Trade Setup: With geopolitical tensions easing and an emphasis on Q4 earnings, the Nifty bounces back from Friday’s lows

The Nifty index is gaining ground after a turbulent time characterized by global concerns, indicating a return to normality in the markets. Investor relief is mirrored in the Nifty’s upward trend as global concerns decrease. Buoyed by restored market optimism, the index has risen 600 points since it reached a low of 21,777 last Friday. All signs of confidence were sparked by Monday’s rally, which sent the Nifty into positive territory for the April Futures and Options (F&O) series.

The general markets have also recovered, as seen by the Midcap Index’s rise after five days of losses. In a similar vein, the small-cap index ended a two-day downward trend, indicating a rebound in the overall market. The Public Sector Undertaking (PSU) banks were the main drivers of Monday’s increase, as the index increased by more than 3% and improved investor mood.

Even with the general uptrend, HDFC Bank was the only heavyweight limiting the Nifty’s gains. But other major players, including L&T, ICICI Bank, Axis Bank, and Reliance Industries, all helped to spur investor confidence during the post-Friday follow-up purchasing session.

Looking forward to Tuesday’s session, the quarterly results of Reliance Industries, which were issued post-market hours on Monday, are expected to have an impact on market dynamics. The conglomerate may have set the tone for the day’s market activity when it released better-than-expected earnings supported by strong operational performance.

Along with more well recognized market names like ICICI Prudential, M&M Finance, Tata Elxsi, MCX, and Cyient DLM, a number of other significant players are scheduled to release their profits on Tuesday. Among them is Tata Consumer Products.

On Monday, institutional involvement strengthened once again. Domestic institutions made net purchases while overseas investors resumed their aggressive selling, signifying a change in the dynamics of the market.

HDFC Bank’s involvement was muted, although the Nifty Bank encountered resistance above 48,000. After three sessions of unsuccessful efforts, it did, however, manage to surpass this level intraday, indicating a noteworthy milestone. After a four-day losing run, the index had a near-2,500-point decline, which it has already recovered 45% of.

Nifty 50 futures throughout the series saw a 1% gain in open interest on Monday in the Futures and Options (F&O) sector, with current rollovers standing at 38%. Additionally, the put-call ratio for the Nifty 50 increased from 1.03 to 1.14, reflecting changing market sentiment.

While Exide Industries, Balrampur Chini, Bandhan Bank, and Metropolis Healthcare have left the F&O ban list, Hindustan Copper has returned. Notably, the F&O restriction still applies to Biocon, Vodafone Idea, Piramal Enterprises, SAIL, and Zee Entertainment.

The Nifty 50’s call side saw an increase in open interest between 22,350 and 22,600 strikes for the approaching April 25 expiration, while the 22,200 strike saw a loss. On the other hand, open interest on the put side grew between 22,200 and 22,350 strikes, suggesting possible levels of support for this Thursday’s monthly expiration.

Numerous company announcements and earnings releases might influence the market mood as investors prepare for Tuesday’s trading day. Below is a summary of important stocks to be aware of:

Reliance Industries (RIL): With strong operational performance, Reliance Industries generated strong profits that exceeded forecasts. The oil-to-chemicals business saw its margins rocket to a five-quarter high, while the consolidated margins beat expectations, coming in at an outstanding 18%. Reliance Retail saw a notable 18% increase in EBITDA during the quarter. The telecom division’s Jio attracted 10.9 million new customers, while its average revenue per user (ARPU) stayed constant at Rs 181.7. Furthermore, Reliance was able to effectively reduce its combined net debt from Rs 1.25 lakh crore to Rs 1.16 lakh crore.

Tata Consultancy Services (TCS): According to reports, TCS plans to introduce a performance incentive programme that would be correlated with employee attendance at work. Based on their attendance rates, employees will get different bonus percentages; if their attendance is less than 60%, they will not be eligible for a bonus. Bonus payments increase progressively, up to 100% for attendance above 85%, which has raised concerns about possible effects on worker morale and output.

Patel Engineering: In order to generate money totaling Rs 400 crore, Patel Engineering announced the opening of a Qualified Institutional Placement (QIP). With an indicative price set at Rs 56.53 per share, which represents a 10% discount to Monday’s closing price, the equity dilution via the QIP is projected to be 9%.

PSP Projects: In order to raise a total of Rs 244 crore, PSP Projects also started a QIP. The indicative issue price was set at Rs 670 per share, which represents a 2.8% reduction to Monday’s closing price. The estimated equity dilution, which has a 90-day lock-in period from the date of allotment, is 10.12% of the pre-issue outstanding equity share capital.

