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Lok Sabha election begins: How Nifty may behave before results and which stocks to buy?

April 19, 2024 - 9:58am
As polling for the seven-phase-long Lok Sabha election began from today, Dalal Street's 9 crore investors would be closely tracking the mood of 96.8 crore voters spread across India. Ahead of the voting for the first phase, Sensex has given up almost all of its gains made in 2024 after rewarding investors with a 20% upside last year.Typically, the market starts pricing in the impact of the election several months before but remains flattish during the elections. Dalal Street's pre-election rally started on December 4th 2023 when the Sensex rallied by 1384 points in response to the state election results which saw BJP retaining power in Madhya Pradesh and wrestling Rajasthan and Chhattisgarh from the opposition."Sensex and Nifty will likely remain range-bound till the time the first 3-4 phases of voting is over in the next one month. After that, smart money will start building positions in anticipation of the outcome of the election. Investors won't wait till the results are announced to go long or short," Sunny Agrawal, Head of Fundamental Research at SBIC Securities told ETMarkets.For the next one month, therefore, he expects stock-specific action based on Q3 results and earnings, but any large upside or downside looks limited"The outcome of the election is already priced in. The dip we have seen in recent days is predominantly due to external factors related to rising crude oil prices and FPI outflows because of rising bond yields and amendment in India-Mauritius tax treaty," Agrawal said, adding that the volatility is purely driven by liquidity issues.Another positive factor during the election season is the hope of a good monsoon with the Indian Meteorological Department predicting above average rainfall this year.Also read | Chote Miyan charm! 32 smallcap stocks just became more popular with mutual fundsAlthough seemingly unrelated to the election cycle, the FPI behaviour in the last few days isn't a good sign. In the last 4 trading sessions, foreigners have sold Indian stocks worth nearly Rs 20,000 crore. As a result, Sensex has also fallen 2,500 points during the period.“We would expect a dip in markets in the months post elections in line with what we have seen most election cycles after 1999. However, we believe inflation is being well managed, and the expected rate cuts, coupled with a likely yet unprecedented third term of this popular government should provide a sustainable boost to markets after that,” Aniruddh Madhusudan of Haitong Securities said.The analyst draws parallel from the 2019 Lok Sabha election where the BJP remained in power as expected, though with a much stronger showing than predicted."Markets remained elevated post the elections, but then quickly dropped to pre-election levels before soaring once again. We would use this particular instance to guide us as the macro scenario retains many of the same characteristics. A proven incumbent, the likelihood of a declining interest rate environment, and the country coming off the drought effects of an El Nino," Madhusudan said.Which stocks to buy?Citing the structural growth opportunity in Indian equities, JPMorgan has told clients to make use of any dips during the election cycle. "Long-term investors could be at least ‘neutral’ relative to the benchmark, and a strategic ‘overweight’ is warranted in our view," the brokerage has said.Going by promises made in BJP's election manifesto, brokerages see opportunities in railways, defence, auto, pharma, affordable housing and hotels.Stocks that have been listed as potential beneficiaries by various brokerages include HUDCO, Tata Steel, JSW Steel, SAIL, UltraTech, Ambuja Cements, Titagarh, Texmaco, Tata Motors, M&M, Olectra, JBM Auto, Ashok Leyland, Motherson, Sona BLW, GRSE, Mazagon Dock, L&T, Bharat Dynamics and HAL.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Categories: Business News

Israel attacks Iran on Khamenei's birthday

April 19, 2024 - 9:52am
Categories: Business News

Fight to protect our democracy begins: Kharge

April 19, 2024 - 9:36am
Categories: Business News

Q4 results today: Wipro, Jio Financial among 15 companies to announce earnings

April 19, 2024 - 8:47am
The fourth quarter earnings season is underway and it has been a mixed one for the IT sector. While TCS’ fourth-quarter numbers were better than expectations, Infosys missed estimates on revenue and FY25 guidance.On Friday, as many as 15 companies will announce their quarterly numbers with some of the major ones in the mix, including Wirpo, Jio Financial, and HDFC AMC among others.Other companies which will declare the results are Hindustan Zinc, Elecon Engineering, Benares Hotels, VL-E Governance, Rajnish Wellness, Amal, Sejal Glass, Roselabs Finance and others.Wipro Q4 expectationsWipro earnings for the March quarter are set to be another forgettable one for Dalal Street as the weak demand environment continues to weigh on growth.The company’s consolidated revenue for the reporting quarter is expected to be flat sequentially and decline 4.3% year-on-year (YoY) to Rs 22,185 crore, according to the average of estimates given by 10 brokerage firms.Consolidated net profit, though, is likely to rise by nearly 4% sequentially, but decline a sharp 9% YoY to Rs 2,799 crore, the estimates showed.But more than the earnings, the Street will be all eyes and ears on the new MD and CEO Srini Pallia, seeking to hear about the planned strategy to bring Wipro back on the growth track in the current financial year. Read full preview hereHindustan Zinc Q4 expectationsHindustan Zinc is likely to see a sharp drop in its fourth-quarter earnings growth as net sales could fall around 11%. Meanwhile, net profit for the quarter may also dip 22% year-on-year."We expect zinc, silver and lead sales to increase by 3.9%, 3.8% and 0.1%, respectively year-on-year. We expect EBITDA to remain flat quarter-on-quarter with higher metal sales almost entirely offset by lower zinc prices," Kotak Equities.All eyes will be on the guidance on CoP, volumes, and realizations. Further, investors may also keep a close watch on guidance on future dividend payout.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Categories: Business News

Big movers on D-Street: What should investors do with Infosys, Just Dial and Tata Motors?

April 19, 2024 - 7:51am
Equity markets continued their downtrend for the fourth straight day on Thursday amid concerns over fading rate cut hopes and conflict in the middle east.Stocks that were in focus included names like Infosys, which rose 1%, Just Dial, which rose 14%, and Tata Motors, whose shares declined 1.54% on Thursday.Here's what Riyank Arora, Technical Analyst at Mehta Equities, recommends investors should do with these stocks when the market resumes trading today.Infosys (Sell)The stock has broken down below its major support level of 1468.00 on daily charts, with volumes nearly three times its 30-day average. With the stock experiencing significant selling pressure, it is expected to head lower towards 1350 eventually. A stop-loss for short positions can be placed near the 1450 mark to manage risk effectively.Just Dial (Buy)The stock has broken out above its recent resistance level of 1004.00 on its daily time frame charts. With volume picking up and the RSI (14) on daily charts nearing 73, the overall momentum looks strong, and the stock appears poised for an up-move towards 1100 and 1125. A strict stop-loss should be placed near the 960 mark to manage risk effectively.Tata Motors (Sell)The stock has broken down below its important support level of 978.50 on its daily charts, indicating overall weakness. With the stock breaching this crucial support, it is likely to head lower towards 940 and 920 as selling pressure persists. A strict stop-loss should be placed near the 1000 mark to manage risk effectively.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Categories: Business News

Read top tech and startup stories of the day

April 19, 2024 - 7:00am
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Dinesh Tripathi appointed as next Navy chief

April 19, 2024 - 6:35am
Categories: Business News

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