Another day of consolidation on stock markets; Nifty, Sensex end flat

The Indian stock market experienced another day of consolidation on Tuesday, as traders remained cautious ahead of the Federal Reserve's upcoming policy meeting. On Wednesday, the Fed is expected to implement its first rate cut since 2020.

The Nifty 50 ended the session with a 0.14 percent gain at 25,418 points, nearing an all-time high of 25,445 points during the session, with just 27 points away. The Sensex ended with a 0.11 percent gain at 83,079 points, also hitting a new peak.

Among the 50 Nifty constituents, 21 stocks ended in the positive, with Hero MotoCorp leading at 3.1 percent. Other notable gainers included Bajaj Auto, Bharti Airtel, NTPC, Mahindra & Mahindra, Britannia Industries, Kotak Mahindra Bank, and Larsen & Toubro, all rising between 0.8 percent and 3.1 percent. Twelve stocks, including HCL Technologies, Tech Mahindra, ICICI Bank, and Cipla, reached new 52-week highs.

Fed policymakers will begin their two-day meeting on Tuesday, with market sentiment divided on whether they will opt for a quarter-point interest rate cut or take the less common route of a half-point reduction. This decision comes after the emergency rate cut in March 2020 at the onset of the Covid pandemic.

Gas companies rise on UBS upgrade

Shares of city gas distribution companies Mahanagar Gas (MGL) and Indraprastha Gas (IGL) saw gains of up to 6 per cent on Tuesday. This uptick followed a rating upgrade by global brokerage firm UBS, which changed its recommendation for IGL from 'sell' to 'buy' and increased its target price from ₹400 to ₹700. This new target reflects an upside potential of 32.32 per cent from IGL’s previous closing price.

Similarly, UBS has raised its target price for Mahanagar Gas from ₹1,600 to ₹2,400 per share, indicating a potential upside of 32 per cent from the stock's latest closing price. UBS maintained its 'buy' recommendation for MGL.

2-wheeler stocks shine

Auto stocks, particularly those in the two-wheeler segment, ended today’s session with notable gains. Hero MotoCorp rose 3.1 percent to ₹5,951 per share, reaching a new 52-week high of ₹5,984. Bajaj Auto achieved a fresh 52-week high of ₹11,972, closing the day with a 2 percent gain at ₹11,925 per share.

The newly listed OLA Electric has resumed its upward trend, gaining 10 percent to ₹118.3 per share, recovering from a four-day slump. This rebound followed after global brokerage firms BofA Securities and Goldman Sachs initiated coverage on the stock, assigning a ‘buy’ rating. 

BofA Securities set a price target of ₹145, reflecting a 35 percent premium. Goldman Sachs established a higher target of ₹160, indicating a 49 percent premium based on Monday's closing price.

Both firms view OLA Electric favourably due to its expanding portfolio, access to funding, strong brand, and distribution reach, positioning it well in India's growing electric two-wheeler market.

Bajaj Housing Finance's bull run 

After a remarkable 135 percent gain on its debut, with shares closing at ₹165 each, Bajaj Housing Finance continued its strong performance on Tuesday, hitting the 10 per cent upper circuit limit, reaching ₹181.50 per share.

Today's rally came after the global brokerage Phillip Capital initiated coverage on the stock with a 'buy' rating and set a target price of ₹210 per share. It highlighted BHFL’s strategic focus on the ‘desirable’ ₹50 lakh ticket size, which accounts for approximately 65 per cent of home loan originations in India.

The construction finance segment is expected to remain stable, constituting 8-10 percent of the company's total book. Over the next three years, Bajaj Housing Finance is projected to have a balance sheet exceeding ₹2 lakh crore. In the near term, credit costs are anticipated to remain favourable, it said. 

(By arrangements with livemint.com)