Volatility and Caution Prevail Ahead of RBI Policy Meeting

At the close, the Nifty 50 was at 20,901.15 down by 0.17%

The trading day for the NSE Nifty 50 commenced on a subdued note, witnessing a 0.17 percent decline and closing below the critical level of 20,900. This decline, driven by selling pressure in capital goods, FMCG, and IT sectors, followed an impressive streak of seven consecutive sessions of gains. The market sentiment was influenced by weak global cues, instigating cautious trading ahead of the Reserve Bank of India’s (RBI) pivotal monetary policy meeting scheduled for December 8.

Anticipation of RBI Monetary Policy Meeting: Investor anticipation is high as the RBI’s Monetary Policy Committee (MPC) gears up to announce key interest rates on December 8, marking the final review before the presentation of the fiscal year 2024-25 budget. This significant impending announcement has influenced a wait-and-watch approach among investors, fostering a sense of caution.

Market Dynamics and Investor Sentiments: While the day initiated with restrained enthusiasm in Indian equities, a noteworthy recovery in Banking stocks offered some support. Despite attempts to reclaim higher levels, the Index concluded at 20,901.15, witnessing a modest loss of 36.55 points by the day’s close.

Factors Influencing the RBI’s Decision: Investor focus remains on diverse factors, including a better-than-expected Q2 GDP growth, declining global oil prices, and reduced global bond yields, potentially favoring the MPC’s decision. Conversely, expectations of a surge in domestic November inflation, diminished Rabi cultivation, and an uptick in foodgrain prices might prompt the RBI to adopt a more cautious approach in the short term.

The culmination of these factors underscores the intricacies at play in the market, as investors keenly await the RBI’s decision and remain vigilant regarding its potential impact on market dynamics in the immediate future.

Bank Nifty: Up by 0.01%

The day commenced with the Bank Nifty exhibiting a slight dip, opening in the red zone, yet eventually marking an upward trajectory by 0.01 percent. Ultimately, it closed positively at 46,841.40, reflecting resilient momentum. Conversely, the BSE Sensex experienced a downturn of 0.19 percent, culminating at a low of 69,521.69, closing in the red, indicative of a contrasting performance.

The Bank Nifty index showcased a sideways trend ahead of the RBI policy announcement, signaling cautious investor sentiment. This nuanced movement underlines the anticipation and cautious stance prevailing in the market.

In the sectorial front, Consumer Durables emerged as a frontrunner, boasting a substantial gain of 1.03 percent. Notably, Voltas Ltd. registered an impressive surge of 2.60 percent, accompanied by Rajesh Exports Ltd. with a commendable gain of 2.16 percent within this sector. Conversely, FMCG faced a downturn as the top loser by 0.90 percent. Here, Radico Khaitan Ltd. encountered a significant decline of -3.81 percent, followed by Godrej Consumer Products Ltd. with a decrease of -1.80 percent, outlining a contrasting performance within this segment.

The FII/FPI transaction data indicates a buy value of 13,934.88 and a sale value of 15,498.91, resulting in a negative net value of -1,564.03. This portrays a scenario where foreign entities have sold stocks worth more than they purchased within the specified period. On the other hand, Domestic Institutional Investors (DIIs) recorded a buy value of 9,313.11 and a sale value of 9,322.77, leading to a marginal negative net value of -9.66. This suggests a slight net divestment by domestic investors during the same period.

Bank Nifty

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

The gainers included Punjab National Bank with a 1.76% increase, Bank of Baroda with a 0.93% increase, AU Bank with a 0.54% increase, State Bank of India with a 0.50% increase, and IndusInd Bank with a 0.31% increase. On the other hand, the biggest losers in the sector included IDFC First Bank with a 2.93% decline, ICICI Bank with a 0.63% decline, and Federal Bank with a 0.19% decline. These results suggest that some banking stocks performed better for the day.

Buzz

Rupee’s Performance Against the US Dollar: Market Trends and Influences

The rupee exhibited a nuanced trajectory against the US dollar, opening at 83.36, marking a marginal decline of 4 paise, attributed to the robustness of the American currency on the global platform and the subdued movement in the domestic equity market.

