Sensex, Nifty flat after hitting record highs, consolidation likely ahead of Q4 results

The Sensex and the Nifty ended flat on April 9 after hitting record highs earlier in the day on profit booking in heavyweights such as Titan, Reliance Industries, Asian Paints and TCS.

The Sensex was down 58.80 points or 0.08 percent at 74,683.70, and the Nifty was down 24.50 points or 0.11 percent at 22,641.80. The market breadth was in the favour of losers as around — 1,441 shares advanced, 2,263 shares declined, and 99 shares unchanged.

Experts expect the market to consolidate as the earnings season begins for India Inc later in the week.

The focus will shift to earnings delivery as stock prices factor reasonable earnings season expectations, said Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS.

"We expect markets to take a pause or consolidate before taking a direction based on the earnings in the next 20 days," he said.

If the earnings season disappoints, the market will correct. If upgrades outnumber downgrades, the market will continue to move upwards, Kulkarni said.

On the other hand, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services believes that this pattern of 'higher highs and higher lows' is a distinct bullish signal and this has been a standout pattern in the Indian market this year.

However, he pointed out that in this richly valued market, there is valuation comfort in largecap banking stocks. "We expect Q4 results of the banking majors to be very good. Sectors like capital goods, autos, cement and hospitality are also likely to remain resilient," he noted.

Broader markets, too, erased earlier gains and slipped in red on April 9. The BSE Smallcap and BSE Midcap indices declined up to 0.4 percent. India VIX, which measures near-term volatility eased by over 2 percent to settle around 11.3.

Sectorally, Nifty Metal index was the performer led by gains in Tata Steel, Hindustan Zinc, Hindalco, and Vedanta. The positive movement comes amid firming up of commodity prices and revival in global manufacturing activity data.

Last week, the US saw its manufacturing sector growing for the first time in 18 months. Similarly, China's manufacturing activity expanded in March for the first time since September, indicating economic stabilisation in the world's second-largest economy.

Additionally, Nifty Realty index also fared well driven by gains in Godrej Properties. Godrej Properties clocked the highest-ever quarterly sales in Q4FY24, registering 135 percent year-on-year (YoY) growth.

On the flipside, Nifty PSU Bank and Nifty FMCG indices were the top sectoral underperformers on April 9.

From an investment standpoint, market experts suggested to buy-every-dip as India Inc begins its fourth quarter corporate earnings season. TCS will kick off earnings season on April 12, followed by Bajaj Auto, HDFC Life, and Infosys on April 18.

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