Nifty 50’s Historic Surge: Are the bulls ready to charge higher on Dalal Street?

At the close, the Nifty 50 was at 25,790.95 up by 1.48%

September 20, 2024. The NSE Nifty 50 has kicked off on a high note, up by 1.48% and closing above 25,700 at 25,790.95. This impressive rally was fueled by the U.S. Federal Reserve’s recent interest rate cut, sparking a wave of optimism in global markets. The realty, auto, and metals sectors have taken the lead in this D-Street frenzy, with broad-based gains across almost all sectors—except for the Nifty PSU Bank.

But what’s behind this bullish momentum? As the Indian benchmark indices reached historic highs, the Nifty surged over 1% on Friday alone. Bulls tightened their grip on Dalal Street on September 20, extending gains for the second consecutive session. The index hit fresh heights of 25,849.25 during the day, showcasing a remarkable 375.15-point gain.

After a week filled with volatility, the Nifty demonstrated an excellent upmove, breaking through the 25,500 trendline resistance. A long bull candle formed on the daily chart, indicating a decisive upside breakout after several sessions of range-bound trading. On the weekly chart, Nifty formed a solid bullish candle, surpassing the congestion area of the last three weeks and closing 1.71% higher.

Bullish Trend

Could this bullish trend continue? The short-term outlook for Nifty is sharply positive, but a consolidation phase may be on the horizon.

The Indian market has joined the global rally in the wake of the 50bps Fed rate cut, positioning itself as a safe haven amid ongoing geopolitical tensions. With increasing foreign inflows expected, especially in rate-sensitive sectors like auto and finance, the outlook appears promising. Conventional sectors, such as FMCG, are also showing robust performance, benefitting from strong demand and reduced input costs.

Interestingly, Nifty has now overtaken China as the largest country in MSCI EM, a significant milestone. This shift illustrates that India is becoming a safe investment destination, even as it navigates challenges like a record account deficit and inflationary pressures.

The upswing is bolstered by forecasts of increased foreign investments into India due to the Fed’s actions. Overnight, U.S. benchmarks surged following strong jobless claims data, reinforcing a positive outlook for global equity markets. The Dow Jones and S&P 500 hit record highs, boosting risk appetite worldwide.

As the markets react to these developments, analysts speculate about the potential influence of the Fed’s pivot on the Reserve Bank of India. Could we see a similar rate cut from the RBI in December? The pressure is mounting, especially as the domestic economy continues its recovery.

What does this mean for investors? With a favorable environment and strong market momentum, now might be the time to reassess investment strategies. Will the bulls maintain control, or are we on the brink of a market correction? Only time will tell!

Bank Nifty: Up by 1.42%

The Bank Nifty kicked off in the green, climbing 1.42%, and wrapped up the day strong at 53,793.20. But that’s not all—BSE Sensex followed suit, surging by 1.63% and closing at a high of 84,544.31.

On the sectorial front, Realty led the charge, posting a remarkable gain of 3.05%. The Phoenix Mills Ltd. has dazzled with a remarkable gain of 9.13%, captivating the attention of analysts and traders alike. Meanwhile, Macrotech Developers Ltd. has also made headlines, showcasing a commendable increase of 7.02%. The absence of any losers in this sector adds to the positive sentiment

Foreign Institutional Investors (FIIs) showed a strong presence, with a buy value of Rs. 59,452.33 crore and a sale value of Rs. 45,388.28 crore, resulting in a net buy value of Rs. 14,064.05 crore. This suggests a robust appetite for investment, signaling confidence in the market.

In contrast, Domestic Institutional Investors (DIIs) faced a different scenario. With a buy value of Rs. 16,987.42 crore and a sale value of Rs. 21,414.50 crore, they recorded a net sell value of Rs. -4,427.08 crore.

Bank Nifty

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

The gainers included ICICI Bank with a 4.47% increase, Kotak Bank with a 2.00% increase, HDFC Bank with a 1.68% increase, Punjab National Bank with a 1.17% increase, and Axis Bank with a 0.58% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 2.99% decline, IDFC First Bank with a 1.35% decline, Bandhan Bank with a 0.70% decline, State Bank of India with a 0.69% decline, and Federal Bank with a 0.36% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 20th September, 2024

Stocks Highlights

Mahindra & Mahindra Ltd. just made a strong move, climbing 5.32% from its previous close of Rs 2,797.50, now trading at Rs 2,946.35. Intraday stats reveal something intriguing—over the last 19 years, only 1.1% of trading sessions saw intraday drops greater than 5%.

But that’s not all. Mahindra’s ROE of 17.02% for the year ending March 31, 2024, crushed its 5-year average of 11.97%. Impressive, right? Over the last three years, the stock delivered a staggering 270.95% return, blowing Nifty 100’s 48.18% return out of the water. Yet, with 5.42% spent on interest expenses and 7.68% on employee costs, is this surge sustainable?

Grasim Industries Ltd. saw a dip of -2.33%, with its stock now at Rs 2,675, down from its previous close of Rs 2,738.95. Surprisingly, only 1.0% of the last 19 years’ trading sessions saw intraday gains higher than 5%.

Grasim’s quarterly revenue fell 10.47%, its lowest in 3 years. Yet, there’s a flicker of hope—yesterday’s 14-day moving average crossover indicates a potential bullish run, with stocks historically gaining an average of 3.39% within 7 days of this signal.

Though its 3-year return of 74.59% outperformed the Nifty 100, can Grasim bounce back from this dip, or is a deeper correction on the horizon?

Advance Decline Ratio

Today, the advance-decline ratio was 1.86, and the market breadth was positive. The volatility index India Vix increased by 2.24 to settle at 12.75 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1779
Decliners – 959
52Wk High – 122
52Wk Low – 37
High Band Hitters – 114
Low Band Hitters – 63
200d SMA – 22906
50d SMA – 24806
20d SMA – 25213

Top Gainers and Losers Stocks

The top gainers were M&M (+5.32%), ICICI Bank (+4.47%), JSW Steel (+3.69%), Larsen & Toubro (+2.97%), and Coal India (+2.84%).

The top losers were Grasim (-2.33%), SBIN (-0.69%), NTPC (-0.22%), IndusInd Bank (-0.19%), and Hero MotoCorp (-0.10%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+3.05%), Auto (+1.88%), Metal (+1.65%), Financial Services (+1.58%), and FMCG (+1.38%).

SECTORS – NOTABLE ACTION
REALTY +3.05%
AUTO +1.88%
METAL +1.65%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at -539.90), (CHAMBLFERT close at +481.00), (OFSS close at +11371.60), (NATIONALUM close at +184.03), (SAIL close at -126.28), (BIOCON close at +365.35), (GNFC close at +644.60), (PNB close at +108.41), (LICHSGFIN close at +667.80), (AARTIIND close at +573.80), (RBLBANK close at +212.84), and (BSOFT close at +631.35) 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.

HAL, IDEA, DIXON, IDFCFIRSTB, NMDC, PEL, TATACHEM, ABFRL, IRCTC, MANAPPURAM, HINDCOPPER, CANBK, BANDHANBNK, GMRINFRA, CANFINHOME, and BANKBARODA stocks has the possibilities of entrance in the ban list.

RBLBANK, and BSOFT has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 25400 to 26100 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Will Nifty’s Historic Rally Unravel After the Fed’s Bold Move? What’s Next for the Market?
Is the Nifty signaling a hidden shift before the FOMC decision? What’s lurking in the charts?

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