Kesoram Industries: Highlighting its merger with UltraTech, Kesoram Industries announced muted earnings owing to reduced margins. The Rayon and Chemicals industry showed signs of future recovery when, after many quarters, EBIT went positive despite obstacles. But in the middle of continuing restructuring measures, the business reported a wider net loss of Rs 244 crore, which raised worries.

Tamilnad Mercantile Bank: This bank demonstrated better performance indicators, as net interest margins increased and slippages fell by 27.4% in a row. Notably, the net and gross non-performing asset ratios decreased from quarter to quarter, indicating improved operational effectiveness and careful asset quality control.

Mahindra Logistics: The company had a mixed result, with sales rising by 14% on an annual basis but EBITDA falling by 11.2%. The business cited a number of reasons, including continuing cost-optimization measures, for the Rs 11.98 crore net loss. Despite difficulties, several business areas, such B2B express business, showed indications of improvement, highlighting the company’s adaptability in a changing operational environment.

M&M Finance: At one of its branches in the Northeast, a scam involving the falsification of KYC paperwork was discovered. This was a setback for M&M Finance. The firm money were embezzled as a result of the crime, which was discovered during the quarter that ended on March 31, 2024, albeit it is doubtful that the total sum involved would surpass Rs 150 crore. The RBI’s central fraud monitoring unit has been notified of the issue, underscoring the significance of strong risk management procedures in the financial industry.

Tejas Networks: Net sales increased to Rs 1,327 crore from Rs 299 crore the previous year, indicating remarkable financial performance. The company’s net profit turned a profit, going from a net loss of Rs 11.5 crore to a profit of Rs 146.8 crore. The management credited the successful completion of large-volume IP router deliveries and the ramp-up of BSNL’s 4G/5G RAN shipments for the impressive result.

Inox Wind: To discuss a possible bonus share issuance, Inox Wind’s board of directors is scheduled to meet on April 25.

Following a recovery in the S&P 500, US stock futures are holding firm on Monday night. Investors are cautiously hopeful due to a combination of tech resiliency and incoming economic statistics. Below is a detailed summary of the most recent market moves and the main variables influencing investor sentiment:

Overnight trade saw little movement in US stock futures; the Dow Jones Industrial Average futures edged up by 18 points, while the S&P 500 futures increased by 0.02%. On the other hand, the Nasdaq 100 futures saw a little decline of 0.06%. Tech stocks witnessed a significant comeback on Monday, ending a six-day losing skid for the Nasdaq Composite and the S&P 500. After large dips in equities like Nvidia, which rose over 4% during the trading session, investors jumped at the chance to “buy the dip” in tech shares.

Wall Street shifts its focus to upcoming economic data releases and earnings announcements that are expected for later this week. Investors are looking for information on how the economy is doing and where interest rates could go. Among the statistics, the US Treasury yields are noteworthy since they were mostly stable on Monday, indicating that the market was anticipating important economic data that may affect expectations for interest rates.

The pan-European benchmark Stoxx 600 index ended the week on a good note for European markets, ending 0.6% higher. Notably, the FTSE 100 in the UK had a daily gain for the fourth day in a row, exceeding the record close it had established in February 2023. Expectations of a Bank of England interest rate decrease this summer contributed to the positive mood and led to a rise in UK equities and a decline in the value of the pound versus the US dollar.

On Monday, crude oil futures saw a little decrease subsequent to Iran’s declaration that it will not intensify its fight with Israel. While June Brent futures finished at $87 a barrel, the May West Texas Intermediate contract settled at $82.85. Amidst persistent geopolitical tensions and supply worries, both benchmarks have registered notable increases year-to-date, up almost 16% and 13%, respectively, despite the fall.

Asia-Pacific markets continued to rise on Monday, helped by Wall Street’s surge in tech equities. Positive economic momentum is indicated by Australia’s composite purchasing managers index, which reached a two-year high. Later on Tuesday, Japan and India are scheduled to issue their PMI data, which might further impact the mood of the market in the area. Several indexes in the area showed optimism as trading got underway, with rises seen in the Nikkei 225, South Korea’s Kospi, and the S&P/ASX 200.

The Indian market got off to a good morning as the GIFT Nifty traded 65 points higher than the closing of Nifty Futures on Monday. The Indian market is prepared to respond to events on a national and worldwide scale as investors watch for more clues from both domestic and foreign markets.