Trade Setup: Nifty's 3-Day Rally Sparks Wealth Surge, Domestic Investors Buck Trend

Over the past three trading days, the Nifty has showcased unwavering strength, surging by more than 400 points, which translated to a remarkable Rs 8 lakh crore increase in investor wealth. In a show of remarkable resilience, the index broke through key resistance levels, securing a closing above 19,400 for the first time in weeks. The surge demonstrates the robustness of the Indian stock market, with domestic investors remaining undeterred in their buying even as foreign investors continued to exit the cash market.

As the final week of Samvat 2079 unfolds, the Nifty 50 index has posted a significant gain of over 9%, marking an impressive turnaround from earlier uncertainties in the market.

Notably, a 900-point rally across just three sessions has effectively steered the Nifty Bank back into the positive territory for 2023. The banking index attained its highest closing level since October 20, with an overall 1% gain for the year.

Examining the futures and options (F&O) market, it is evident that Nifty 50's November futures shed 1.9% or 2.12 lakh shares in open interest on Monday. However, they are currently trading at a premium of 74.75 points, an increase from the earlier 73 points. On the other hand, Nifty Bank's November futures demonstrated resilience by adding 2.8% and attracting 67,665 shares in open interest. Nifty 50's Put-Call Ratio has increased to 1.14, up from 0.96 earlier.

Remarkably, GNFC remains the sole stock in the F&O ban period.

In the options market, the Call side for the November 9 expiry of Nifty 50 shows the 19,200 and 19,300 strike prices experiencing a decline in open interest, while the 19,450 strike records an increase. On the Put side, the 19,300 and 19,400 strike prices are registering growth in open interest, with the 18,800 strikes Put also seeing a rise.

As we look ahead to Tuesday's trading session, several stocks are poised to make headlines:
Bajaj Finance has launched a Qualified Institutional Placement (QIP) aiming to raise Rs 8,800 crore. The indicative floor price of Rs 7,250 represents a 4.1% discount to Monday's closing price, while the SEBI floor price of Rs 7,533.8 stands at a 3.8% discount to Monday's closing figure. The company recently secured nearly Rs 1,200 crore through the allotment of warrants to Bajaj Finserv.

Cipla has approved the transfer of its generics business to a wholly-owned subsidiary, Cipla Pharma & Life Sciences, for Rs 350 crore. This segment, constituting 9.95% of Cipla's standalone sales, is anticipated to grow rapidly in the generic market. The transfer is expected to boost investments in new launches, expand reach in tier 2-6 towns, and enhance patient access to high-quality generic medicines.

Nykaa has reported an impressive 41.5% increase in net profit for the September quarter, primarily driven by other income components exceeding Rs 8 crore. The company's revenue also grew by 22.4% year-on-year, accompanied by a remarkable 32.1% surge in operating profit (EBITDA). Nykaa's EBITDA margin for the quarter reached 5.4%, a notable improvement from 5% the previous year.

Gland Pharma posted revenue figures slightly better than estimates, boosted by the acquisition of Cenexi. Their US-based revenues showed growth both year-on-year and sequentially, with the EBITDA margin at 23.6%, surpassing last year's 24%. The US segment contributed 54% to the company's overall sales and Gland Pharma expects to launch 63 new products, including relaunches in the US in the financial year 2024.

Sobha reported a 22.4% drop in net profit to Rs 14.9 crore, despite a 10.6% increase in revenue, which reached Rs 741.2 crore. Nevertheless, the operating profit (EBITDA) decreased by 20.5% to Rs 75.4 crore, resulting in an EBITDA margin of 10.2%, down from 14.2% the previous year.

Paras Defence recorded an 11% increase in revenue compared to the previous year, and the EBITDA margin improved by 30 basis points to 25.4% from 25.1% in the same period last year, and a notable increase from 22.2% in the June quarter. The company has set a revenue growth target of 30-40% for the financial year 2024, with an expected EBITDA margin between 28% and 30%.

Across the Asia-Pacific region, markets opened on a lower note in anticipation of trade data from China and the Reserve Bank of Australia's interest rate decision. The Nikkei 225 dropped by 0.5% in the first trading hour, while the Topix was down 0.4%. South Korea's Kospi erased all of its gains from Monday, suffering a 1.7% decline. This reversal followed the country's re-implementation of a ban on short-selling. Futures on the Hang Seng also signalled a negative start to the trading day.

Back home in India, the GIFT Nifty is trading with minor cuts compared to Nifty Futures' closing rates on Monday, indicating a slightly lower start for the Indian market.

In contrast, all three major indices on Wall Street managed to eke out narrow gains on Monday, initiating the week on a cautious note. The Nasdaq registered its longest gaining streak since January, concluding 0.3% higher. The S&P 500 gained 0.2%, while the Dow added 30 points, continuing to demonstrate resilience and stability in the global financial landscape.