Sensex Gain 187 Points, Nifty at 24,167; Tomorrow Nifty Prediction

Market Closed with Gains: What to Expect on 23 April 2025

Market Overview – 22 April 2025: The Indian stock market experienced another positive day on 22 April, as both the benchmark indices, Nifty 50 and Sensex, continued their upward trajectory for the sixth consecutive trading session.

Despite a relatively flat day in terms of trading volume, the market saw strong participation from small and mid-cap stocks, signaling continued investor optimism.

One of the most notable achievements of the day was HDFC Bank’s milestone of reaching a market capitalization of Rs 15 lakh crore, making it the third Indian company to ever attain this feat.

Key Highlights from Today’s Trading Session:

• HDFC Bank Achieves Major Milestone: HDFC Bank’s achievement of Rs 15 lakh crore in market cap was the highlight of the day. It became the third Indian company to cross this milestone, following Reliance Industries and Tata Consultancy Services (TCS). The bank’s shares have seen a steady upward movement, driven by strong quarterly results and growing confidence in its financial strength. This milestone solidifies HDFC Bank’s position as one of the most valuable companies in India and reflects its consistent performance in an ever-evolving financial environment.
• Benchmark Indices Perform Well: The Sensex closed up by 187.09 points, or 0.24%, to end at 79,595.59, while the Nifty 50 gained 41.70 points, or 0.17%, to close at 24,167.25. The performance of the benchmark indices was moderate but positive, driven by gains in key sectors such as banking and FMCG. Despite global uncertainties and mixed signals from foreign markets, the Indian indices showed resilience, buoyed by strong domestic factors.
  • The Nifty Midcap 100 and Nifty Smallcap 100 indices, which track mid-sized and smaller companies, performed even better. Both indices gained about 0.8% during the session, signaling that investor appetite for smaller stocks remains robust, especially those that had previously been beaten down but are now offering value.
• Sectoral Performance:
  • Banking Sector Shines: One of the biggest contributors to the market’s gains was the banking sector, which benefited from the RBI’s recent release of the final liquidity coverage ratio (LCR) guidelines. These new guidelines, considered much softer than the draft version, are expected to improve the liquidity coverage ratio for Indian banks by 600 basis points. This development is expected to bolster investor confidence in the banking sector, as the liquidity buffer for banks will increase, potentially enhancing their lending capabilities and financial stability.
  • FMCG Sector Rally: Another sector that stood out was FMCG (Fast-Moving Consumer Goods). The Nifty FMCG index surged by nearly 2% during today’s session. This was primarily due to a bullish note from Switzerland-based brokerage UBS, which upgraded several FMCG stocks in light of the strong growth potential in the sector for the current financial year. The report highlighted how consumer staples companies are well-positioned to benefit from a steady increase in demand, driven by improving macroeconomic conditions such as lower inflation and rising consumer spending.
• Market Breadth: The market breadth was positive, with 2,389 stocks advancing, 1,453 declining, and 137 remaining unchanged. This broad-based rally, especially in smaller stocks, suggests that investor sentiment remains largely bullish, particularly in the broader market. While large-cap stocks like HDFC Bank, TCS, and Reliance Industries continue to lead the market’s upward momentum, small and mid-cap stocks are showing a resurgence, indicating that more investors are looking for opportunities outside of the top 50 companies.
• IndusInd Bank’s Struggles: On the downside, IndusInd Bank was a notable underperformer, with its stock falling by as much as 6% during the session. The decline came on the back of reports suggesting that the bank’s board had enlisted Ernst & Young (EY) to conduct a second forensic audit. The audit will focus on a significant discrepancy of around Rs 600 crore related to interest income from the bank’s microfinance portfolio. This news led to uncertainty about the bank’s financial health, which triggered a sell-off in its shares.

What to Expect on 23 April 2025:

Given the current market dynamics, here are the key factors and levels to watch out for on 23 April.

• Nifty Support and Resistance Levels:
  • Support Level: The recent swing low of 21,743 is expected to act as a significant support level. As the Nifty has rallied over 2,400 points from this point, it is expected to hold firm at this level in case of a pullback.
  • Resistance Levels: On the upside, immediate resistance can be seen at 24,226, followed by a stronger resistance at 24,546. A breakout above these levels could pave the way for further gains, but it’s essential to monitor these levels closely.
• Market Sentiment and Expert Views:
  • Domestic Fundamentals Remain Strong: Market experts are generally optimistic about India’s market outlook. Devarsh Vakil, Head of Prime Research at HDFC Securities, believes that India’s strong domestic fundamentals will help shield the market from any potential global turmoil, such as issues facing the US market. He expects that small and mid-cap stocks, in particular, will continue to see strong buying interest, as investors continue to seek value in these segments.
  • Global Factors to Watch: While the Indian market appears to be relatively insulated from global risks, Prashant Tapase of Mehta Equities highlights that the ongoing tension between President Trump and Fed Chairman Jerome Powell over rate cuts could have an impact on global investor sentiment. In the event of increased volatility in global markets, India may face some headwinds. However, he remains optimistic that the Indian market will benefit from its own strong fundamentals, including the expectation of a strong fourth-quarter performance for FY 2025 and easing inflationary pressures.
  • Inflation and Macroeconomic Factors: Amar Dev Singh, Senior VP of Research at Angel One, emphasizes that India’s macroeconomic factors, such as a normal monsoon and the softening of inflation, are contributing to the positive sentiment in the market. Moreover, the strong performance of the banking sector, particularly with both private and public sector banks showing strong gains, is a positive sign for the broader economy.

Investment Strategy Moving Forward:

• Cautious Optimism: While the market’s overall momentum appears positive, experts recommend a cautious approach in the near term. Investors should avoid lump-sum investments and instead opt for systematic investment plans (SIPs) or incremental buying. The recent rally in the market, especially in mid and small-cap stocks, may offer opportunities, but it also presents risks. As Ravi Kumar TV, founder of Gaining Ground Investment Services, advises, uncertainty still looms over global factors, and investors should not be overly aggressive at this stage. A gradual, measured approach to investing is likely to be more beneficial.
• Focus on Strong Fundamentals: Investors are also advised to focus on companies with strong fundamentals and sound financials. While market conditions are favorable in the short term, it is crucial to assess individual stocks based on their earnings growth potential, valuation, and risk profile.

Final Thoughts:

As we head into 23 April, the Indian stock market remains in a positive phase, driven by strong performances in sectors like banking and FMCG, and the continuing rally in mid and small-cap stocks.

While there are signs of market overheating in certain areas, the overall market outlook remains favorable, especially given the strong domestic macroeconomic environment and improving sentiment in key sectors.

However, given the volatility of both domestic and global markets, a cautious approach to investing is recommended.

With strong fundamentals supporting the Indian market, investors should focus on maintaining a diversified portfolio, keeping an eye on key resistance and support levels, and avoiding overexposure to any single sector.