A Day of Volatility and Caution—Is Nifty’s Downward Spiral Continuing?

At the close, the Nifty 50 was at 24,781.10 down by 0.29%

Today, the NSE Nifty 50 started with promise, opening in the green, but close down by 0.29%, finishing the session at 24,781.10—below the critical 24,800 mark. What led to this rapid reversal?

The Indian stock markets faced pressure as investors began to book profits amid the ongoing Q2 earnings season. Initially buoyed by positive global cues, the market quickly lost its momentum, trading flat during the first half before experiencing extreme volatility in the latter half of the day.

A small reasonable candle formed on the daily chart, complete with a minor lower shadow, signaling a lack of strength in the market to sustain an upward bounce. Is this a precursor to more challenges ahead? The broader market has been trapped in a high-low range for several weeks, indicating uncertainty.

After a smart recovery in the previous session, the market succumbed to selling pressure, particularly across most sectors except for auto. At one point, the Nifty had dipped over 170 points, showcasing the fierce tug-of-war between bulls and bears.

As the Nifty faced resistance at the 25,000 mark, where a high concentration of open interest exists on the call side, it became clear that maintaining gains would be challenging. Meanwhile, the 20-week average at 24,730, which was defended well last week, is now being tested once again. How will the market navigate this critical juncture?

“Nifty’s overall trend remains weak within a range-bound movement,” analysts warn, as the index may retest lower levels between 24,600 and 24,500 in the near term. Despite failing to hold onto its initial gains, the Nifty managed to remain above the neckline of the Head and Shoulders pattern, a crucial technical indicator.

With cash market volumes on the NSE rising by 13% to Rs. 1.03 lakh crore, and broad market indices showing mixed results, the investor sentiment remains precarious. Will the combination of strategic selling from FIIs in India and underwhelming domestic Q2 earnings create further headwinds?

In a broader context, Asian shares displayed mixed results after US markets climbed, while concerns in China’s stock market intensified following reports of additional government borrowing to support the economy. With foreign institutional investors (FIIs) pivoting towards strategic buying in China and retreating from India, the question remains: What will this mean for India’s financial landscape moving forward?

As the market grapples with these dynamics, it’s clear that investors should remain vigilant, watching for any signs of recovery or further declines in this choppy terrain. The path ahead may be fraught with uncertainty, but opportunities often emerge from volatility.

Bank Nifty: Down by 0.25%

The Bank Nifty kicked off the day on a positive note, opening in the green with high hopes, but ultimately closed down by 0.25% at 51,962.70. Despite a promising start with a significant gap up, it struggled to maintain its momentum, trading with a negative bias throughout the day. In a similar vein, the BSE Sensex also faced challenges, slipping 0.09% and closing at a low of 81,151.27.

On the sectorial front, the Auto sector revs its engines, gaining a solid 0.42% overall. Leading the charge is Bajaj Auto Ltd., which has surged by an impressive 4.34%! Hot on its heels, Mahindra & Mahindra Ltd. has also cruised ahead, clocking in a respectable 1.17% gain.

In stark contrast, the Media sector is feeling the heat, plunging to become the top loser with a decline of -2.83%. Saregama India Ltd. bears the brunt of this downturn, plummeting by -5.35%, while Zee Entertainment Enterprises Ltd. isn’t far behind, dropping by -4.86%.

FIIs recorded a buy value of Rs. 11,982.70 crore but faced a sell value of Rs. 14,244.53 crore, leading to a net outflow of Rs. -2,261.83 crore.

DIIs showcased resilience, with a buy value of Rs. 13,741.13 crore and a sell value of Rs. 10,515.22 crore, resulting in a net inflow of Rs. 3,225.91 crore.

Bank Nifty

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

The gainers included HDFC Bank with a 2.57% increase.

On the other hand, the biggest losers in the sector included Kotak Bank with a 4.73% decline, IndusInd Bank with a 3.03% decline, AU Bank with a 2.69% decline, IDFC First Bank with a 1.94% decline, and Canara Bank with a 1.84% decline . These results suggest that almost all of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 21st October, 2024

Rupee Holds Steady Amid Global Challenges: What Lies Ahead?

The Indian rupee has ended the day flat at 84.07 against the US dollar, navigating through a sea of economic uncertainty. Why has the rupee settled at this level?

On Monday, the rupee found itself in a stalemate, staying unchanged from the previous session as it faced the headwinds of a strong American currency and relentless foreign fund outflows. Investors are treading cautiously, pulling back from riskier assets amid escalating geopolitical tensions. What’s driving this cautious sentiment in the market?

