Market rebounds to near budget-day high, but more stocks at lower circuit, 52-week low

The benchmark stock indices rebounded sharply and recouped losses of the previous two days, coming close to the high of the budget day amid consolidation and rangebound trade.

While the gains indicated that the bulls may be gradually turning strong, the breadth was not in their favour on February 14.

The Nifty50 rose 159 points to 17,930, and the BSE Sensex jumped 600 points to 61,032, but the BSE Midcap and Smallcap indices were down four-tenth of a percent and six-tenth of a percent respectively amid weak breadth. More than 2,200 shares declined against 1,296 that advanced on the BSE.

About 220 stocks hit the lower circuit against 132 stocks at the upper circuit, all of them from ‘B’ and lower groups on the BSE. They included Liberty Shoes, Mcleod Russel, Zee Learn, Axiscades Technologies, NDTV, Siti Network, Eros Media, PC Jeweller, GG Engineering, Goldstone Technologies, and Loyal Equipments.

The 52-week high-low ratio tilted in favour of the bears with 197 stocks hitting a 52-week low against 84 stocks at a 52-week high.

Stocks at a 52-week low

Stocks at a 52-week low were from the A to Z groups, though sentiment at the benchmark level looked good. They included Aditya Birla Sun Life AMC, Adani Green Energy, Adani Transmission, Alembic Pharma, Adani Total Gas, BASF India, Barbeque-Nation Hospitality, Borosil Renewables, Dollar Industries, EKI Energy Services, Gati, Graphite India, and GRM Overseas.

Indiabulls Real Estate, Indigo Paints, Ipca Laboratories, Mahindra Logistics, Manali Petrochemicals, Olectra Greentech, OnMobile, Paras Defence, Polyplex Corporation, Rossari Biotech, SpiceJet, Sunteck Realty, Thyrocare Technologies, Varroc Engineering, Venky’s, and Wockhardt also touched a 52-week low.

In the case of frontline stocks, 18 stocks on the BSE Sensex advanced against 12 that declined. ITC was the leader with a 3.3 percent rally, followed by Reliance Industries (up 2.35 percent), HCL Technologies, Bajaj Finance, ICICI Bank, Infosys, Tech Mahindra, Mahindra & Mahindra, Axis Bank, Wipro and Bharti Airtel.

Technology, FMCG, banking & financial services, energy, and metal stocks led the rally. However, selling in power, select capital goods and auto stocks restricted the gains.

There was no major jump in investor wealth, possibly because only select large-cap stocks rallied. More than Rs 24,000 crore of investor wealth was added as the BSE’s market capitalisation increased to Rs 266 lakh crore at the time of writing this article from Rs 265.76 lakh crore.

Considering the current consolidation, the market seems to be waiting for major positive triggers to get out of rangebound trade, experts said.

“Most of the negatives such as geopolitical tension, a weaker currency, inflation, higher crude prices, and uncertainty of the Fed interest rate trajectory, which impacted the market in 2022 are priced in and now that the market is entering the last leg of the interest rate hike cycle, we may witness consolidation in the first half of FY24,” said Anil Rego, founder of Right Horizons.

In the second half of FY24, “on account of pent-up demand and normalisation of margins, we will see earnings growth kicking in, which can act as a trigger for a new leg of a rally for the market,” he said.

Foreign institutional investors were net buyers in the past two trading sessions, which may have also supported the rally in the benchmark indices.

FIIs net bought more than Rs 2,700 crore worth of shares in the past two days, though they remained net sellers to the tune of over Rs 4,000 crore in the current month.

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