Domestic markets are expected to sustain the gains on Thursday. If the Nifty manages to end positive, it will be one of the best months, said analysts. The Nifty has gained over 1,400 points so far this series. Gift Nifty at 23810 signals a weak opening, as Nifty June futures closed at 23,862 and July futures at 23,972.50.
Today, the settlement week for Nifty derivative contacts, analysts see volatility rise at individual stock levels.
However, experts said undertone remain bullish with market leader Reliance participating in the rally. Meanwhile, Crisil has estimated that the revenue of private defence companies is set to grow by 20% during the curren financial year 2024-25 to approximately Rs 13,500 Cr on the back of higher government spending and more incentives to the private defence companies.
Ruchit Jain, Lead Research, 5paisa.comsaid while the private sector banks continued the momentum, heavyweights such as Reliance Industries also witnessed a breakout from consolidation, adding fuel to the rally. “FIIs have been on the long side in last couple of weeks with ‘Long Short Ratio’ in the index futures segment being above 60 per cent now. While the Client section has formed some short positions, it would be crucial to see how much of these positions by both get rolled over to the July series. As of now, with no signs of trend reversal, traders are advised to continue to trade with a positive bias and trail stop losses higher on existing long positions.”
Siddhartha Khemka, Senior Group VP, Head – Research, Broking & Distribution, Motilal Oswal Financial Services Ltd, Nifty continued its upward trajectory, making a new high of 23889 for the second consecutive day and gradually inching upwards to the 24k mark. The index opened flat but soon gained momentum amid renewed buying interest in heavyweight stocks and ended the session with gains of 147 points (0.6%) at 23,869 levels. Telecom, cement, oil & gas, and banking sectors have led the gains today. Telecom stocks saw significant gains on expectations of tariff hikes, while Cement stocks witnessed renewed buying interest today, driven by expectation of higher government spending on road construction. Sentiment for banking and financials has improved after the lower current account deficit numbers were released yesterday. Overall optimism surrounding the Union Budget, increasing FII inflows, and robust domestic economic data contributed towards the positive movement in the market. We expect the ongoing uptrend to continue further.
Auctions
Analysts also see positives from the spectrum auction.
Ankit Jain, Vice President and Sector Head – Corporate Ratings, ICRA Limited, “The spectrum auction results have largely been in line with ICRA’s estimates and have fetched the exchequer around ₹11,340 crore, which translates into annual payout of around ₹1,100 crore for a period of 20 years at 8.65 per cent rate of interest for the telcos. “The participation in this spectrum auction was largely driven by the renewals of the expiring spectrum in the 900 MHz and 1800 MHz bands, coupled with some purchases in the 2100 MHz and 2500 MHz bands to strengthen the network. Apart from these, there was no activity in other bands, he further said.
Overall, in all the spectrum auctions concluded to date, the industry has purchased spectrum worth more than ₹5.6 lakh crore, which has resulted in a deferred liability of around ₹4 lakh crore on the books of telcos as of March 31, 2024 (including AGR-related liabilities).
“At these muted participation levels, no material adverse impact on the balance sheet of the industry is expected. The debt levels which stood at ₹6.4 lakh crore as on March 31, 2024 are expected to moderate to around ₹6.2-6.3 lakh crore as on March 31, 2025, despite the addition of the deferred liabilities, given the expected improvement in profit generation . Further, the total annual payments towards deferred spectrum liabilities for the industry, including this spectrum auction, will be around ₹17,000 crore for FY2025, followed by more than ₹45,000 crore annually thereafter,” Jain further said.
Equities across the Asia-Pacific region are down in an early deal on Thursday.