At the interbank foreign exchange market, the rupee opened slightly higher at 84.06, but failed to gain any momentum throughout the session, ultimately settling at 84.07. This marks a minor slip of 1 paisa from Friday’s closing, yet it’s a slight recovery from its all-time low of 84.09 recorded on August 5. Will this hold steady, or is there more volatility on the horizon?

In the backdrop, the dollar index, which measures the greenback’s strength against a basket of six major currencies, rose by 0.19% to 103.50. Meanwhile, Brent crude prices have surged 1.42%, reaching USD 74.10 per barrel in futures trade. What impact will rising crude prices have on the rupee moving forward?

As the global landscape shifts, all eyes are on the rupee’s performance. Will it break free from the current constraints, or are we in for a turbulent ride? Stay tuned for more updates as this story unfolds!

Stocks Highlights

Bajaj Auto Ltd. has sparked curiosity on the stock market with a striking 4.34% surge from its previous close of Rs. 10,063.95, closing at Rs. 10,501.00. But lurking beneath this rise is a sudden twist: the company is now facing outstanding debt obligations for the first time in five years. What does this mean for investors? Despite the debt concerns, Bajaj Auto is not backing down. The company has posted an impressive annual revenue growth of 23.02%, smashing its 3-year CAGR of 16.68%. But wait—could this growth be overshadowed by emerging threats?

A Warning Bell: Sell Signal?

The market is buzzing with speculation after a Weekly MACD crossover appeared on the week ending October 18, 2024. Historically, this signal has preceded an average price decline of -4.46% within just seven weeks in the last decade. Are we witnessing a shift that could tip the scales in favor of the bears?

In the Spotlight: Bajaj Auto vs. Nifty 100

Over the past three years, Bajaj Auto has dazzled investors with a remarkable 157.0% return, while the Nifty 100 managed a mere 37.53%. But with new challenges on the horizon, can this trend continue?

In stark contrast, Tata Consumer Products Ltd. has taken a nosedive, with a -7.08% drop from its previous close of Rs. 1,093.25, now trading at Rs. 1,015.90. But what lies behind this decline?

The company reported a QoQ revenue decline of 2.98%, marking the lowest performance in three years. Is this a sign of deeper troubles ahead?

The Numbers Speak: Stock Returns vs. Nifty 100

In a disheartening comparison, Tata Consumer has yielded only a 29.54% return over the last three years, trailing behind the Nifty 100’s 37.53%.

Cost Management Under Scrutiny: Despite the downturn, Tata has kept its operating costs in check, allocating less than 1% of its revenues towards interest expenses and 8.28% for employee costs in the year ending March 31, 2024.

Advance Decline Ratio

Today, the advance-decline ratio was 0.31, and the market breadth was negative. The volatility index India Vix increased by 6.42 to settle at 13.88 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 666
Decliners – 2130
52Wk High – 102
52Wk Low – 69
High Band Hitters – 112
Low Band Hitters – 156
200d SMA – 23322
50d SMA – 25118
20d SMA – 25322

Top Gainers and Losers Stocks

The top gainers were Bajaj Auto (+4.34%), HDFC Bank (+2.57%), Asian Paint (+1.70%), M&M (+1.17%), and Eicher Motors (+0.68%).

The top losers were Tata Consumer (-7.08%), Kotak Bank (-4.73%), Bajaj Finserv (-3.37%), BPCL (-3.36%), and IndusInd Bank (-3.03%).

Top Gainers and Losers Sectors

The top gainers sector were Auto (+0.42%), Financial Services (+0.07%).

The top losers sector were Media (-2.83%), Metal (-1.51%), Realty (-1.40%), IT (-1.29%), FMCG (-1.25%).

SECTORS – NOTABLE ACTION
AUTO +0.42%
FINANCIA LSERVICES +0.07%
MEDIA -2.83%
METAL -1.51%
REALTY -1.40%

Stocks Ban List

(SEBI) F&O ban list (BSOFT close at +597.35), (AARTIIND close at -510.25), (BANDHANBNK close at -184.89), (IEX close at -187.11), (LTF close at -157.82), (GNFC close at -639.80), (TATACHEM close at +1189.00), (CHAMBLFERT close at -487.25), (PNB close at -102.29), (HINDCOPPER close at -316.70), (GRANULES close at -590.80), (SAIL close at -126.46), (IDFCFIRSTB close at -70.40), and (NATIONALUM close at -230.00) 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.

EXIDEIND, ESCORTS, INDIAMART, ABFRL, PEL, NMDC, GMRINFRA, LICHSGFIN, CANBK, OBEROIRLTY, BIOCON stocks has the possibilities of entrance in the ban list.

PNB, HINDCOPPER, GRANULES, SAIL, IDFCFIRSTB, and NATIONALUM stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 24500 to 25100 is the Nifty 50 trading range.

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