Nifty Extends Decline on Negative Global Cues

NiftyTrader • June 23, 2023

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Index	Price	Change	% Chg
Nifty 50	18,665.50	-105.75	-0.56%
Nifty Bank	43,622.90	-101.95	-0.23%
BSE SENSEX	62,979.37	–259.52	–0.41%

At the close, the Nifty 50 was at 18,665.50 down by 0.56%

Today’s trading session started off on a bearish note for the NSE Nifty 50, with a downward trend of 0.56 percent that persisted throughout the day, ultimately concluding in the red zone. The Nifty index even dropped below the significant mark of 18700, signaling a clear shift in market sentiment. But fear not, as this presents an exciting opportunity for savvy investors to capitalize on the market’s fluctuations and make some serious gains.

Global stocks faced a decline as worries grew over central banks’ efforts to curb inflation, potentially leading to economic downturns and strengthening the US dollar. This downward trend persisted throughout the week, resulting in the market’s most challenging week since March. Traders remained cautious about the overall stability of the global economy in light of these measures. Additionally, the Nifty index exhibited weakness with consecutive declines over two days, accompanied by a further slip on a detailed time frame.

The Relative Strength Index (RSI) signaled negative divergence, indicating a diminishing bullish momentum. In the Indian IT sector, concerns arose due to Accenture’s downward revision of earnings guidance, putting pressure on IT stocks. Nonetheless, the domestic market is expected to withstand a significant correction, supported by favorable domestic economic indicators and corrections in international commodities prices, thereby sustaining earnings growth on a quarter-on-quarter basis.

Bank Nifty: Down by 0.23%

Throughout the week, the Bank NIFTY index has been characterized by a persistent struggle between the bullish and bearish forces. Notably, the index encounters a significant resistance level at 44,000, which coincides with the area of highest open interest on the call side. This indicates a strong buildup of market participants with optimistic expectations at that particular level.

In parallel with the broader market trend, the Bank Nifty began the trading session on a bearish note, experiencing a decline of 0.23 percent and ultimately closing in the red at 43,622.90. Similarly, the BSE Sensex followed suit, registering a 0.41 percent decrease and concluding in the red at a notable low of 62,979.37.

In the sectorial analysis, the Pharmaceutical sector emerged as the top gainer with a notable increase of 0.15%. Within this sector, NATCO PHARMA LIMITED experienced a significant gain of 7.19%, followed by AUROBINDO PHARMA LIMITED with a gain of 4.19%, and DR. REDDY’S LABORATORIES LIMITED with a gain of 1.91%. On the other hand, the Metal sector witnessed a decline of 2.48%. Notably, ADANI ENTERPRISES LIMITED encountered a loss of -7.02%, while APL APOLLO TUBES LIMITED recorded a decrease of -4.24% within this sector.

Bank Nifty

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

The gainers included IndusInd Bank with a 2.88% increase, Punjab National Bank with a 0.10% increase, and IDFC First Bank with a 0.06% increase. On the other hand, the biggest losers in the sector included Federal Bank with a 1.45% decline, State Bank of India with a 1.33% decline, Bandhan Bank with a 1.13% decline, Axis Bank with a 0.83% decline, and Bank of Baroda with a 0.62% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

On Friday, the Indian rupee depreciated by 5 paise, ending at 82.02 (pro) against the US dollar. This decline can be attributed to the robustness of the American currency in comparison to other major global currencies, as well as the current negative sentiment in equity markets.

The Indian rupee’s depreciation against the US dollar is a reflection of the ongoing economic challenges faced by the country. The strength of the American currency has been a significant factor in this decline, as it continues to outperform other major currencies. Additionally, the negative sentiment in equity markets has contributed to the rupee’s downward movement.

The local currency was under added pressure as foreign funds flowed out of domestic equities. Nevertheless, the significant drop in crude prices acted as a mitigating factor, providing a cushion for the Indian currency’s decline.As foreign investments left domestic equities, the local currency faced increased strain. However, the decline in crude prices helped alleviate the Indian currency’s fall.

