Market HIGHLIGHTS: Sensex rallies over 1,100 pts, Nifty ends at 15,245, bulls takeover D-Street; RIL jumps 5%

The Nifty has been consistent in its upside momentum. It sustained well above the 14950 level and has zoomed thereafter. It should achieve 15300 as its first target and thereafter 15500. Good support lies at 14600-14700 and therefore any dip or intraday correction can be utilized to enter the index for higher targets. Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The market witnessed to extend the gain further after the decisive breakout of the Nifty 50 Index level of 14850. The market is likely to hold the momentum and reach the level of 15280-15300.14970-15000 level is expected to act as a support zone from the short-term perspective. the momentum is observed indicators like RSI, MACD to stay positive and the upside movement is likely to continue.: Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited

Given the continued rebound in high-frequency key economic indicators in Feb’21, we believe the underlying strength of domestic equities remains intact. Further, likely pick up in capital expenditures in FY22E and impact of new reforms announced in the budget to stimulate investment and consumption should continue to support the ongoing rebound in corporate earnings. In our views, infrastructure, industrials, engineering, building materials, banks and select auto stocks are likely to outperform in the medium to long term perspective as these are the key beneficiary of higher capital expenditures.Binod Modi, Head Strategy at Reliance Securities

Domestic equities extended gain for the third consecutive day as fading concerns of rising bond yields and continued rebound in high-frequency key economic indicators in Feb’21 emboldened investors. Additionally, global markets also remained supportive. Financials were a key market driver today followed by IT, Metals and Reliance Industries. Auto stocks witnessed pullback today after sharp recovery witnessed in the last two days. Notably, the volatility index fell sharply again for the third consecutive day.: Binod Modi, Head Strategy at Reliance Securities

"At the higher end of the price band, MTAR Technologies IPO is priced at a PE ratio of ~ 56.5 times FY20 EPS. While this looks to be aggressively priced, the company has shown strong growth in its topline and bottomline over the last three years. Further, its margins and return ratios are also better as compared to the industry. Going forward, the management is confident of healthy double-digit growth in upcoming financial years. MTAR has developed strong expertise in the clean energy segment. Given these positives, the valuations are likely to sustain," INDmoney said in a report.

February 2021 proved to be a roller coaster ride for the Nifty 50 index, where the first trading day of the month saw a 5 per cent rise in the index, while the last day witnessed a correction of 4 per cent. The 2020 pandemic rally was driven by significant FII buying on the back of multiple factors including the low-interest rate regime.

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TCS, Infosys, Wipro, HCL Technologies, Tech Mahindra and other bluechip IT shares will likely beat consensus analyst estimates, given that accelerating technology spends across the globe is aiding revenue growth and margin expansion for the industry. The upside in information technology stocks has not yet peaked, even after the strong bull run in these shares for almost a year now, Edelweiss Securities said. The global IT industry could be staring at a $1 trillion opportunity in cloud sales, of which $175 billion could flow into Indian IT firms, the brokerage firm said a recent research note. “We believe based on our several interactions with global technologists/hyper scaler experts that cloud sales of hyper scalers can lead to 3 times services revenues spread over next 5-6 years,” Edelweiss said.

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Domestic equities should continue to do well in 2021 led by sustainable FPI inflows on the back of soft monetary policy of the global bankers (despite rising bond yields), sustained recovery in corporate earnings (which also got a boost from the Union Budget) and continued improvement in economic activities with the progress on COVID-19 vaccination drive. We have upgraded 2021 Nifty target to 16,300. 

We like MTL given its complex/wide product portfolio, presence in niche space, strong client relationship and high entry barriers. The issue is valued at 47.3x FY21E P/E and 3.7x P/BV on an annualized and post-issue basis. We believe MTL could benefit from the government impetus on indigenization. Hence we recommend Subscribe for Long Term. Further given the current buoyant market and high interest for defence stocks, the issue could see listing gains as well. Risk: 49% of its revenues is derived from a single customer - Bloom Energy, US.: Motilal Oswal Financial Services

MTAR Technologies IPO has been subscribed 2.31 times so far on day one of the bidding process. Retail investors have subscribed their reserved portion 4.37 times while non-institutional investors 59 per cent.

Considering the sharp upmove recently, we would remain sceptical on the markets in the near term. Going forward, with lack of any fresh domestic trigger, the markets would continue to take cues from global peers. The bond yields would continue to remain one of the important factors for equity investors globally. Further, high-frequency economic indicators would remain on radar to track the economic
recovery. Therefore, we would advise investors to be stock selective and focus on companies that have strong growth prospects and sound fundamental.: Religare Broking Ltd

Bharti and Jio's participation with focus on both coverage and capacity spectrum enhancement was in line with our expectations. However, the quantum of spectrum purchase was significantly higher than expected, especially for Jio. Although the auction overhang is behind, the delay in tariff hike will continue to restrict value creation in Bharti despite strong execution. Higher than expected debt due to spectrum payout is leading to a target price reduction to Rs 686 vs Rs 713 earlier. We estimate equated annual instalment for spectrum purchased starting from FY24E will be Rs50bn/25bn/3bn for Jio/Bharti/VIL.: Emkay Global Financial Services

