Mid-day Mood | Market snaps 3-day losing streak as bond yields retreat, volatility eases 3%

The benchmark Sensex and Nifty indices continued to trade in green around mid-day on April 18, led by gains in PSU banks, metals, and realty stocks. The indices snapped a three-day losing streak after the US bond yields retreated marginally overnight, spurring risk-on sentiment. As a result, India VIX, which measures near-term volatility in the domestic market, cooled off by 3 percent around noon.

The Sensex was up 358.45 points or 0.49 percent at 73,302.13, and the Nifty was trading 132.00 points or 0.60 percent higher at 22,279.90. The market breadth was in favour of gainers as around 2,332 shares advanced, 847 declined, and 87 traded unchanged.

The broader indices outperformed the benchmarks, with the BSE MidCap and BSE SmallCap surging up to 1 percent each around April 18 noon.

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Sectoral trend

Barring the Nifty FMCG index, all sectoral indices traded in the positive territory. The weakness in the FMCG index was led by losses in Nestle India after an investigation by Public Eye underlined high levels of sugar in infant product Cerelac.

On the flipside, Nifty PSU Bank, Nifty Realty, and Nifty Infrastructure surged over a percent each intraday on April 18.

Fundamental view

Since the US 10-year bond yield is hovering around 4.57 percent, more FII selling is likely, putting pressure on large-caps, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. This, he believes, will provide opportunities to investors to slowly accumulate high quality largecaps where the margin of safety is high.

"In the near-term, however, heightened activity is likely in mid and smallcaps, particularly in stocks where floating stocks are low. This is a risky area," Vijayakumar added.

Technical view

The technical setup construes inherent weakness and brings the 22,000 mark in the vicinity of the bears, opines Sameet Chavan, Head Research, Technical and Derivative - Angel One.

"For now, a decisive breach below the 50-DEMA could further disrupt the chart structure, and 22,000, followed by the previous swing closure around 21,800, is to be seen as the last hope for the bulls' comeback. On the flip side, 22,350 (20-DEMA) is likely to act as an intermediate hurdle, followed by the bearish gap of 22,430-22,500 in the comparable period," he added.

ICICI Lombard: Shares of this private life insurer surged over 4 percent to Rs 1,727 per share on April 18 following the release of its fourth-quarter financial results for FY24, which were in-line with expectations. Its net profit rose by 19 percent on-year to Rs 519.5 crore, led by healthy premium growth and investment income.

Angel One: Shares of Angel One gained over 7 percent on April 18, a day after the company reported a 27.3 percent on-year (YoY) growth in net profit at Rs 340 crore for the quarter ended March 31, 2024.

Nestle India: Shares of this FMCG major tumbled nearly 4 percent on April 18, registering its worst fall in three years after a report by Public Eye called out the FMCG major for adding sugar and honey to its best-selling infant milk and cereal products in developing countries like India but not in European markets.

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