Heightened Volatility as Domestic Market Reaches Historical Peaks

NiftyTrader • June 22, 2023

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Index	Price	Change	% Chg
NIFTY 50	18,771.25	-85.60	-0.45%
NIFTY BANK	43,724.85	-134.35	–0.31%
BSE SENSEX	63,238.89	–284.26	–0.45%

Daily closing price, change and % change of benchmark indices.

At the close, the Nifty 50 was at 18,771.25 down by 0.45%

The presence of a bearish candle on the daily charts has reinforced the double top formation displayed by the Nifty index, indicating a predominantly negative market sentiment. Day traders should pay attention to the immediate resistance level at 18850, while surpassing this barrier is necessary for a new upward rally to begin.

The trading session began with the NSE Nifty 50 opening at a lower level, experiencing a decline of 0.45 percent throughout the day before ultimately concluding in negative territory. It is worth noting that the Nifty settled below the significant mark of 18800.

Not only were investors affected by negative global market signals, but they were also disturbed by the US Federal Reserve’s testimony. The testimony suggested that the decrease in inflation would be postponed, causing concern among investors. The expectation of prolonged inflationary circumstances indicated the possibility of future interest rate increases, which only added to investor anxiety.

Among the sectors, the Metal sector emerged as the top gainer, showcasing a 0.05% increase. Notably, within this sector, APL Apollo Tubes Ltd. experienced a gain of 4.13%, Hindustan Zinc Ltd. recorded a gain of 1.09%, and Tata Steel Ltd. saw an increase of 0.82%.

On the other hand, the Realty sector suffered as the top loser, declining by 0.80%. Within this sector, Godrej Properties Ltd. experienced a loss of -2.34%, while Oberoi Realty Ltd. recorded a decline of -1.85%.

Bank Nifty: Down by 0.31%

The Bank Nifty initially showed a positive trend upon opening, but unfortunately experienced a subsequent decline of 0.31 percent, ultimately concluding in the red at a level of 43,724.85. Similarly, the BSE Sensex followed suit with a 0.45 percent decrease, reaching a low point of 63,238.89 before ending the session in negative territory.

Current circumstances, the domestic market is experiencing a significant increase in volatility, with its trajectory closely following historical peaks. This heightened volatility has had a notable impact on mid- and small-cap stocks, which have demonstrated impressive resilience in the face of these market fluctuations.

Despite these challenges, mid- and small-cap stocks have proven to be remarkably resilient. These companies have weathered the storm of market fluctuations and have continued to perform well, even in the face of adversity.

Bank Nifty

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

The gainers included HDFC Bank with a 0.56% increase, Federal Bank with a 0.36% increase, and ICICI Bank with a 0.11% increase. On the other hand, the biggest losers in the sector included IDFC First Bank with a 5.29% decline, Punjab National Bank with a 3.22% decline, Bank of Baroda with a 2.30% decline, IndusInd Bank with a 1.29% decline, and Bandhan Bank with a 1.28% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

The Bank of America’s (BofA) top treasury executive in India has made a bold prediction that the Indian rupee will strengthen beyond the 80-per-dollar level in 2024. This positive outlook is primarily supported by foreign inflows, with the influx of funds through Global Capability Centres (GCCs) expected to be a key driver in bolstering the value of the rupee.

Despite the potential deceleration of merchandise exports due to a potential global economic slowdown, the combination of foreign inflows through GCCs, remittances, and the decrease in crude oil prices is anticipated to mitigate the impact and provide support to the rupee. This is a promising development for India’s economy, as a stronger rupee will attract more foreign investment and boost the country’s overall financial stability.

Furthermore, the executive noted that as the rupee strengthens, there may be a corresponding upward movement in the benchmark 10-year bond yield, which could potentially rise towards 7.20%. This projection suggests a potential increase in borrowing costs, reflecting market expectations. These dynamics highlight the interplay between various factors influencing the Indian currency and bond markets, including foreign inflows, economic conditions, and global trends.

