Nifty50 Resilient, Overcomes Selling Pressure

At the close, the Nifty 50 was at 18,297.00 down by 0.10%

NSE Nifty 50 commenced with a bullish start, but ultimately saw a decline of 0.10 percent, resulting in a close in the red zone. The index finished below the critical level of 18300.

The Nifty Index acted in accordance with the OI data yesterday, with the 18,300 short straddle nearly becoming worthless as the markets expired close to this level. Looking forward, the trend for the Index over the next two weeks is expected to be sideways with a bullish bias, as indicated by current derivative data which reveals the short straddle for this monthly expiry is at the 18,300 level. Additionally, the highest number of call writers can be found at the 18,500 call, further supporting this hypothesis. Momentum indicators are also suggesting consolidation, which is a positive sign for a continued rally.

The prevailing bullish trend in the market is predominantly attributed to the steady inflow of foreign institutional investments (FIIs) spurred by lower treasury yields and the declining value of the US dollar. Nevertheless, the upbeat mood in the domestic bourses was moderated by a few large-cap firms’ tepid earnings reports. Internationally, the sentiment was buoyant, as the US inflation rate dipped below 5%, assuaging investors’ concerns and instilling confidence that the Federal Reserve’s monetary tightening initiatives have successfully curtailed inflationary pressures.

On 11/05/2023, FII/FPI recorded a buy value of Rs. 7,950.84 Cr and a sale value of Rs. 7,113.63 Cr, resulting in a net value of Rs. 837.21 Cr. Meanwhile, DII reported a buy value of Rs. 7,026.38 Cr, a sale value of Rs. 7,226.47 Cr, and a net value of -Rs. 200.09 Cr on the same day.

Bank Nifty: Up by 0.33%

At the start of the trading day, the Bank Nifty displayed an upward trend and exhibited a gain of 0.33 percent, eventually culminating in a close in the green zone at a figure of 43,475.30. Conversely, the BSE Sensex experienced a dip of 0.06 percent and concluded the day in the red at a low point of 61,904.52.

The index demonstrated an increase of 144 points, reaching 43,475, and produced a small-bodied candle on a daily scale with a long upper shadow and a small lower shadow. This pattern indicates that buyers are emerging at lower levels while selling pressure continues to persist at higher levels.

Bank Nifty underwent a range-bound trading session throughout the expiry period, resulting in the formation of a Doji candlestick pattern, indicating a sense of indecisiveness among traders. Notably, the 43,000 level emerged as a robust support area, backed up by the highest open interest on the put side. However, the 44,000 level acted as resistance, marked by new call writing. As a whole, the market appeared uncertain, with traders keeping a close eye on these crucial support and resistance levels to detect any potential market movements.

The Consumer Durables sector outperformed the rest, gaining 0.90%. Among the constituents of this sector, RELAXO FOOTWEARS LIMITED led the pack with a gain of 3.58%, followed by BATA INDIA LIMITED and HAVELLS INDIA LIMITED, which gained 2.25% and 2.17%, respectively. In contrast, the Pharma sector was the biggest loser with a decline of 1.26%. DR. REDDY’S LABORATORIES LIMITED was the worst performer within this sector, experiencing a decline of 6.93%, while LAURUS LABS LIMITED and DIVI’S LABORATORIES LIMITED declined by 3.56% and 3.19%, respectively.

Bank Nifty

The Nifty Banking sector had some gainers and some losers for the day.

The gainers included AU Bank with a 1.96% increase, IndusInd Bank with a 1.26% increase, IDFC First Bank with a 1.25% increase, Bandhan Bank with a 0.97% increase, and Axis Bank with a 0.65% increase. On the other hand, the biggest losers in the sector included Federal Bank with a 1.04% decline. These results suggest that some banking stocks performed better for the day.

Buzzing

Adani Enterprises Ltd. witnessed a surge in its share price, rising by 5.11% from its previous closing value of Rs 1,892.15. The current trading price of Adani Enterprises Ltd. is Rs 1,988.90, with a remarkable 3-year return of 1251.05% in contrast to Nifty 100, which gave a return of 92.53%. Yesterday marked the appearance of a 5-day moving crossover signal, which has historically been followed by an average price decline of -3.73% within seven days. Furthermore, the company’s annual revenue growth of 96.18% has outperformed its 3-year CAGR of 45.79%.

