February 29th 2024 Stock Market analysis

Market Resilient Amid High Volatility: Nifty Surges 3% in February Expiry

Amidst a highly volatile trading session on February's F&O expiry day, the Indian benchmarks ended marginal gains, with the Nifty closing near the 22,000 mark. Over the February expiry period, the Nifty50 index saw a three percent increase, while both the Sensex and Nifty added one percent each for the entire month of February.

The NSE Nifty ended the day at 21,982.80, marking a modest gain of 0.14%, while the Nifty Bank closed higher at 46,120.90, up by 0.34%. Meanwhile, the BSE Sensex concluded the session at 72,500.30, recording an increase of 0.27%.

Adani Enterprises led Thursday's gainers, with shares rising by 2%, followed by Tata Consumer Products and IndusInd Bank. On the flip side, Apollo Hospitals Enterprise, Bajaj Auto, and LTI Mindtree were the top performers.

Technical Outlook on 1st March

Nifty is anticipated to find immediate support levels around 21,883 and then 21,784, with resistances expected at 22,082 and subsequently at 22,181. Currently, Nifty shows signs of a mild recovery.

For Bank Nifty, immediate support levels are foreseen near 45,787 and then 45,454, while resistances are projected at 46,453 and 46,786. Bank Nifty is currently showing indications of a mild recovery.

Derivative Outlook on 1st March

PCR Analysis: Nifty PCR-OI has increased with nifty has positive close which shows PUT WRITING.

Open Interest Analysis: Nifty future March contract OI has increased with positive close which shows Long Buildup.

Cost of Carry Analysis: Nifty MARCH month contract has ended in high compare with APRIL contract and high range compare with previous session which indicates a mild recovery.

India VIX Analysis: India VIX has closed at 15.57 vs 16.33 (DoD) basis which shows decrease in volatility.

‍Gujarat Gas Surges 2% Following UBS Upgrade to 'Neutral' with Target Price Raised to Rs 610

UBS upgraded Gujarat Gas to a 'neutral' rating due to its improved outlook on volumes and margins, subsequently raising the target price to Rs 610. At 3.30 pm on February 29, the shares were trading at Rs 565.70 apiece on the NSE, up 3.17% from the previous session's close. With spot LNG prices softening, Gujarat Gas's prospects for volumes and margins have improved. UBS raised its volume estimates for FY25-26 by 9 percent and gross margins by 4-8 percent, expecting an EBITDA growth of around 19-24 percent year-on-year. Despite a nearly 20 percent rally this year, UBS believes the enhanced near-term outlook is now materializing. Further, a potential decline in spot LNG prices to 2019-20 levels ($5.0/mmbtu) could bolster earnings. In contrast, Jefferies maintains an 'underperform' rating on the share with a price target of Rs 470, indicating an 18 percent downside from the last close of Rs 581. Jefferies analysts noted that volumes were affected by a continued market share loss in Gujarat's Morbi region, and the current pricing strategy suggests a focus on margin defense rather than regaining lost market share in Morbi. In the third quarter, Gujarat Gas reported a consolidated net profit of Rs 221 crore compared to Rs 371 crore the previous year, while its revenue from operations increased approximately 7 percent to Rs 4,084 crore from Rs 3,821 crore a year earlier.