The equity markets have experienced a decline in risk sentiment due to the Federal Reserve’s hawkish views, which have caused investors to exercise caution. Presently, market participants are closely monitoring the Bank of England’s upcoming policy decision, with speculation arising about the possibility of a more significant interest rate hike than initially anticipated by the central bank. This development has prompted investors to carefully evaluate the potential implications and adjust their investment strategies accordingly. It is imperative for investors to remain vigilant and informed in light of these market fluctuations.

Buzzing

Divi’s Laboratories Ltd. witnessed a positive movement in its share price, registering a 1.10% increase from its previous close of Rs 3,509.55. The stock of Divi’s Laboratories Ltd. last traded at a price of 3,548.15. Remarkably, it delivered a three-year return of 49.39%, whereas the Nifty 100 index recorded a return of 80.58%. Additionally, a 14-day moving crossover signal emerged recently, indicating a potential market shift. Notably, within the past five years, this signal has been followed by an average price decline of -2.85% within a span of seven days.
Furthermore, Divi’s Laboratories Ltd. experienced a sales de-growth of 10.6%, marking the first instance of revenue contraction in the past three years. It is worth noting that, out of the last 18 years, only 1.53% of the trading sessions witnessed intraday declines higher than 5%.

Bajaj Finance Ltd. encountered a decline in its share price, registering a -2.33% decrease from its previous close of Rs 7,206.15. The stock of Bajaj Finance Ltd. last traded at a price of Rs 7,038.00. Impressively, it delivered a significant three-year return of 153.71%, outperforming the Nifty 100 index which recorded a return of 80.58%.

Furthermore, a 5-day moving crossover signal emerged recently, indicating a potential market shift. Notably, within the past five years, this signal has been followed by an average price decline of -3.07% within a span of seven days.

In terms of financial performance, Bajaj Finance Ltd. showcased strong annual revenue growth of 30.86%, surpassing its three-year Compound Annual Growth Rate (CAGR) of 16.03%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.42, and the market breadth was negative. The volatility index India Vix increased by 2.25 percent to settle at 11.55 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 691
Decliners – 1629
52Wk High – 91
52Wk Low – 12
High Band Hitters – 43
Low Band Hitters – 49
200d SMA – 17924
50d SMA – 18297
20d SMA – 18660

Top Gainers and Losers Stocks

The top gainers were Divi’s Laboratories (+1.10%), LT (+0.98%), Tata Steel (+0.82%), HDFC (+0.57%), and HDFC Bank (+0.56%).

The top losers were Bajaj Finance (-2.33%), Tata Consumer (-2.11%), Asian Paint (-1.99%), Tata Motors (-1.87%), and Power Grid (-1.80%).

Top Gainers and Losers Sector

The top gainers sectors were Metal (+0.05%), and Media (+0.04%).

The top losers sectors were Realty (-0.80%), Oil & Gas (-0.79%), IT (-0.74%), FMCG (-0.72%), and Consumer Durables (-0.71%).

The Nifty Midcap 50 was down by 1.21 percent, while the Nifty Small Cap 50 was down by 0.62 percent on the day.

The Nifty Midcap 50 index currently closed at 9,911.45, while the Nifty Small Cap 50 index currently closed at 4,813.90.

SECTORS – NOTABLE ACTION
METAL +0.05%
MEDIA +0.04%
REALTY -0.80%
OIL & GAS -0.79%
IT -0.74%

Stocks Ban List

(SEBI) F&O ban list (PNB open at +53.15 and close at -51.00), (HINDCOPPER open at -116.50 and close at -115.25), (L&TFH open at +124.05 and close at -120.45), (BHEL open at -86.90 and close at -85.75) (HAL open at -3822.00 and close at -3760.45), and (DELTACORP open at -244.10 and close at -239.75) are not currently on the stock exchange.

The Securities and Exchange Board of India (SEBI) has banned PNB, HINDCOPPER, L&TFH, BHEL, HAL, and DELTACORP 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.
ZEEL, BALRAMCHIN, PEL, GNFC, IDFC, MANAPPURAM, RBLBANK, IEX, and DIXON Face Possible Entry in Ban List.

HAL, and DELTACORP has the possibilities of exit from the ban list.