Asian Paints Ltd. The share price of Asian Paints Ltd. witnessed an increase of 1.65% from its previous closing value of Rs 3,041.40, with the current trading price of the stock being Rs 3,091.65. Over a 3-year period, the stock has exhibited a return of 93.77%, outperforming Nifty 100, which provided a return of 92.53%. As derivatives of crude oil are a critical component of Asian Paints Ltd.’s raw material inventory, the price of crude oil holds a significant impact on the company’s margins. Elevated crude oil prices pose a challenge to the company’s bottom line and margins.

Dr. Reddy’s Laboratories Ltd. observed a downturn in its share price, decreasing by -6.47% from its previous closing value of Rs 4,867.30. As of the latest trade, the stock’s value stands at Rs 4,552.25. Yesterday marked the appearance of a 14-day moving crossover signal, which, over the last five years, has historically been followed by an average price decline of -2.26% within seven days. Moreover, the company’s annual revenue growth of 16.78% has surpassed its 3-year CAGR of 12.22%. Additionally, the company delivered a ROE of 19.35% for the year ending 31 March 2023, outperforming its 5-year average of 14.06%.

Buzz

On Thursday, the rupee ended lower by 15 paise at 82.09 (provisional) versus the US dollar. The decline was attributed to the strength of the American currency as well as the rise in crude oil prices in international markets.

The surge in crude oil prices has caused the rupee to experience some strain. As a result, forex market players are eagerly anticipating the release of US jobless figures later in the day. The rupee is expected to fluctuate within the range of 81.85-82.25.

In the meantime, the dollar index has risen by 0.42 per cent, reaching 101.91. Additionally, Brent crude futures have gone up by 0.56 per cent, now sitting at $76.84 per barrel.

Advance Decline Ratio

Today, the advance-decline ratio was 1.50, and the market breadth was positive. The volatility index India Vix increased by 1.01 percent to settle at 13.22 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1337
Decliners – 894
52Wk High –  68
52Wk Low – 13
High Band Hitters – 62
Low Band Hitters – 28
200d SMA – 17733
50d SMA – 17564
20d SMA – 17944

Top Gainers and Losers Stocks

The top gainers were Adani Enterpeises (+5.07%), Asian Paint (+3.34%), Hindustan Unilever (+2.67%), Adani Ports (+2.46%), and NTPC (+1.27%).

The top losers were Dr. Reddy (-6.93%), LT (-5.09%), Hindalco (-3.49%), Divi’s Laboratories (-3.19%), and JSW Steel (-1.97%).

Top Gainers and Losers Sector

The top gainers sectors were Consumer Durables (+0.90%), Realty (+0.48%), FMCG (+0.46%), Auto (+0.38%) and Financial Services (+0.33%).

The top losers sectors were Pharma (-1.26%), and Metal (-0.43%).

The Nifty Midcap 50 was up by 0.40 percent, while the Nifty Small Cap 50 was up by 0.46 percent on the day.

The Nifty Midcap 50 index currently closed at 9,194.65, while the Nifty Small Cap 50 index currently closed at 4,492.40.

SECTORS – NOTABLE ACTION
CONSUMER DURABLES +0.90%
REALTY +0.48%
FMCG +0.46%
PHARMA -1.26%
METAL -0.43%

Stocks Ban List

(SEBI) F&O ban list  (GNFC open at +601.80 and close at +623.40), (BHEL open at +80.75 and close at +81.05), (CANBK open at +302.00 and close at +301.10), and (MANAPPURAM open at -115.50 and close at +115.50) are not currently on the stock exchange.

The Securities and Exchange Board of India (SEBI) has banned GNFC, BHEL, CANBK, and MANAPPURAM from trading in the futures and options (F&O) segment of the stock exchange.

A stock enters the Ban List if its MWPL is above 95%. Implying that, Ban List shows the Futures and Options (FnO ) stocks whose combined open interest in all FnO contracts for a given period crosses 95% of Market-Wide Position Limit.

It seems that PNB, IBULHSGFIN, L&TFH, INDIACEM, and ZEEL may be at risk of being added to the ban list.

MANAPPURAM has the possibilites of exit from ban list.

Daily Pivots

As per the above pivots data, 18240 to 18380 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Volatility Persists, but Nifty Ends on a High Note at 18,315 Mark
Nifty Flat as Late Sell-Off Erases Early Gains
Nifty Bounces Back as Financials Recover from Friday’s Decline

This article is only for educational purposes and is not an investment advice.