Kalpataru Power Transmission Limited (KPTL), has announced that it has secured new orders Rs. 1,554 Crores. The management has said that they have good visibility across all the businesses. Sale of Transmission Asset, strategic stake divestment in Logistic business will result in a significant deleveraging of the balance sheet over the next few quarters. Management guidance for a 40% pledge reduction over next one year will also be a positive and will lead to a significant rerating for the company. We have a BUY rating on KPTL with a target price of Rs. 480.: Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd

BSE Sensex was trading 730 points or 1.45 per cent at 51,026, while the broader Nifty 50 index was ruling near the crucial 15,150 level.

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The market opened on a high following the positive domestic sentiments and positivity over the faster economic recovery. On the sectoral front, telecom stocks were in limelight as India's first auction of telecom spectrum in five years ended with Rs 77,814.80 crore of airwaves being acquired. All major sectors are trading on a positive note except for the Auto sector. Tata Steel, JSW Steel, Adani Ports, Hindalco, SBIN are the top gainers on the flip side Heromotoco, Bajaj-Auto, Maruti, Eicher Motor and M&M are the top losers on Nifty.: Gaurav Garg, Head of Research at CapitalVia Global Research

BSE Smallcap index was up 1.61%, helped by double-digit growth in stocks such as Adani Total Gas, IFCI, and MTNL. Meanwhile, BSE Sensex was up 1.38%.

Support for Nifty currently is placed at 15,000, according to Vishal Wagh, Head of Research, Bonanza Portfolio. He added that chances of profit booking are slim in the current market that could help the index sustain above 15,000 levels.

Nifty has now filled the gap that was made last week. If the index sustains above 15,176 then we might see further momentum that could take Nifty higher, re-testing the highs of 15,400.

~ Vishal Wagh, Head of Research, Bonanza Portfolio.

India VIX, the volatility gauge of domestic stock markets, was down 5.22% on Wednesday as stock markets surged higher. India VIX was at 22.37.

India’s services activity expanded at the fastest rate in a year during February, while employment fell further and companies noted the sharpest rise in overall expenses, a monthly survey said on Wednesday.

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Share price of Bharti Airtel and Mukesh Ambani’s Reliance Industries surged on Wednesday, a day after the telecom companies revealed their telecom spectrum shopping list. Reliance Industries shares surged 1% to hit an intra-day high of Rs 2,133 per share, while Bharti Airtel was among the top gainers on Sensex, up 1.5% to hit a high of Rs 549.5 apiece. Both Bharti Airtel and Reliance Industries-owned Jio strengthened their network infrastructure, purchasing Rs 18,700 crore and Rs 57,000 crore worth of spectrum, respectively. Meanwhile the third private telco, Vodafone Idea was down nearly 2% after making a meagre spectrum purchase worth Rs 1,990 crore.

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MTAR is a leading precision engineering solutions company engaged in the manufacture of mission critical precision components with close tolerances and in critical assemblies. Since its inception, MTAR Technologies has significantly expanded its product portfolio including critical assemblies and manufactures a wide range of complex product portfolios to meet the varied requirements of the Indian nuclear, Defence, and Space sector. MTAR Technologies is uniquely positioned given that it is one of a kind company catering to marquee clients like ISRO, DRDO, NPCIL, Bloom Energy and Rafael. At the higher end of the price band the company is offering the shares at P/E multiple of 49.1xFY20 EPS. We believe that the company is uniquely positioned to benefit from the Government’s focus on the defence sector and make in India initiative. We are positive on the long-term prospects of the Company and recommend "SUBSCRIBE" to the MTAR Technologies IPO for long term as well as for listing gains.Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd

Online travel agency Easy Trip Planners’ Rs 510 crore initial public offering (IPO) is set to open for subscription on March 8, 2021. The company has fixed a price band of Rs 186-187 per share. The public issue will close on March 10, 2021, for the subscription. The last heard grey market premium in Easy Trip Planners shares was Rs 150-160 apiece. Delhi based online travel agency shares were seen trading at Rs 347, implying a premium of over 85 per cent over the issue price in the grey market on Wednesday. 

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There were further jobs losses across both the manufacturing and service sectors, which also could restrict domestic consumption in the coming months. However, with capacity pressures mounting, business sentiment strengthening and the vaccination programme widening, it seems that the best days are ahead of us regarding employment growth: Pollyanna De Lima, Economics Associate Director at IHS Markit

The February PMI data showed a solid growth performance for the Indian service sector which, alongside a robust upturn in  manufacturing production, pushed up the Composite Output PMI to a four-month high. Economic activity is generally expected to recover in the final quarter of fiscal year 2020/21 after coming out of technical recession in Q3, and the latest improvement in the PMI indicators points to a strong expansion in the fourth quarter should growth momentum be sustained in March.:  Pollyanna De Lima, Economics Associate Director at IHS Markit

Rising from 52.8 in January to 55.3 in February, the seasonally adjusted India Services Business Activity Index pointed to the sharpest rate of expansion in output in one year. Moreover, the latest reading extended the current growth sequence to five months. Survey participants linked the upturn to improved demand and more favourable market conditions.

