March 26th 2024 Stock Market analysis

Market Snapshot: Sensex Dips 362 Points, Nifty Declines 92 Points, Mid-Caps Lead Amidst 3-Day Rally Halt

The market's three-day winning streak came to an end on March 26 as Nifty hovered around 22,000 amidst notable selling pressure in the Information Technology, Banking, and Media sectors. By close, the Sensex saw a decline of 361.64 points, or 0.5 %, settling at 72,470.30, while the Nifty dipped by 92.10 points, or 0.42 %, closing at 22,004.70. Despite initially trading in the negative territory, the market experienced an intraday recovery supported by buying interest in Oil & Gas, Metal, Capital Goods, and Realty stocks. However, it eventually closed near the day's low due to significant selling pressure in major Media, IT, and Banking stocks. Top gainers on the Nifty included Bajaj Finance, Hindalco Industries, Britannia Industries, Adani Ports, and L&T, while Power Grid Corporation, Eicher Motors, Bharti Airtel, Kotak Mahindra Bank, and Wipro were among the prominent losers. Sector-wise, the Bank and Information Technology indices each witnessed a decline of 0.5 percent, whereas the Capital Goods, Realty, Oil & Gas, and Metal indices recorded gains of 0.5-1 percent. In contrast, the broader indices performed better, with the BSE Midcap index rising by 0.7 percent and the Smallcap index closing flat.

Technical Outlook on 27th March

Nifty is likely to find immediate support around 21,942 followed by 21,880, with resistances anticipated at 22,066 and 22,128. Presently, Nifty appears poised for a swing trade. Similarly, Bank Nifty is expected to encounter immediate support levels near 46,471 and 46,342, while resistances are projected at 46,729 and 46,858. The current outlook for Bank Nifty suggests a potential swing trade opportunity.

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Derivative Outlook on 27th March

PCR Analysis: Nifty PCR-OI has decreased with nifty has negative which shows CALL WRITING.

Open Interest Analysis: Nifty future March contract OI has decreased with negative close which shows Long Unwinding.

Cost of Carry Analysis: Nifty MARCH month contract has ended in high compare with APR contract and high range compare with previous session which indicates a high swing trade.

India VIX Analysis: India VIX has closed at 12.82 vs 12.22 (DoD) basis which shows increase in volatility.

IndiGo Shares Soar to Record High as Brokerages Predict Robust Growth and Increase Price Targets

Shares of InterGlobe Aviation, the operator of IndiGo, surged approximately 6 percent to a record high of Rs 3,489.85 during morning trade on March 26, following a series of bullish growth forecasts from several brokerages post its analysts' meet. Brokerage firms such as UBS Securities, Kotak Institutional Equities, and Motilal Oswal Financial Services have expressed strong optimism about IndiGo's growth prospects, attributing it to the airline's expansion plans and the robust growth projections for India's aviation sector. Motilal Oswal Financial Services particularly emphasizes the significant growth potential in the underpenetrated Indian aviation market, foreseeing substantial growth opportunities for domestic players supported by increasing airport infrastructure and aircraft capacity additions. With projections suggesting a robust 15 percent compounded annual growth rate in domestic air travel over FY24-30, brokerages have set price targets ranging from Rs 3,500 to Rs 4,300 for IndiGo, reflecting potential upsides of 7-31 percent from the previous close. UBS Securities, for instance, revised its target price to Rs 4,000, valuing the stock at 11 times its expected FY26 EV/EBITDA. Despite accounting for factors like rising crude prices and pilot salaries, UBS remains bullish on IndiGo's prospects, driven by anticipated improvements in Available Seat Kilometer (ASK) growth and yields. However, the firm also acknowledges potential upside risks to its yield estimates for IndiGo in the short term, as well as to capacity demand growth and profitability in the medium term.