Nifty Down, Expected Continued Consolidation Pre-Q3 Results

At the close, the Nifty 50 was at 21,517.35 down by 0.69%

The NSE Nifty 50 started on a downtrend, declining by 0.69% and closing below 21,550. This decline, marking the second consecutive day of selling pressure, has left domestic equities in the red. Investors exercised restraint due to the imminent third-quarter earnings season.

Triggers that could ignite momentum are eagerly awaited amidst this cautious sentiment. The upcoming release of FOMC minutes by the US Federal Reserve is a key focus for insights into interest rate outlooks, contributing to the current subdued market environment. Global risk-off sentiments during Wednesday’s trading session, notably impacting IT stocks, influenced domestic markets.

Despite underwhelming performances in banking and IT sectors, the correction remains relatively healthy. Investors are advised to seize buying opportunities during market dips, particularly while Nifty sustains the 21,200 level. Sectors like pharmaceuticals and FMCG continue to attract attention, while market volatility surges due to profit booking and dip buying.

Investors’ concerns persist due to high valuations, prompting profit booking even among consistent buyers like DIIs. Lingering worries over valuation and the absence of fresh market triggers have kept many on the sidelines. Global economic indicators signaling manufacturing contraction in China and the Eurozone have heightened worries about the 2024 global economic recovery.

The market’s anticipation of Fed minutes remains high, potentially shaping rate cues. Indications of a rebound in the US 10-year yield and a rise in the dollar index hint at a less dovish Fed stance, adding to the prevailing market uncertainty. As the market navigates these uncertainties, vigilance and strategic investment decisions are essential.

Bank Nifty: Down by 0.12%

The Bank Nifty commenced the trading session on a downtrend, displaying a decline of 0.12%. Eventually, it closed in the red at 47,704.95. Similarly, the BSE Sensex mirrored this trend, plummeting by 0.75% and concluding at a low of 71,356.60.

During the weekly expiry, the Bank Nifty encountered considerable volatility, persisting on a bearish trajectory, particularly noticeable as it remained below the pivotal level of 48,000. Maintaining stability above this threshold holds crucial significance for the index’s trajectory. A definitive breach below this critical level might potentially escalate the prevailing selling pressure in the market.

In the sectorial front, the Real Estate sector experienced a notable upsurge, witnessing a significant gain of 1.23%. Among the top performers in this domain, Sobha Ltd. marked a remarkable ascent, demonstrating an impressive increase of 10.04%. Similarly, The Phoenix Mills Ltd. recorded a notable surge, showcasing a gain of 2.67%.

Conversely, the Information Technology (IT) sector faced a downturn, emerging as the top loser with a decline of 2.52%. Mphasis Ltd. observed a substantial decrease of -3.79%, while LTIMindtree Ltd. experienced a dip of -3.03% within this sector.

Foreign Institutional Investors (FIIs/FPIs) displayed a net sale value of Rs. 666.34 crore. Their buy value stood at Rs. 9,103.00 crore, while the sale value was notably higher at Rs. 9,769.34 crore. Conversely, Domestic Institutional Investors (DIIs) exhibited a larger net sale value at Rs. 862.98 crore. DIIs’ buy value totaled Rs. 10,402.57 crore, with the sale value notably surpassing at Rs. 11,265.55 crore.

Bank Nifty

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

The gainers included Bandhan Bank with a 4.60% increase, IndusInd Bank with a 1.42% increase, Bank of Baroda with a 1.08% increase, State Bank of India with a 0.79% increase, and AU Bank with a 0.46% increase. On the other hand, the biggest losers in the sector included HDFC Bank with a 1.44% decline, Punjab National Bank with a 0.67% decline, Federal Bank with a 0.03% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Shows Resilience Against Dollar Amidst Market Volatility

On Wednesday, the Indian rupee saw a marginal appreciation of 4 paise, closing at 83.28 against the US dollar. This upward movement was supported by the easing of crude oil prices and inflows from foreign funds. However, the currency faced pressure due to the negative trend observed in domestic equities.

In the interbank foreign exchange market, the rupee initiated trading at 83.30 against the greenback. Throughout the day, it fluctuated between an intra-day low of 83.33 and a high of 83.25 before settling at 83.28 (pro), marking a 4 paise gain from the previous close. Notably, this appreciation occurred despite domestic benchmark indices displaying a negative trajectory.