Seems like the unwinding session of carry trades have ended as a result of which the USDINR began retracing after hitting highs near 73.80 levels. Further, rupee has remained on a defensive mode led by dollar selling by exporters and PSU’s apparently on behalf of RBI, thereby keeping the pair well below 73.50 mark in onshore. Unlike previous two trading sessions where panic buying had taken pair above 73.75 levels in NDF, yesterday’s session suggests that the pressure on the rupee has been released in offshore too as the momentum in the pair remained muted and losses were capped at 73.55 levels. If RBI begins unwinding of accumulated dollar forward that it bought so far, spikes close to 73.60-73.80 shall not be surprising by March end. However, erratic losses in the rupee shall be capped due to channel inflows and improved global sentiments. Overall, short term range for USDINR is 72.80-74.50 levels. Amit Pabari, managing director, CR Forex Advisors

On domestic front, the pipeline of IPO’s are lined up worth a cumulative Rs 12,000 crore and are expected to hit the market over the next 3-5 weeks thereby bringing more inflows to the country
•    Easy Trip Planners Rs 510-crore IPO
•    Kalyan Jewellers Rs 1,750 crore IPO
•    Laxmi Organics Rs 800-crore IPO
•    Craftsman Automation Rs 150 crore
•    Anupam Rasayan Rs 760 crore
•    Suryoday Small Finance Bank 
•    Aadhar Housing Finance Rs 7,300 crore (Amit Pabari, managing director, CR Forex Advisors)

The Nifty has opened well above the resistance zone of 14950. We need the markets to keep above this level for a few hours which would cement the bullish trend. The index can thereafter claim higher targets of 15300 and then 15500. 14700-14800 has now become a good support range for the markets.: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

Barring Nifty Auto and Nifty Pharma indices, all the sectoral indices were trading in the green. The Nifty Metal index surged over 2.5 per cent.

Nifty Midcap 100 index hit a record high of 24,384.35 in Wednesday's strong trade. Similarly, Nifty SmallCap 100 index surged nearly one per cent to scale a fresh 52-week high of 8,423.40.

Bajaj-Auto was the top index loser, followed by Maruti Suzuki, HCL Tech, Mahindra and Mahindra, TCS and Tech Mahindra.

Index heavyweights such as State Bank of India (SBI), Power Grid Corporation of India, Housing Development Finance Corporation (HDFC), Axis Bank and ONGC were among top BSE Sensex gainers.

BSE Sensex jumped 400 points or 0.80 per cent to 50,700, while the broader Nifty 50 index gained 132 points or 0.88 per cent to trade at 15,050.70.

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MTAR Technologies Initial Public Offering (IPO) opens for subscription today. The company is looking to raise Rs 596 crore through the public issue which is an amalgamation of an Offer for Sale (OFS) by existing shareholders and a fresh issue of equity shares. MTAR Technologies, a leading maker of nuclear, defence & aerospace equipment, fabrication facilities and fuel cells. Through the issue, promoters of the company will prune their stake from the existing 62.24% to 50.25%, while public shareholding in the company will increase to 49.75% from 37.76% pre-issue.

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COMEX gold trades little changed near $1732/oz after a 0.6% gain yesterday. Gold has recovered from June 2020 amid retreat in US dollar and bond yields from recent highs, optimism about US stimulus package, renewed virus concerns, mixed economic data, loose monetary policy stance of central banks and minor ETF inflows. Gold may continue to sway along with US dollar however a sustained rise is unlikely until there is sharp correction in bond yields or concrete measures on US stimulus.: Ravindra Rao, VP- Head Commodity Research at Kotak Securities

The market has formed a continuation formation followed by the formation of the Harami pattern which it has formed on Monday. It is bullish for the market. Also, the Nifty/Sensex closed between the bearish gap, which it had left between 15065-14919 / 50250-50991 last Friday. The market breadth was also encouraging as along with IT and FMCG we saw bullish activity in financials. Based on the daily chart the Nifty/Sensex is heading for the minimum target of 15065/50750. 

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BSE Sensex jumped 458 points to 50,754, while the broader Nifty 50 index gained 265 points to trade at 15,184.50 in the pre-opening session.

Nifty futures were trading 33.50 points or 0.22 per cent up at 15,017 on Singaporean Exchange. On Wednesday, the Nifty 50 index may open above the 15,000-mark after a three-day gap. Market participants will track global cues, stock-specific developments, oil movement and rupee trajectory for further cues. According to a technical analyst, the Nifty/Sensex is heading for the minimum target of 15065/50750 based on the daily chart.

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