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Market Update

Nifty : 23,658.35 +307.95 (+1.32%) Sensex : 77,984.38 +1078.87 (+1.40%)

* Equity benchmarks Sensex and Nifty rose for six consecutive trading sessions, with the Sensex surging nearly 1,100 points to close nearly 78,000 mark, while Nifty ended above the 23,600 level. This rally was driven by gains in banking, realty, defense, and IT stocks, fueled by a positive sentiment from foreign capital inflows, a three-month low in USDINR at 85.63, and bargain hunting. The market saw broad-based buying as foreign institutional investors (FIIs) turned into net buyers of domestic equities in recent sessions.

* The rally was also supported by a 1% rise in US Index futures, following comments from the US President hinting at flexibility on reciprocal tariffs. Additionally, there are expectations that the RBI may cut interest rates next month, given inflation has cooled to a 7-month low of 3.61%, alongside a global market rally. The Indian rupee strengthened by 33 paise to 85.85 against the US dollar today, supported by robust domestic inflows.

* Despite global uncertainties, the weaker dollar boosted investor sentiment. Moreover the HSBC Composite PMI has remained above the 58 mark for the second consecutive month, with the Manufacturing PMI staying above 57, signaling strong growth in the domestic economy.

* The Sensex rose 1.4%, or 1,078 points, closing at 77,984, while Nifty advanced 1.3%, or 307 points, to a two-month high of 23,658. Defense stocks saw the most significant gains, with the Nifty Defense Index climbing 3.4%, led by MTAR Tech (up 75 points), Bharat Dynamics, Hindustan Aeronautics, and Zensar Tech. The rally in defense stocks followed news that the government approved a capital acquisition plan for military hardware worth over Rs 54,000 crore.

* PSU bank stocks also saw strong gains, with the Nifty PSU Bank Index rising 3%, driven by SBI, Bank of Baroda, Union Bank, and Canara Bank. The rally in PSU banks was supported by a favorable risk-reward ratio, attractive valuations, and expectations of an RBI rate cut.

Technical Outlook:

* Nifty Index opened with a gap-up of over 150 points above the 23500 zone and witnessed a dip towards 23430 in the first half an hour of the session. Post that, the index inched up slowly and steadily, with sustained buying observed throughout the day, as every small decline was being bought into. Nifty made a high of 23708 and closed with gains of over 300 points near 23650 zone.

* Interestingly, the index has been following a similar pattern over the last 4-5 sessions—opening with a gap-up, experiencing a small dip and then witnessing buying throughout the day and this indicates the dominance and strength of the bulls in the market. It formed a bullish candle on the daily chart and trading well above its all short term moving averages. Now it has to hold above 23500 zones for an up move towards 23800 then 24000 zones while supports are shifting higher at 23500 then 23333 zones.

Derivative Outlook:

* Nifty future closed positive with gains of 1.45% at 23720 levels. Positive setup seen in IREDA, PB Fintech, Angel One, HAL, KPIT Tech, RBL Bank, Federal bank, Kotak Bank, Union bank, PFC, HUDCO, Kalyan Jewellers and Dixon Tech while weakness in JSL, Titan, BSE, IndusInd Bank, LTTS, Trent, Zomato, Glenmark, Sonacoms, CG Power, VBL and M&M.

* On option front, Maximum Call OI is at 24000 then 24500 strike while Maximum Put OI is at 23000 then 23500 strike. Call writing is seen at 24200 then 24400 strike while Put writing is seen at 23500 then 23600 strike. Option data suggests a broader trading range in between 23000 to 24000 zones while an immediate range between 23400 to 23800 levels.

* Hindustan Aeronautics to Pay $287M for Settling Tax Dispute – Company will pay Rs2471cr to settle long-standing tax disputes with the Maharashtra government. A highlevel committee recommended an out-of-court settlement for disputed tax liability of Rs10079cr involving HAL’s Nashik division.

* GAIL and GSPL - Regulator proposed tweaks that would impact the calculation of the tariff for transportation of natural gas across the country.

* MSTC to Conduct 40% of Coal India's E-Auction Events – Company said it will handle 40% of Coal India's e-auctions, or 166 events, under its previously announced twoyear contract as an e-auction service provider.

* Kotak Mahindra Bank - The bank’s board approved the appointment of former Amazon veteran Bhavnish Lathia as its chief technology officer

* Power Mech Projects - Company secured a contract worth Rs 579 crore from Bharat Heavy Electricals Ltd. The order is for civil structural and architectural works for the 2x800 MW DVC Koderma (KTPS) Phase-II in Jharkhand.

* Mahindra in talks to buy Sumitomo's stake in SML Isuzu, CNBC Awaaz reports - Company is in talks to buy Japan's Sumitomo Corp's entire 44 per cent stake in heavy vehicle-maker SML Isuzu, CNBC Awaaz reported on Monday, citing sources. Mahindra is considering offering the Japanese trading firm Rs1,400 rupees to Rs1,500 rupees per share, according to the report, which will value SML Isuzu at Rs2026 as per Reuters calculations.

* Mixed bag PMI Data in march - HSBC Composite PMI has stayed above the 58 mark for the second consecutive month. It has reported March PMI data at 58.6 while previous month was 58.8 - After dipping to 57.9 in January. HSBC Service PMI data reported during the month of March at 57.7 while previous month was 59.

Global Market Update

* European Market - European stocks gained in expectation that the next round of Donald Trump’s tariffs may be more measured than anticipated. UK, France and Germany’s DAX rose 1% each after reported better then expected March PMI data.

* Asian Market - Asian equities erased losses, boosted by surge in the region’s heavyweight markets of China and India. Chinese technology firms gave the biggest boosts to benchmark, with Alibaba and Xiaomi among the top contributers. Mainland China and Hong Kong benchmarks rose up to 1%.

* US Data - Manufacturing PMI, Service PMI and Composite PMI.

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