Diwali Muhurat Trading: Sensex, Nifty to open on subdued note; RIL, HUL, ICICI Bank shares eyed

The Indian share market is expected to open flat to lower during the one hour special Muhurat trading session for Diwali 2022 (Samvat 2079), tracking mixed cues from global peers. Shares in the Asia-Pacific region ended mixed on Monday, with Hong Kong and China falling sharply, undermining strong finish on Wall Street on Friday. Among individual stocks, shares of Reliance Industries, Hindustan Unilever, DLF, as well as private lenders – ICICI Bank, YES Bank, Kotak Mahindra Bank – will in focus as they released their September quarter earnings post market hours on Friday.   

The equity benchmark indices, the BSE Sensex and the NSE Nifty, will open for one hour from 6:15 pm to 7:15 pm for Muhurat trading session. The pre-open session will begin at 6:00 pm and last till 6:08 pm. As per the notice by BSE and NSE, there will be no regular trading in the equity and equity derivative segment on Monday. Similarly, there will be no action in commodity derivatives segment during regular trading hours today, except for Muhurat session from 6:15 pm to 7:15 pm.

On penultimate session of Muhurat Trading 2022, Indian equities ended higher for the sixth straight session as strong corporate earnings boosted market sentiments, while growing concerns about Ukraine crisis and aggressive rate hikes from central banks on global economic growth limited upmove. In the range-bound trade, the S&P BSE Sensex ended 104 points higher at 59,307 levels, while the broader Nifty50 settled at 17,576, up 12 points. The top gains in benchmark indices were Axis Bank, HUL, ICICI Bank, Kotak Bank, SBI Life, and Apollo Hospitals. On the losing side, Bajaj Finserv, Bajaj Finance, Divis Labs, Adan Ports, UPL, Asian Paints, and L&T topped the chart. Bucking the trend, the broader market ended lower, with the BSE MidCap and SmallCap indices falling 0.75% and 0.6%, respectively.

Top stocks to watch

Reliance Industries (RIL): Billionaire Mukesh Ambani-led oil-to-telecom major has reported consolidated profit at ₹13,656 crore in Q2 FY23, against ₹13,680 crore in the corresponding period last year. Revenue climbed 33.7% to ₹2.32 lakh crore, led by strong growth across telecom, retail, and oil-to-chemical businesses.

Hindustan Unilever Lts (HUL): The FMCG major has reported 19.6% year-on-year growth in profit at ₹2,616 crore for the second quarter ended September 2022. Revenue increased 15.9% YoY to ₹14,751 crore in Q2 FY23, while EBITDA climbed 7.8% to ₹3,377 crore. The company also declared an interim dividend of ₹17 per share for FY23.

JSW Steel: The JSW Group company has posted consolidated loss of ₹915 crore for Q2 FY23, against ₹7,179 crore in the same period last year, dented by weak operating performance and fall in other income. Revenue rose 28.5% YoY to ₹41,778 crore, while EBITDA dropped 83% to ₹1,752 crore compared to year-ago period.

DLF: The real estate major registered a 26% year-on-year growth in profit at ₹477 crore for the quarter ended September 2022 (Q2 FY23). Revenue dipped 12% YoY to ₹1,302.3 crore and EBITDA declined 4.7% ₹436.7 crore as compared to same period last year.

YES Bank: The private lender posted 32% YoY decline in profit at ₹153 crore, dented by more than 50% growth in provisions for bad loans. Net interest income stood at ₹1,991 crore up 32% YoY, with net interest margin improving by 40 bps YoY to 2.6%.

ICICI Bank: The country's second largest private sector lender saw its profit growing by 37% YoY growth in profit at ₹7,558 crore, supported by fall in bad loan provisions. Net interest income climbed 26.5% YoY to ₹14,787 crore, with net interest margin expanding by 30 bps on yearly basis.

Kotak Mahindra Bank: The private sector bank reported 27% YoY rise in profit at ₹2,581 crore for Q2 FY23, while net interest income grew 27% YoY to ₹5,099 crore.

What is Muhurat Trading?

Muhurat Trading is a common ritual followed by traders in India as it is considered as the auspicious time to begin something new or make good investments. As per the Hindu mythology, Muhurat commemorates the start of a new ‘Vikram Samvat, which is followed by business communities such as Marwari and Gujarati to open their account books. Most Hindu investors take blessings of Goddess Laxmi by worshiping their books of account on eve of Diwali and start new account books for the next business cycle.

How market performed in Samvat 2078

Historical data shows that Samvat 2078 was the worst year for Indian markets in the last seven years, with the benchmark indices – Sensex and Nifty – falling nearly 3% in the past one year. In the year before (Samvat 2077), the 30-share Sensex notched a near-decade-high gain of 38% and Nifty rallied 40%.

In Samvat 2078, the NSE Nifty and the BSE Sensex crossed the 18,000 and 60,000 marks, respectively, multiple times but due to uncertain global cues and continued profit booking at higher levels from foreign institutional investors (FIIs), it failed to sustain above the same. After a roller-coaster price action, the Nifty and Sensex are currently hovering around the 200-day SMA (Simple Moving Average) at 17,500 and 59,000 levels, respectively.

In the last 1 year (till October 21), the BSE benchmark Sensex and the broader NSE Nifty delivered a negative return of 2.7% and 3 %, respectively, as the Russia-Ukraine war pushed energy and food prices higher, prompting central banks globally to raise interest rates to combat inflation. However, the domestic benchmarks outperformed the majority of the global indices, with Hong Kong’s Hang Seng index falling by 35%, S&P 500 index losing 24% and Germany’s DAX plummeting 25% during the same period.

In the near-term, the BSE benchmark Sensex is expected to cross the 66,000 marks, while the broader Nifty 50 is projected to hit the 20,000 levels, according to a report by Kotak Securities.