Foreign Institutional Investors/Foreign Portfolio Investors (FII/FPI) engaged in trading activities with a buy value of 6,263.33 Rs. Cr. and a sale value of 6,608.14 Rs. Cr. Consequently, the net value stood at -344.81 Rs. Cr., indicating a net selling position. Similarly, Domestic Institutional Investors (DII) participated in trading on the same date with a buy value of 6,694.19 Rs. Cr. and a sale value of 7,378.20 Rs. Cr. The net value for DIIs was recorded at -684.01 Rs. Cr., implying a net selling position as well.

Buzzing

IndusInd Bank Ltd. experienced a significant uptick of 2.88% in its share price, compared to the previous day’s closing value of Rs 1,272.70. The stock of IndusInd Bank Ltd. concluded at a last traded price of 1,309.40. On June 21, 2023, a 20-day moving crossover occurred, indicating a potential shift in the market. An analysis of the past five years reveals an average price decline of -3.54% within seven days following this signal.

However, it is worth noting that the company’s annual revenue growth of 16.51% surpasses its three-year compound annual growth rate (CAGR) of 7.54%. Additionally, IndusInd Bank Ltd. reported a year-on-year (YoY) increase of 21.28% in advances, outperforming its five-year CAGR of 9.24%. These figures suggest that the company is on a positive growth trajectory.

It is also noteworthy that only 3.64% of trading sessions in the last 18 years have observed intraday declines exceeding 5%. This indicates that the company has a relatively stable trading history.

Adani Enterprises Ltd. experienced a notable decrease of -7.02% in its share price, falling from its previous closing value of Rs 2,397.25. The stock ultimately concluded at a last traded price of 2,229.00. However, over the course of three years, the stock delivered an impressive return of 1424.97%, outperforming the Nifty 100 index, which yielded a return of 79.41%.

Recently, a 20-day moving crossover occurred, indicating a potential shift in the market. Analysis of the past five years reveals an average price decline of -3.97% within seven days following this signal. It is important to note that the company exhibited an annual revenue growth of 96.18%, surpassing its three-year compound annual growth rate (CAGR) of 45.79%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.35, and the market breadth was negative. The volatility index India Vix decreased by 2.70 percent to settle at 11.24 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 600
Decliners – 1716
52Wk High – 53
52Wk Low – 18
High Band Hitters – 44
Low Band Hitters – 75
200d SMA – 17930
50d SMA – 18314
20d SMA – 18668

Top Gainers and Losers Stocks

The top gainers were IndusInd Bank (+2.88%), Dr. Reddy (+1.91%), Asian Paint (+1.51%), Bharti Airtel (+1.01%), and NTPC (+0.92%).

The top losers were Adani Enterprises (-7.02%), Adani Ports (-4.44%), BPCL (-3.45%), Hindalco (-2.93%), and Divi’s Laboratories (-2.11%).

Top Gainers and Losers Sector

The top gainers sectors were Pharma (+0.15%).

The top losers sectors were Metal (-2.48%), Media (-2.13%), Consumer Durables (-1.68%), Oil & Gas (-1.51%), and Auto (-1.03%).

The Nifty Midcap 50 was down by 1.05 percent, while the Nifty Small Cap 50 was down by 1.17 percent on the day.

The Nifty Midcap 50 index currently closed at 9,807.25, while the Nifty Small Cap 50 index currently closed at 4,757.65.

SECTORS – NOTABLE ACTION
PHARMA +0.15%
METAL -2.48%
MEDIA -2.13%
CONSUMER DURABLES -1.68%

Stocks Ban List

(SEBI) F&O ban list (RBLBANK open at -167.00 and close at -166.50), (HINDCOPPER open at -115.00 and close at -114.05), (PNB open at -50.80 and close at -50.50), (L&TFH open at -120.40 and close at -118.00), and (BHEL open at -85.50 and close at -84.65) are not currently on the stock exchange.

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

BHEL has the possibilities of exit from the ban list.