Will Fed Rate Cuts Tame Inflation Amidst Job Market Concerns?

At the close, the Nifty 50 was at 24,324.45 down by 0.45%

Today, the NSE Nifty 50 index experienced a tumultuous session, starting in the red and closing down by 0.45%. Despite touching a fresh record high early in the day, the index couldn’t sustain its gains and faced extended selling pressure. Nifty closed at 24,324.45, down 108.75 points, reflecting the broad-based profit booking and rising uncertainties over a potential interest rate cut by the US Federal Reserve.

Equity markets were weighed down significantly as investors booked profits after recent highs. Nifty formed a bearish engulfing pattern on the daily chart, indicating a potentially bearish trend, though it managed to stay above the immediate support level of the 10-day EMA around 24,180. The opening trade saw a steep fall in Mid and Smallcap segments, contributing to an over 200-point loss in the index. However, buying at lower levels helped recover some intraday losses, but not enough to end the day positively.

The decline was also influenced by global factors. US Federal Reserve Chair Jerome Powell’s testimony highlighted a significant cooling in the US job market, reinforcing expectations of an interest rate adjustment later this year, possibly in September. This uncertainty added to the weak sentiment in domestic equities.

Investors are now focusing on the upcoming Q1 results and the 2024 Budget, looking for cues on future market direction. The recent highs in the market have led to stretched valuations, prompting investors to reassess their portfolios and trim exposure to riskier stocks ahead of the earnings season and budget announcements.

In summary, while Nifty failed to hold its record high, the uptrend remains intact above 24,200 points. Market participants will be closely monitoring upcoming economic data and corporate earnings to gauge the sustainability of recent gains.

Bank Nifty: Down by 0.72%

Bank Nifty and BSE Sensex faced downward pressure, both starting in the red and closing with losses. The Bank Nifty opened lower by 0.72%, concluding the session at 52,189.30. Similarly, the BSE Sensex began with a decline of 0.53% and closed at 79,924.77. This downturn in key indices reflects broader market sentiments influenced by domestic and global economic factors.

In the sectorial front, the pharmaceutical sector emerged as a clear winner, surging by a commendable 0.39%. Leading the pack was Mankind Pharma Ltd., whose stocks witnessed an impressive rise of 2.40%. Zydus Lifesciences Ltd. also joined the party, with a noteworthy gain of 1.93%. These positive movements indicate investor confidence in the pharmaceutical industry’s potential.

On the flip side, the automobile sector encountered a rough patch, shedding a substantial 2.02%. This decline can be attributed to the performance of individual companies within the sector. Mahindra & Mahindra Ltd. bore the brunt of the selling pressure, with their stocks plummeting by a concerning 6.69%. Exide Industries Ltd. also experienced a setback, with their share prices dropping by 2.03%.

FIIs/FPIs recorded a buy value of Rs. 17,464.23 crore and a sale value of Rs. 16,880.27 crore, resulting in a net investment of Rs. 583.96 crore.

On the other hand, DIIs demonstrated robust buying with a total buy value of Rs. 15,152.85 crore against sales of Rs. 14,070.45 crore, leading to a net investment of Rs. 1,082.40 crore.

Bank Nifty

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

The gainers included Federal Bank with a 0.56% increase, and Axis Bank with a 0.13% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 4.16% decline, Punjab National Bank with a 2.54% decline, Bank of Baroda with a 1.82% decline, AU Bank with a 1.47% decline, and State Bank of India with a 1.31% decline. These results suggest that most of the banking stocks not performed better for the day.

Gold and Silver

Today 22 Carat Gold Price Per Gram in India (INR)

Today 24 Carat Gold Price Per Gram in India (INR)

Today Silver Price 1 Gram/KG in India (INR)

Rupee Holds Steady Despite Headwinds: A Balancing Act

The Indian rupee (INR) held its ground against the US dollar (USD) today, despite some challenges.

Rising crude oil prices overseas, a negative factor for the rupee, were balanced by a weakening US dollar and foreign fund inflows. This kept the rupee trading in a narrow range throughout the day.

