deal in Aditya Infotech worth approximately ₹1,000 crore. It is advisable to avoid new long positions before the bids.
– In a policy update, Power Grid’s equity cap has been increased to ₹7,500 crore per subsidiary, with a rights issue approved at ₹475 crore. This could lead to increased inflows in the energy infrastructure sector.
SECTORS TO WATCH
– Bullish sectors include banking, financials, auto, and energy, with continued sectoral strength. AU Small Finance, IDFC First, and Bharat Petroleum are notable for potential momentum.
– Exercise caution in the IT sector, which is under pressure pre-open with Infosys down 2% and TCS down 1.3%. The FMCG sector remains steady but selective, so it is wise to avoid overbought stocks.
EVENTS
– Quarterly results are expected from KSB, Sanofi India, and Foseco India, which could lead to post-announcement trading volatility.
– NBCC (India) is going ex-dividend, Bhandari Hosiery is going ex-rights, and Yashhtej Industries is debuting as an SME.
– The IRFC OFS window opens, and updates are expected from the Power Grid board.
RISKS
– Foreign Institutional Investor (FII) flows remain volatile amid REIT bulk deals, with PPFAS purchasing ₹2,364 crore against foreign sales. The expiry overhang continues to be a concern.
– Global uncertainty could arise if US economic data affects market sentiment. It is crucial to maintain tight stop-losses below 25,500 to manage potential risks.
CLOSING NOTE
The market is expected to remain range-bound with an upward bias. Consider buying on dips in the banking and auto sectors, secure profits at resistance levels, and employ smart trading strategies with stop-losses for a productive session.