Trade Setup: Market Likely To Open With Gains, As Investors Brace For Union Budget Week

In a tumultuous end to the January Futures and Options (F&O) series, the Nifty 50 index faced a significant setback, shedding 420 points. The month's expiry, coinciding with the last trading day of a truncated week, witnessed the index struggling to maintain levels around and above the crucial 21,500 mark, previously a key support zone.

Despite the challenging end to the series, the Nifty found solace within the 21,250 - 21,150 range, with a series low of 21,137 now acting as a near-term swing low. The index's recent performance has been lacklustre, dropping in three out of the last four weeks and plummeting over 800 points from its recent peak of 22,124.

As the earnings season winds down, all eyes turn towards the upcoming Union Budget, scheduled for presentation in the following week. This budget, a vote on account rather than a full-fledged one, gains significance against the backdrop of imminent general elections.

Foreign investors persisted as net sellers during Thursday's trading session, albeit at a slower pace compared to preceding days. In contrast, domestic investors maintained their status as net buyers.

The Nifty Bank, a major contributor to the Nifty's recent underperformance, faced headwinds due to the sell-off in heavyweight constituents like HDFC Bank and Axis Bank. Closing below the 45,000 mark for the first time since November, the Nifty Bank endured its fourth consecutive weekly decline, losing nearly 4,000 points from its peak of 48,636.

As the January F&O series concluded, the Nifty 50 witnessed rollovers of 77%, with futures adding 5.3% in Open Interest on expiry day. In contrast, the Nifty Bank recorded rollovers of 81%, with futures witnessing a substantial 30.6% increase in Open Interest on expiry day. The Nifty 50's Put-Call Ratio, a crucial indicator, rose to 1.03 from 0.92. Zee Entertainment emerged from the F&O ban at the beginning of the new series.

Looking ahead to the first weekly expiry of the February series on Union Budget day, the Nifty 50's call strikes between 21,400 - 21,600 experienced Open Interest addition. On the put side, strikes between 21,000 and 21,400 witnessed an Open Interest addition for the February 1 expiry.

As investors gear up for Monday's trading session, several stocks will be in focus today:

Piramal Enterprises enters a share purchase agreement to divest its entire 20% equity in Shriram Investment Holdings Pvt Ltd to Shriram Ownership Trust for Rs 1,440 crore. This transaction is set to conclude by March 31, 2024.

Tata Technologies reports positive financials with a 1.6% increase in rupee revenue, an 18.3% EBITDA margin, and a 6.1% rise in net profit. The company secures five large deals in the quarter, signalling robust performance.

Vedanta surpasses expectations as lower costs contribute to an EBITDA beat. With a 4.2% revenue increase, operating profit rising by 21%, and an EBITDA margin now at 24%, Vedanta's performance stands out.

APL Apollo Tubes faces subdued sales volume due to channel destocking but anticipates improvement in subsequent quarters as signs of restocking emerge post domestic steel price correction.

Shriram Finance reports a Net Interest Income of Rs 5,093.9 crore, surpassing market expectations, with disbursements rising by 29.2%. Despite farm equipment AUM growth weakness, the overall AUM growth stands at 20.7%.

Yes Bank witnesses a jump in net profit year-on-year as provisions drop. Asset quality remains stable, with recoveries and upgrades exceeding Rs 1,300 crore.

Zen Technologies achieves remarkable growth with December quarter revenue tripling from the previous year and net profit expanding fivefold. The board also greenlights fund-raising initiatives of up to Rs 1,000 crore via QIP or other methods.

Sanghi Industries reports a widened net loss to Rs 201 crore, attributing it to higher expenses. Despite a 42.4% increase in net sales, losses escalate due to higher finance costs.

Adani Power records an impressive 67.3% surge in revenue, attaining an EBITDA margin of 35.8%. Sales volume experiences a substantial 82% year-on-year increase.

Indiabulls Housing Finance announces plans to raise Rs 3,693.4 crore through a rights issue. The issue, opening on February 7, 2024, and closing on February 13, 2024, offers shareholders one rights equity share for every two fully-paid up shares held.

HDFC Bank receives RBI approval for LIC to increase its stake to up to 9.99%, a move signalling confidence in the banking giant.

Laurus Labs ventures into a Joint Venture agreement with KRKA, Slovenia, where KRKA secures a 51% stake. The JV, with a registered capital of Rs 450 crore or €50 million, aims to facilitate the production of finished products for new markets, including India.

Coal India emerges successfully as the bidder for a 300 MW capacity project in Gujarat, signifying expansion into the renewable energy sector.

Jubilant Pharmova announces the sale of its entire 25.8% stake in Sofie Biosciences, USA, for $139.43 million. The proceeds will be utilized for capex, reducing leverage, and other corporate purposes.

Capri Global approves the issuance of bonus shares in the ratio of 1:1 and a split of equity shares in the ratio of 1:2, signalling positive developments for shareholders.

Bharat Bijlee sets the stage for potential changes as the board is scheduled to meet on February 14 to consider a stock split.

Asian markets kicked off the new trading week on a positive note, with the Nikkei 225 and Topix surging in Japan. South Korea's Kospi gained, while the Kosdaq declined. Futures on the Hang Seng indicated a positive start.

In the US, markets ended mixed on Friday, with the S&P 500 and Nasdaq snapping six-day winning streaks. Meanwhile, the GIFT Nifty showed a premium of over 100 points from Nifty Futures Thursday close, signalling a gap-up start for the Indian market.

As investors brace for the impact of the Union Budget, the upcoming week promises to be eventful, with GDP and inflation numbers from the Asian region adding to the market dynamic