A Flat Start and a Small Dip:

The rupee opened flat at Rs. 83.49 against the USD and remained relatively stable throughout the session. It finally settled at Rs. 83.51, a slight decline of 2 paise from yesterday’s closing.

Experts expect the rupee to trade with a slight downward bias tomorrow due to a potential weakness in the domestic stock market and a possible strengthening of the dollar. Investor caution is likely ahead of key events like Fed Chair Jerome Powell’s testimony and inflation data release in the US.

The USD-INR spot price is expected to trade between Rs. 83.20 and Rs. 83.80 tomorrow, reflecting continued volatility.

The dollar index, a measure of the dollar’s strength against other major currencies, edged down slightly, easing some pressure on the rupee. However, rising Brent crude oil prices, a key import for India, could put upward pressure on the rupee in the coming days.

Overall, the rupee displayed resilience today despite some headwinds. However, the coming days may see increased volatility depending on global cues and domestic events.

Stocks Highlights

Asian Paints Gets a Fresh Coat of Green

Good news for Asian Paints investors! The company’s share price jumped 3.27%, closing at Rs. 3,000. This positive movement comes despite a recent technical sell signal. Here’s a closer look:

• Financially Fit: Asian Paints keeps a tight ship, spending less than 1% of its revenue on interest and a reasonable 6.55% on employee costs. This financial discipline could be contributing to investor confidence.
• Past Performance: While the 3-year return may not be stellar, there’s always hope for the future. Investors will be watching closely to see if Asian Paints can outperform the Nifty 100.

Mahindra & Mahindra Hits a Bump

It wasn’t such a smooth ride for Mahindra & Mahindra. Their share price took a tumble, dropping 6.69%. However, there are some bright spots to consider:

• Outperforming the Past: Despite the dip, Mahindra & Mahindra boasts a strong return on equity (ROE) of 17.02%, exceeding their 5-year average. This indicates healthy profitability.
• Potential for Rebound: A recent technical buy signal suggests a possible price increase in the coming days. Investors keeping an eye on Mahindra & Mahindra might see a quick turnaround.

Advance Decline Ratio

Today, the advance-decline ratio was 0.46, and the market breadth was negative. The volatility index India Vix increased by 0.66 to settle at 14.38 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 837
Decliners – 1837
52Wk High – 145
52Wk Low – 18
High Band Hitters – 70
Low Band Hitters – 123
200d SMA – 21602
50d SMA – 23112
20d SMA – 23888

Top Gainers and Losers Stocks

The top gainers were Asian Paint (+3.27%), SBI Life (+2.05%), Divi’s Laboratories (+1.63%), Britannia (+1.58%), and Grasim (+1.38%).

The top losers were M&M (-6.69%), Hindalco (-2.11%), Tata Steel (-2.10%), TCS (-1.77%), and HCL Technologies (-1.63%).

Top Gainers and Losers Sectors

The top gainers sector were Pharma (+0.39%), FMCG (+0.28%), and Oil & Gas (+0.05%).

The top losers sector were Auto (-2.02%), Media (-1.76%), Metal (-1.61%), IT (-1.03%), and Financial Services (-0.27%).

SECTORS – NOTABLE ACTION
PHARMA +0.39%
FMCG +0.28%
OIL & GAS +0.05%
AUTO -2.02%
MEDIA -1.76%
METAL -1.61%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at +431.00 and close at +436.55), (INDIACEM open at +282.25 and close at +295.85), (CHAMBLFERT open at -513.00 and close at -500.60), (GNFC open at -704.45 and close at -687.20), (IEX open at +182.95 and close at -176.12), (INDUSTOWER open at +386.70 and close at -382.90), (PEL open at -922.70 and close at -908.70), (BANDHANBNK open at -201.52 and close at -192.43), and (ABFRL open at -323.40 and close at +325.55) 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.

GMRINFRA, RBLBANK, IDFCFIRSTB, TATACHEM, SAIL, IDEA, IRCTC, NMDC, and BSOFT stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 24000 to 24550 is the Nifty 50 trading range.

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