RBI Policy Outcome Receives Thumbs-Down from Indian Equity Market

NiftyTrader • August 10, 2023

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Index	Price	Change	% Chg
Nifty 50	19,543.10	–89.45	-0.46%
Nifty Bank	44,541.80	–338.90	-0.76%
BSE SENSEX	65,688.18	–307.63	–0.47%

At the close, the Nifty 50 was at 19,543.10 down by 0.46%

In today’s trading session, the NSE Nifty 50 index commenced on a downtrend, opening lower and experiencing a decline of 0.46 percent. The index sustained its negative trajectory throughout the day and concluded in the red zone. Notably, Nifty closed below the 19550 mark, underscoring the challenging market conditions.

The Reserve Bank of India’s (RBI) decision to maintain the current interest rate was widely anticipated. However, the Monetary Policy Committee’s (MPC) cautious tone and the absence of any indication for a rate cut by year-end have adversely affected market sentiment.

The persistent concern surrounding inflation remains pivotal, influencing the RBI’s stance. The central bank’s vigilance over developments in key global economies indicates that investors’ enthusiasm for equities will be measured in the near and medium term.

Furthermore, investor activity has been subdued in anticipation of critical upcoming events. The imminent release of US inflation data has prompted caution, as has the upcoming release of domestic CPI inflation and IIP numbers later this week. These data points are expected to provide valuable insights into economic trends, guiding investor decisions moving forward. As the market navigates these variables, informed and strategic decision-making remains essential for capitalizing on opportunities while managing risk.

Bank Nifty: Down by 0.76%

Today witnessed a bearish start for the Bank Nifty, opening in the red and sustaining a decline of 0.76 percent. The downward trajectory persisted, leading to a closing figure of 44,541.80, signifying a challenging session for the banking sector.

Likewise, the BSE Sensex mirrored the negative sentiment, experiencing a 0.47 percent dip. The index concluded its trading day in the red, reaching a low of 65,688.18.

Following the RBI policy announcement, the Bank Nifty index faced notable selling pressure, creating a challenging scenario. A notable resistance barrier is clearly visible near the 45000 level, which presents a formidable obstacle for potential breakthroughs, given the ongoing selling pressure.

Amidst today’s market dynamics, the Media sector commands attention by surging an impressive 6.63%, showcasing robust potential. Particularly noteworthy, Zee Entertainment Enterprises Ltd. posts a remarkable 16.18% gain, signifying strong performance. Additionally, Tv18 Broadcast Ltd. contributes to the sector’s positive trajectory with a commendable 6.58% gain, reflecting investor confidence.

However, in contrast, the FMCG sector experiences a downturn, with a 0.91% decline. Within this context, Britannia Industries Ltd. witnesses a dip of -1.32%, while Itc Ltd. follows suit with a -1.24% loss.

Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) activities for the given period demonstrate a Buy Value of Rs. 11,533.43 crore and a Sale Value of Rs. 11,202.21 crore. Consequently, the Net Value stands at Rs. 331.22 crore.

On the other hand, Domestic Institutional Investors (DII) engagements during the same period reveal a Buy Value of Rs. 9,153.78 crore and a Sale Value of Rs. 8,450.06 crore, resulting in a Net Value of Rs. 703.72 crore.

Bank Nifty

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

The gainers included IndusInd Bank with a 1.53% increase, and State Bank of India with a 0.04% increase. On the other hand, the biggest losers in the sector included AU Bank with a 2.21% decline, Kotak Bank with a 1.87% decline, Bandhan Bank with a 1.33% decline, Axis Bank with a 1.01% decline, and Bank of Baroda with a 0.98% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

Implementing Incremental CRR for Liquidity Management

The adoption of Incremental Cash Reserve Ratio (I-CRR) serves to absorb excess liquidity stemming from Rs 2,000 note deposits. This strategic move is projected to allocate around Rs 1 lakh crore as additional reserves within the banking system. This is a temporary measure, with a liquidity assessment scheduled for September 8th, 2023.

