Trade Setup: Nifty Rockets To Two-Month Highs Led by Reliance And Banks, All Eyes On Union Budget

As the Nifty 50 hits a two-month high, the bulls are back in action, led by Reliance Industries, paving the way for an optimistic start to the February F&O series. The index not only recoups January losses but inches closer to the 22,000 mark. Eyes are now on ITC's quarterly results and global market cues as traders speculate on the Nifty's next move.

The Nifty 50 surged to 21,740 on Monday, nearly reclaiming the ground lost during the January series, with the December close standing at 21,778. An impressive recovery has been witnessed since December 14, marked by six instances of the Nifty gaining 1% or more in a single session. Notably, half of these gains can be attributed to the stellar performance of Reliance Industries.

Reliance Industries, the heavyweight on the Nifty index, experienced its best day since September 2020, propelling it to a record high and inching closer to the Rs 20 lakh crore mark in market capitalization. The company's remarkable performance contributed significantly to the Nifty's surge, adding a new layer of optimism to the market sentiment.

After a prolonged period of heavy selling, foreign investors turned the tide, marking a net buy figure in the cash market on Monday. In contrast, domestic investors continued their robust buying spree, further fueling the positive momentum in the market.

Futures and options (F&O) cues provide insights into the market's future trajectory. Nifty 50's February futures added 1.4%, with 1.69 lakh shares in Open Interest, trading at a premium of 117.65 points. Nifty Bank, on the other hand, witnessed a shedding of 6.3% in Open Interest. Notably, no stocks currently reside in the F&O ban list.

Call Side strikes between 21,800 and 22,000 witness increased Open Interest. Put Side open Interest additions observed for strikes between 21,500 and 21,700.

As the market anticipates the Union Budget presentation on February 1, the spotlight is on ITC's quarterly results. The company posted a net profit of Rs 5,572.1 crore. However, EBITDA saw a dip, standing at Rs 6,024.4 crore with a margin contraction of 180 basis points. The company declared a dividend of Rs 6.25 per share, fixing the record date at February 8, 2024.

Bajaj Finance: Net profit at Rs 3,639 crore, up 22.4% YoY, net interest income at Rs 9,293 crore, a 25% increase YoY. Gross NPA at 0.95%, net NPA at 0.37%.

Vodafone Idea: Net loss at Rs 6,985.9 crore, improving from ₹8,737.9 crore, EBITDA at Rs 4,350.4 crore, with an 80 bps margin expansion. Promised financial support of Rs 2,000 crore, but concerns about the ability to continue as a going concern remain.

Piramal Enterprises: Net loss at Rs 2,377 crore, impacted by AIF-related provisions. Disbursements are up 50.5% YoY. NPA improvements: Gross NPA at 2.41%, net NPA at 1.11%.

NTPC revenue is down 4.7%, eyeing a renewable energy capacity target of 60 GW by FY32. Marico's net profit slightly exceeds estimates, with Parachute coconut oil showing 3% volume growth.

Venus Pipes records highest-ever quarterly revenue, doubling net profit. Krsnaa Diagnostics was shortlisted by the Government of Maharashtra for MRI and CT Scan Services.

Newgen Software's wholly-owned subsidiary secures a Rs 97 crore project for digital product development in Singapore. KEC International: Wins new orders worth Rs 1,304 crore, bringing year-to-date order intake to Rs 13,000 crore. Orchid Pharma exblifep granted approval by the European Medicines Agency.

Havells India executive committee approves up to $20 million investment in its US subsidiary for new growth opportunities. Mahindra Logistics reports net loss of Rs 16.4 crore, revenue up 5.1%, EBITDA down 17.1%. Petronet LNG reports impressive sequential growth with net profit up 46.1%, and EBITDA margin expansion.

While Asian markets, except for Hong Kong, opened higher on Tuesday, global cues remain mixed. Japan's Nikkei 225 is up 0.3%, and South Korea's Kospi rose 0.8%. In the US, markets ended higher with the S&P 500 surpassing 4,900 for the first time. The Dow Jones gained 0.6%, and the Nasdaq rose 1.1% ahead of key tech company earnings and the Fed rate decision.

The GIFT Nifty, trading at a premium of over 100 points from Nifty Futures on Monday's close, signals a promising gap-up start for the Indian market. Investors will be closely monitoring global developments and earnings reports, anticipating their impact on market dynamics.