Market Momentum Continues with Second Day of Gains, Focus on RBI Policy

At the close, the Nifty 50 was at 22,821.40 up by 0.89%

Indian benchmark indices, Nifty50 and Sensex, extended their gains for the second consecutive day on Thursday, opening on a higher note and closing in the green. The Nifty50 index began the day with a gap-up opening around 22,800 and continued to surge throughout the session, reaching above 22,900 before settling at 22,821.40, marking a 0.89% increase or 201.05 points.

Investor sentiment was buoyed by news of the BJP-led National Democratic Alliance securing a third consecutive term, fostering stability in the political landscape. Global stock markets also saw a rise, fueled by expectations of a US rate cut and sustained growth in artificial intelligence.

Despite some volatility during the day, particularly driven by fluctuations in banking stocks, the Nifty index managed to maintain its upward momentum, largely supported by strong performances in the IT sector. This resilience led to a positive close, signaling confidence in the market’s outlook.

Looking ahead, investors remain optimistic about the new coalition government’s potential to provide stability. However, concerns linger regarding the composition of the new cabinet and anticipated policy measures in the upcoming budget. Additionally, market participants eagerly await signals from the Reserve Bank of India’s bi-monthly policy meeting scheduled for June 7. Expectations are for the central bank to maintain the status quo on interest rates, which would likely have a neutral impact on the markets.

Bank Nifty: Up by 0.48%

The Bank Nifty and BSE Sensex both exhibited positive performance during the trading session. The Bank Nifty opened in the green, recording a gain of 0.48 percent, and continued its upward trend throughout the day. Ultimately, it closed at 49,291.90, maintaining its position in the green. Similarly, the BSE Sensex experienced a notable increase, rising by 0.93 percent. It closed at a value of 75,074.51, reflecting the positive sentiment prevailing in the market.

In the sectorial front, the real estate sector experienced significant growth, surging by 4.69%. Among the top performers, Brigade Enterprises Ltd. recorded an impressive increase of 8.76%, and Prestige Estates Projects Ltd. followed closely with a gain of 8.65%.

On the contrary, the Fast-Moving Consumer Goods (FMCG) sector emerged as the biggest loser, slipping by 0.34%. Within this segment, Godrej Consumer Products Ltd. saw a decline of 2.12%, while Hindustan Unilever Ltd. experienced a decrease of 1.83%.

Foreign Institutional Investors (FIIs/FPIs) engaged in significant trading activities during the session, with a buy value of Rs. 13,969.51 crore and a sale value of Rs. 20,837.23 crore. This resulted in a net value of -Rs. 6,867.72 crore, reflecting net selling by foreign investors.

In contrast, Domestic Institutional Investors (DIIs) exhibited a more positive stance, with a buy value of Rs. 17,030.30 crore and a sale value of Rs. 13,311.92 crore. This led to a net value of Rs. 3,718.38 crore, indicating net buying by domestic investors.

Bank Nifty

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

The gainers included State Bank of India with a 3.45% increase, Bank of Baroda with a 3.42% increase, Punjab National Bank with a 1.68% increase, Kotak Bank with a 0.70% increase, and HDFC Bank with a 0.50% increase.

On the other hand, the biggest losers in the sector included IndusInd Bank with a 1.35% decline, AU Bank with a 0.98% decline, Axis Bank with a 0.89% decline, and Federal Bank with a 0.69% decline. These results suggest that most of the banking stocks performed better for the day.

Rupee Weakens Against US Dollar Amidst External Pressures

The Indian rupee experienced a slight depreciation of 5 paise, settling at 83.49 (pro) against the US dollar on Thursday. This decline can be attributed to foreign capital outflows and the upward trajectory of crude oil prices in the global market. However, despite these external pressures, a weakened American currency and a positive trend in the domestic equity markets provided some support to the local currency. Investor sentiment remained cautious ahead of the Reserve Bank of India’s impending monetary policy decision scheduled for Friday.

Throughout the trading session, the rupee opened at 83.40 and touched an intra-day low of 83.50 against the greenback. Ultimately, it closed at 83.49 (pro), marking a 5 paise decrease from its previous closing value.

On the previous day, Wednesday, the rupee had shown a modest improvement, settling 7 paise higher at 83.44 against the dollar. However, the currency depreciated primarily due to surging crude oil prices and selling pressure from foreign institutional investors (FIIs). Despite these challenges, the rupee found support from a weakened US dollar and positive sentiment in the domestic markets.

Meanwhile, the dollar index, measuring the strength of the greenback against a basket of six major currencies, marginally decreased by 0.03% to 104.18. Additionally, Brent crude futures, the global oil benchmark, witnessed a slight increase of 0.31% to $78.65 per barrel, adding to the complexities influencing the rupee’s movement in the forex market.

Stocks Highlights

Tech Mahindra Ltd. Shows Strong Performance Despite Sales Decline

Tech Mahindra Ltd. saw its share price increase by 4.43% from its previous close of Rs 1,266.90, reaching a last traded price of Rs 1,323.00. This positive movement is notable as only 2.11% of trading sessions in the past 17 years have recorded intraday gains exceeding 5%. However, the company experienced a topline contraction with sales declining by 2.47%, marking the first revenue downturn in three years. Despite this, a bullish signal emerged with a 200-day moving average crossover, typically resulting in an average price gain of 5.72% within 30 days over the last five years. Over the past three years, Tech Mahindra has delivered a 24.3% return compared to the Nifty 100’s 47.69%.

Hindalco Industries Ltd. Faces Share Price Decline Amid Sales Drop

Hindalco Industries Ltd. witnessed a share price decrease of 2.37%, falling from Rs 695.25 to Rs 678.75. This decline occurred in a market where only 2.53% of trading sessions over the past 19 years have seen intraday gains above 5%. The company also reported a 3.12% sales decrease, experiencing revenue contraction for the first time in three years. Despite this setback, a recent 20-day moving average crossover suggests a bullish trend, with historical data showing an average price gain of 4.26% within seven days following this signal. Hindalco’s three-year return stands at 75.99%, significantly outperforming the Nifty 100’s 47.69% return.

Advance Decline Ratio

Today, the advance-decline ratio was 5.15, and the market breadth was positive. The volatility index India Vix decreased by 11.04 to settle at 16.80 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 2174
Decliners – 422
52Wk High – 83
52Wk Low – 22
High Band Hitters – 269
Low Band Hitters – 25
200d SMA – 21112
50d SMA – 22444
20d SMA – 22530

Top Gainers and Losers Stocks

The top gainers were Tech Mahindra (+4.43%), HCL Technologies (+3.89%), Shriram Finance (+3.71%), SBI Life (+3.48%), and SBIN (+3.45%).

The top losers were Hindalco (-2.37%), Hero MotoCorp (-2.18%), Hindustan Unilever (-1.83%), Asian Paint (-1.75%), and M&M (-1.53%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+4.69%), Media (+3.68%), IT (+2.83%), Oil & Gas (+2.37%), and Metal (+1.43%).

The top losers sector were FMCG (-0.34%), and Pharma (-0.25%).

SECTORS – NOTABLE ACTION
REALTY +4.69%
MEDIA +3.68%
IT +2.83%
FMCG -0.34%
PHARMA -0.25%

Stocks Ban List

(SEBI) F&O ban list (ZEEL open at +151.00 and close at +153.55) 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.

SAIL, HINDCOPPER, and INDIACEM stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 22600 to 23100 is the Nifty 50 trading range.

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