Nifty’s Five Days of Fear-Will the Selling Ever End?

At the close, the Nifty 50 was at 24,406.10 down by 0.03%

Today, the NSE Nifty 50 had a turbulent session, starting in the red and closing down by 0.03 percent, finishing below the 24,450 mark. This marked the fifth consecutive session of profit booking, with the Nifty closing around 24,400 amidst the volatility of F&O expiry day.

Despite weak global cues, the Indian indices opened on a negative note and extended their losses. However, buying at lower levels aided recovery, resulting in marginal losses. At close, the Nifty was down 7.40 points or 0.03 percent at 24,406.10. After a sharp decline of over 150 points at the open, the index saw a one-way recovery throughout the day, limiting losses to just 7.40 points by the end of the session.

The Nifty 50 demonstrated resilience, defending the 24,400 mark for the fourth consecutive session despite a weak opening. The index managed to hold the 20-day Simple Moving Average (24,373) for the third straight session, suggesting a potential uptrend continuation. However, the Bank Nifty underperformed.

Mid and small-cap stocks recovered from their morning lows but still underperformed compared to the benchmark index. Heavy foreign fund outflows, driven by a hike in securities transaction tax and short-term capital gains tax, negatively impacted market sentiment. Nonetheless, the government’s focus on boosting consumption and supporting energy transition provided some positive sectoral sentiment.

As we witness a counter-trend pullback, could this recovery extend towards the 24,500 – 24,550 range, aligning with the 61.82 percent Fibonacci retracement level? Will the resilience of Nifty 50 continue to hold strong amidst global uncertainties?

Bank Nifty: Down by 0.83%

The Bank Nifty faced a rough start today, opening down by 0.83% and ultimately closing in the red at 50,888.75. This dip in the banking sector was mirrored by the BSE Sensex, which also ended on a low note, falling 0.14% to settle at 80,039.80.

In the sectorial front, the Oil & Gas sector surged ahead, gaining a notable 2.22%. This remarkable rise was led by Hindustan Petroleum Corporation Ltd., which saw an impressive increase of 5.72%. Hot on its heels was Oil India Ltd., posting a significant gain of 5.24%.

On the flip side, the Metals sector took a hit, dropping by 1.29%. Among the hardest hit were Welspun Corp Ltd., which plummeted by 4.84%, and Hindustan Zinc Ltd., which decreased by 4.11%.

Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) reported a buy value of Rs. 14,682.92 crore and a sale value of Rs. 17,288.41 crore, resulting in a net outflow of Rs. 2,605.49 crore.

In contrast, Domestic Institutional Investors (DII) displayed a more bullish stance, with a buy value of Rs. 15,760.02 crore and a sale value of Rs. 13,328.33 crore, leading to a net inflow of Rs. 2,431.69 crore.

Bank Nifty

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

The gainers included Kotak Bank with a 1.83% increase, Federal Bank with a 1.77% increase, Punjab National Bank with a 1.07% increase, and HDFC Bank with a 0.79% increase.

On the other hand, the biggest losers in the sector included Axis Bank with a 5.08% decline, AU Bank with a 4.67% decline, ICICI Bank with a 2.14% decline, Bank of Baroda with a 1.31% decline, and IDFC First Bank with a 1.27% decline. These results suggest that some of the banking stocks not performed better for the day.

Gold and Silver

Rupee Hits New Low: Market and Policy Pressures Take Their Toll

On Thursday, the Indian rupee opened on a weak note and plunged to an all-time low of 83.72 against the US dollar. This drop was fueled by the strength of the American currency and substantial foreign fund outflows. The rupee’s decline follows a sharp downturn in the Indian equity markets, triggered by the government’s recent decision to increase the capital gains tax rate.

At the interbank foreign exchange market, the rupee traded within a narrow range, beginning at its record low of 83.72, marking a slight decrease of 1 paisa from the previous close. The rupee had already depreciated by 2 paise on Wednesday, reaching a closing low of 83.71 against the dollar.

Adding to the market strain, the dollar index stood at 104.21, down by 0.17%, while Brent crude futures fell 0.75% to $81.10 per barrel.

Will the rupee continue its downward spiral, or is there a glimmer of hope for recovery amid these mounting pressures?

Stocks Highlights

Tata Motors Ltd. witnessed a remarkable surge, with its share price climbing by 5.97% from its previous close of Rs 1,027.70 to a last traded price of Rs 1,089.05. This upswing was driven by the company’s impressive return on equity (ROE) of 36.97% for the year ending March 31, 2024, which significantly outperformed its five-year average of -1.07%.

Additionally, Tata Motors achieved a robust annual revenue growth of 26.61%, surpassing its three-year compound annual growth rate (CAGR) of 20.47%. A bullish signal emerged with a 14-day moving average crossover, historically leading to an average price gain of 4.39% within seven days over the past five years.

In contrast, Axis Bank Ltd. faced a setback, with its share price dropping by 5.08% from its previous close of Rs 1,239.25 to Rs 1,176.25. Despite reporting a year-over-year (YoY) increase of 15.08% in its loan book, outperforming its five-year CAGR of 11.38%, and an annual revenue growth of 29.99%, exceeding its three-year CAGR of 19.29%, the bank encountered a bearish signal.

A 20-day moving average crossover on July 23, 2024, historically leads to an average price decline of -2.54% within seven days over the past five years.

Advance Decline Ratio

Today, the advance-decline ratio was 0.94, and the market breadth was negative. The volatility index India Vix increased by 7.26 to settle at 12.62 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1288
Decliners – 1366
52Wk High – 156
52Wk Low – 12
High Band Hitters – 172
Low Band Hitters – 44
200d SMA – 21839
50d SMA – 23544
20d SMA – 24373

Top Gainers and Losers Stocks

The top gainers were Tata Motors (+5.97%), ONGC (+4.83%), BPCL (+3.67%), SBI Life (+3.62%), and Larsen & Toubro (+2.91%).

The top losers were Axis Bank (-5.08%), Nestle India (-2.50%), ICICI Bank (-2.14%), Titan (-2.11%), and Tata Steel (-1.75%).

Top Gainers and Losers Sectors

The top gainers sector were Oil & Gas (+2.22%), Auto (+1.26%), Pharma (+0.94%), and Media (+0.81%).

The top losers sector were Metal (-1.29%), Consumer Durables (-0.84%), Realty (-0.83%), Financial Services (-0.50%), and IT (-0.15%).

SECTORS – NOTABLE ACTION
OIL & GAS +2.22%
AUTO +1.26%
PHARMA +0.94%
METAL -1.29%
CONSUMER DURABLES -0.84%
REALTY -0.83%

Stocks Ban List

(SEBI) F&O ban list (INDIACEM open at -345.00 and close at +361.50), and (IDEA open at -15.30 and close at -15.18) 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.

BANDHANBNK, IDFCFIRSTB, INDUSTOWER, MANAPPURAM, VEDL, ABFRL, OFSS, and BIOCON stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 24150 to 24600 is the Nifty 50 trading range.

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