The rupee’s movement has remained confined within a narrow range, buoyed by the favorable impact of declining crude oil prices. However, this positive effect was counterbalanced by the heightened demand for the dollar from importers, leading to the rupee’s constrained trading environment.

Recent market movements witnessed the rupee appreciating by 5 paise on the previous day, settling at 83.32 against the US dollar. This appreciation was bolstered by resumed capital inflows and the RBI’s proactive measures in safeguarding the crucial 83.40 level.

Brent oil prices experienced a significant downturn, reaching a six-month low at $74.63 per barrel. This decline, attributable to record-high US oil output despite a reduction in inventories, may potentially benefit the rupee’s valuation due to reduced pressure stemming from oil import costs.

While the rupee navigates within a limited range against the dollar amid diverse influencing factors, the downtrend in Brent oil prices stands as a positive indicator, potentially alleviating pressures on the rupee’s valuation stemming from oil-related imports. The market remains watchful for evolving global cues that may further impact the rupee’s trajectory in the coming sessions.

Buzzing

Power Grid Corporation of India Ltd. witnessed a noteworthy uptick in share price by 2.38%, reaching Rs 229.75 from its previous close at Rs 224.40. The recent signal indicates a buy trend, highlighting an advantageous position for the bulls. The daily MACD crossover occurred on Dec 05, 2023, historically resulting in an average price gain of 3.3% within 10 days post this signal over the past decade.

Over the last 16 years, only a minimal 1.04% of trading sessions recorded intraday gains exceeding 5%. This suggests a steady and controlled intraday movement in the stock’s value over an extended period.

Conversely, Apollo Hospitals Enterprise Ltd. observed a decrease of -1.55% in its share price, declining from Rs 5,543.10 to Rs 5,457.00. The current trend indicates a sell signal, projecting a bearish trajectory due to the 5-day moving average crossover observed recently. Historical data showcases an average price decline of -2.58% within 7 days following this signal over the last 5 years.

In the span of 19 years, merely 1.51% of trading sessions exhibited intraday declines surpassing 5%. This underscores a consistent trend of limited drastic intraday fluctuations within the stock’s value.

Advance Decline Ratio

Today, the advance-decline ratio was 1.26, and the market breadth was positive. The volatility index India Vix decreased by 7.76 percent to settle at 12.67 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1363
Decliners – 1079
52Wk High –  194
52Wk Low – 9
High Band Hitters – 138
Low Band Hitters – 30
200d SMA – 18868
50d SMA – 19671
20d SMA – 19977

Top Gainers and Losers Stocks

The top gainers were Adani Ports (+2.56%), Power Grid (+2.38%), UltraTech Cement (+1.82%), Cipla (+1.56%), and NTPC (+1.32%).

The top losers were Bharti Airtel (-2.39%), Hindustan Unilever (-1.77%), Apollo Hospital (-1.55%), ONGC (-1.44%), and Tata Steel (-1.37%).

Top Gainers and Losers Sector

The top gainers sector were Consumer Durables (+1.03%), Media (+0.92%), Pharma (+0.77%), Oil & Gas (+0.74%), and Auto (+0.44%).

The top losers sector were FMCG (-0.90%), Metal (-0.75%), IT (-0.18%), and Financial Services (-0.02%).

SECTORS – NOTABLE ACTION
CONSUMER DURABLES +1.03%
MEDIA +0.92%
PHARMA +0.77%
FMCG -0.90%
METAL -0.75%
IT -0.18%

Stocks Ban List

(SEBI) F&O ban list (SAIL open at +99.80 and close at -98.95), (IBULHSGFIN open at +200.15 and close at +205.65), (DELTACORP open at +145.00 and close at +139.75), (ZEEL open at +262.00 and close at +271.60), and (INDIACEM open at -253.40 and close at +263.25) are not currently on 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.

NATIONALUM, HINDCOPPER, MANAPPURAM, BALRAMCHIN, and ASHOKLEY stocks has the possibilities of enterance in the ban list.

Daily Pivots

As per the above pivots data, 20830 to 21000 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Foreign Inflows Propel Tech and Power Stocks to New Heights for Third Consecutive Day
Closing Strong Benchmark Indices Settle Near Day’s High Amidst Weak Global Cues
BJP’s Election Win Fuels Nifty’s Rally to New Heights

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