Weak IT Earnings Lead Nifty to Settle Lower for 3rd Day

At the close, the Nifty 50 was at 17,618.75 down by 0.23%

The NSE Nifty 50 index commenced its trading session on a subdued note, with a downward movement of 0.23 percent and ultimately concluded the day with losses, finishing in the red. Furthermore, the index slipped below the crucial 17700 mark.

On Wednesday, Indian stocks experienced a decline, with a notable dip in information technology (IT) shares. This drop comes amidst a subdued beginning to the quarterly earnings season, leading to a weak market sentiment. HCLTech and Infosys were the top losers on the Nifty 50, each experiencing a loss of nearly 2%. HCLTech is scheduled to report its quarterly earnings on Thursday. The lacklustre fourth-quarter performance of IT firms has made investors anxious.

Over the course of this week, the Nifty 50 has experienced a decline of more than 1%, with losses recorded in the preceding two sessions. On Monday, a bearish engulfing pattern emerged on the daily charts, indicating a bearish bias in the short term.

Bank Nifty: Down by 0.26%

At the beginning of the trading session, the Bank Nifty index made a positive start but eventually ended the day on a negative note, declining by 0.26 percent and closing at 42,154.00. In the same vein, the BSE Sensex index also witnessed a downward trend, with a decrease of 0.27 percent and finishing the day in the red zone, reaching a low of 59,567.80.

On the sectoral front, the information technology and power indices experienced a decline of 1% each. However, there was a surge in buying activity for metal, oil & gas, and pharma stocks.

The Nifty IT sector has witnessed a decline of 1.77%, with several companies experiencing losses. COFORGE has seen a decrease of 3.33%, followed by LTIM with a decrease of 3.00%, HCLTECH with a decrease of 2.48%, INFY with a decrease of 2.26%, WIPRO with a decrease of 1.81%, and TCS with a decrease of 1.33%.

Bank Nifty

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

The gainers included Axis Bank with a 1.00% increase, HDFC Bank with a 0.55% increase, Bandhan Bank with a 0.33% increase. On the other hand, the biggest losers in the sector included IndusInd Bank with a 2.45% decline, AU Bank with a 2.06% decline, Punjab National Bank with a 1.43% decline, State Bank of India with a 1.18% decline, and ICICI Bank with a 0.53% decline. These results suggest that some banking stocks not performed better for the day.

Buzzing

The Nifty began the session without any significant change and remained negative throughout, eventually closing at 17619 levels with a loss of 41 points. While the IT sector continued to face pressure, the specialty chemicals sector showed promise due to attractive valuations and expectations of improved export demand.

A report by research agency Fitch Solutions indicated that the global market is set to see its biggest shortfall in rice in two decades this year, leading to a rally in rice-producing companies. Despite gaining for nine consecutive trading sessions, the Nifty has been consolidating below the 17800 zones for the past three days. Net selling by foreign institutional investors has added to the overall weakness. The market is currently stagnant due to a lack of major triggers, although there is some sector-specific momentum in the broader market, particularly in pharma, specialty chemicals, sugar, rice, and realty. We anticipate this momentum to persist over the next few days.

On Wednesday, the Indian rupee fell 18 paise and closed at 82.22 (provisional) against the US dollar. The currency was affected by a strong greenback overseas and a negative trend in domestic equities, according to forex traders. The local unit was further impacted by foreign fund outflows and firm crude oil prices.

Although the markets have witnessed foreign institutional investors reducing their equity exposure over the past few sessions, the recent disappointing earnings report from select frontline IT companies has been a source of concern. This has resulted in broad-based selling, particularly in IT stocks.

Buzz

India achieved a record-breaking milestone in 2022, exporting 22.26 million tonnes of rice with an annual growth rate of 3.5%. On April 19, shares of rice-producing companies saw significant gains following a report by research agency Fitch Solutions, which revealed that the global market for rice will experience its largest shortfall in two decades this year.

Due to the rising temperatures and supply disruptions caused by the Russia-Ukraine war and the Covid pandemic, rice production has been decreasing globally. The sanctions on Moscow have further worsened the situation. As a result, rice prices have significantly increased. According to the recent report by Fitch Solutions Country Risk and Industry Research, the prices of rice are expected to remain high until 2024.

Advance Decline Ratio

Today, the advance-decline ratio was 0.88, and the market breadth was negative. The volatility index India Vix increased by 0.64 percent to settle at 12.15 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1053
Decliners – 1200
52Wk High –  46
52Wk Low – 10
High Band Hitters – 72
Low Band Hitters – 32
200d SMA – 17578
50d SMA – 17509
20d SMA – 17364

Top Gainers and Losers Stocks

The top gainers were BPCL (+2.39%), Divi’s Laboratories (+1.96%), Bajaj Auto (+1.32%), Axis Bank (+1.00%), and M&M (+0.89%).

The top losers were HCL Technologies (-2.48%), IndusInd Bank (-2.45%), Infosys (-2.26%), SBI Life (-1.97%), and NTPC (-1.85%).

Top Gainers and Losers Sector

The top gainers sectors were Metal (+0.53%), Oil & Gas (+0.21%), Realty (+0.16%), Pharma (+0.14%), and Consumer Durables (+0.07%).

The top losers sectors were IT (-1.77%), Media (-1.71%), FMCG (-0.25%), and Auto (-0.02%).

The Nifty Midcap 50 was down by 0.21 percent, while the Nifty Small Cap 50 was down by 0.60 percent on the day.

The Nifty Midcap 50 index currently closed at 8,753.45, while the Nifty Small Cap 50 index currently closed at 4,277.00.

SECTORS – NOTABLE ACTION
METAL +0.53%
OIL & GAS +0.21%
REALTY +0.16%
IT -1.77%
MEDIA -1.71%
FMCG -0.25%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at 410.00 and close at 420.45) and (DELTACORP open at 193.45 and close at 190.55) is not currently on the stock exchange.

The Securities and Exchange Board of India (SEBI) has banned BALRAMCHIN and DELTACORP from trading in the futures and options (F&O) segment of 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.

IBULHSGFIN and ZEEL have the possibility of being added to the ban list.

There is a possibility for DELTACORP to be removed from the ban list.

Daily Pivots

As per the above pivots data, 17570 to 17670 is the Nifty 50 trading range.

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