While impactful in managing liquidity, this measure is unlikely to significantly affect banks’ long-term profitability. Notably, it’s anticipated that Net Interest Margins (NIMs) won’t experience considerable incremental pressure due to this adjustment. The estimated increment in reserves, approximately 1% of total outstanding credit, underscores the measured nature of this liquidity management strategy. As the RBI seeks to maintain equilibrium in the financial system, a holistic understanding of the temporary implications is essential for informed decision-making.

Buzzing

In the world of finance, a closer look at recent market trends reveals intriguing shifts. Adani Enterprises Ltd. showcased a resilient 1.67% uptick from its prior close of Rs 2,507.10, settling at Rs 2,549.00. Impressively, a three-year return of 1175.98% eclipses Nifty 100’s 71.61% gain. The emergence of a 14-day moving crossover ignites curiosity, with historical data indicating an average 5.8% price gain within seven days. Additionally, a remarkable annual revenue growth of 96.18% outperforms the 3-year CAGR of 45.79%. Intriguingly, merely 4.84% of trading sessions in 18 years witnessed intraday gains surpassing 5%.

Conversely, Asian Paints Ltd. encountered a -3.00% dip from its preceding close of Rs 3,331.00, resting at Rs 3,231.00. Despite this setback, a commendable three-year return of 86.83% outshines Nifty 100’s comparable gain. Notably, derivatives of crude oil significantly influence the company’s margins due to its status as a major raw material. The intricate relationship between crude oil prices and margins underscores the crucial role it plays in shaping the bottom line.

Advance Decline Ratio

Today, the advance-decline ratio was 0.72, and the market breadth was negative. The volatility index India Vix increased by 2.33 percent to settle at 11.40 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 971
Decliners – 1356
52Wk High – 145
52Wk Low – 20
High Band Hitters – 71
Low Band Hitters – 32
200d SMA – 18271
50d SMA – 19221
20d SMA – 19664

Top Gainers and Losers Stocks

The top gainers were Adani Enterprises (+1.67%), Adani Ports (+1.63%), IndusInd Bank (+1.53%), Titan (+1.09%), and ONGC (+1.07%).

The top losers were Asian Paint (-3.00%), Kotak Bank (-1.87%), Britannia (-1.32%), ITC (-1.24%), and Nestle India (-1.21%).

Top Gainers and Losers Sector

The top gainers sectors were Media (+6.63%), Metal (+0.68%), and Oil & Gas (+0.04%).

The top losers sectors were FMCG (-0.91%), Financial Services (-0.77%), Pharma (-0.74%), Consumer Durables (-0.40%), and Auto (-0.27%).

The Nifty Midcap 50 was up by 0.11 percent, while the Nifty Small Cap 50 was down by 0.52 percent on the day.

The Nifty Midcap 50 index currently closed at 10,868.15, while the Nifty Small Cap 50 index currently closed at 5,368.60.

SECTORS – NOTABLE ACTION
MEDIA +6.63%
METAL +0.68%
OIL & GAS +0.04%
FMCG -0.91%
FINANCIAL SERVICES -0.77%
PHARMA -0.74%

Stocks Ban List

(SEBI) F&O ban list (CHAMBLFERT open at -274.00 and close at -268.95), (DELTACORP open at +186.65 and close at -184.35), (IBULHSGFIN open at +169.85 and close at -164.80), (HINDCOPPER open at +152.00 and close at -148.25), and (BALRAMCHIN open at -394.75 and close at +395.20) are not currently on the stock exchange.

The Securities and Exchange Board of India (SEBI) has banned CHAMBLFERT, DELTACORP, IBULHSGFIN, HINDCOPPER, and BALRAMCHIN 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, MANAPPURAM, GNFC, GRANULES, BHEL, CANFINHOME, PNB, LICHSGFIN, RBLBANK, TATACHEM, PEL, and RECLTD stocks has the possibilities of enterance in the ban list.