On Tuesday, the rupee had closed at 83.32 against the dollar. It recovered from initial losses as the dollar remained steady ahead of the Federal Open Market Committee (FOMC) meeting minutes.

Amidst these currency fluctuations, the dollar index, measuring the greenback’s strength against a basket of six currencies, showed a slight increase, trading at 102.28 with a 0.08% rise on Wednesday.

Simultaneously, Brent crude futures, the global oil benchmark, experienced a decline of 0.41%, reaching $75.58 per barrel. This decrease in crude oil prices contributed to the rupee’s upward movement against the dollar, supporting its modest gains amidst prevailing market uncertainties.

Stocks Highlights

Bajaj Auto Ltd. Positive Momentum and Financial Stability

Bajaj Auto Ltd. experienced a notable surge, with its share price rising by 4.55% to reach Rs 6,968.00 from its previous close of Rs 6,665.05. The company’s new dividend policy, tying dividend payouts to cash reserves, stands as a positive move. Anticipated future dividends for FY23 and beyond could witness a significant increase owing to the current reserve levels.

Moreover, the company’s commendable financial stance is underscored by its debt-free status over the last five years. The minimal allocation of less than 1% of operating revenues toward interest expenses and a modest 4.07% towards employee costs by the year ending 31st March 2023 further highlights its sound financial management.

JSW Steel Ltd. Market Caution Amidst Decline and Signals

Conversely, JSW Steel Ltd. observed a decline in its share price, dropping by -3.77% to Rs 837.40 from its previous close of Rs 870.20. Market analysis reveals cautionary signals: historically, only 3.24% of trading sessions in the last 19 years experienced intraday declines exceeding 5%. Furthermore, sell signals have emerged, with indicators pointing towards a potential bearish trend.

The appearance of a 5-day moving crossover and a daily MACD crossover signals a historical average price decline of -2.74% within 7 days and -3.08% within 10 days, respectively, following similar occurrences over the last few years. Additionally, the company’s allocation of 4.16% of operating revenues towards interest expenses and 2.36% towards employee costs by the year ending 31st March 2023 suggests considerations for market watchers regarding its financial dynamics.

Advance Decline Ratio

Today, the advance-decline ratio was 1.19, and the market breadth was positive. The volatility index India Vix decreased by 3.30 percent to settle at 14.10 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1359
Decliners – 1146
52Wk High –  204
52Wk Low – 8
High Band Hitters – 139
Low Band Hitters – 32
200d SMA – 19203
50d SMA – 20287
20d SMA – 21322

Top Gainers and Losers Stocks

The top gainers were Bajaj Auto (+4.55%), Adani Enterprises (+2.48%), Adani Ports (+1.58%), Cipla (+1.56%), and ITC (+1.51%).

The top losers were Hindalco (-3.82%), JSW Steel (-3.77%), Tata Steel (-3.30%), LTIM (-3.03%), and Tech Mahindra (-2.90%).

Top Gainers and Losers Sector

The top gainers sector were Realty (+1.23%), Pharma (+0.61%), Oil & Gas (+0.55%), Media (+0.49%), and Consumer Durables (+0.34%).

The top losers sector were IT (-2.52%), Metal (-1.81%), Financial Services (-0.42%), and Auto (-0.12%).

SECTORS – NOTABLE ACTION
REALTY +1.23%
PHARMA +0.61%
OIL & GAS +0.55%
IT -2.52%
METAL -1.81%
FINANCIAL SERVICES -0.42%

Stocks Ban List

(SEBI) F&O ban list (DELTACORP open at +156.40 and close at -155.80), (SAIL open at -122.40 and close at -119.10), (IEX open at -164.10 and close at -163.15), (ZEEL open at +288.00 and close at -285.65), (BALRAMCHIN open at -405.00 and close at +406.40), and (HINDCOPPER open at -269.70 and close at -265.55) 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.

INDUSTOWER, CHAMBLFERT, GNFC, PEL, BHEL, and INDIACEM stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 21400 to 21700 is the Nifty 50 trading range.

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