After Powell’s Hint? Will the Nifty 50’s Rally Continue or Is a Twist Around the Corner?

At the close, the Nifty 50 was at 25,010.60 up by 0.76%

August 26 The NSE Nifty 50 has staged an impressive comeback, opening in the green and closing with a gain of 0.76%, landing at a solid 25,010.60. This surge, ignited by a dovish hint from US Federal Reserve Chair Jerome Powell about potential interest rate cuts, has propelled the index back above the crucial 25,000 mark. The day’s trading was marked by a powerful bullish candle, not only bridging the bearish gap from August 2 but also inching closer to its record high.

Following an initial burst, the Nifty settled into a tight range, a sign of stability and investor confidence. This calm was supported by a decrease in volatility, with the India VIX up by 1.78% to 13.80 but still comfortably below key moving averages and the critical 15 threshold. This environment seems ripe for bullish sentiment, hinting at a possible rise towards 25,400 if the index maintains its current trajectory.

Large-cap stocks led the charge, outperforming their smaller counterparts, thanks to healthy earnings and attractive valuations. The rally was bolstered by a turnaround in Foreign Institutional Investors (FIIs) sentiment from negative to positive and strong inflows from Domestic Institutional Investors (DIIs). A positive global mood, driven by anticipated US Fed rate cuts leading to lower US Treasury yields and a weaker dollar index, further fueled the market.

Sectors like IT, Realty, FMCG, and Consumption saw gains due to an improved outlook, amplifying the broad-based rally. As the Nifty 50 continues its ascent, the burning question remains: will this momentum persist, or are we on the brink of a market twist? Keep your eyes peeled on upcoming sessions—will the index soar to new heights or face a potential pullback? Stay tuned for the next chapter in this market saga.

Bank Nifty: Up by 0.42%

Bank Nifty and the BSE Sensex ending in the green. The Bank Nifty began the day positively, rising by 0.42% and closing at 51,148.10. This uptick reflects investor optimism in the banking sector, buoyed by favorable economic indicators and market sentiment.

Meanwhile, the BSE Sensex also enjoyed a strong day, climbing 0.75% to close at a remarkable 81,698.11.

In the sectorial front, Metals emerged as the star of the day, gaining a substantial 2.16%. Leading the charge were National Aluminium Company Ltd. and Steel Authority of India Ltd., both of which recorded impressive gains of 4.97% and 4.47%, respectively.

However, the media sector faced a challenging day, shedding 0.22%. Tips Industries Ltd. and Network18 Media & Investments Ltd. bore the brunt of the decline, losing 3.19% and 2.45% each.

FIIs made purchases worth Rs. 12,749.26 crores while selling stocks valued at Rs. 12,265.90 crores, leading to a net inflow of Rs. 483.36 crores.

On the other hand, DIIs displayed a more aggressive buying stance. They bought stocks worth Rs. 13,045.47 crores and sold shares totaling Rs. 11,175.25 crores, resulting in a strong net inflow of Rs. 1,870.22 crores.

Bank Nifty

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

The gainers included AU Bank with a 1.15% increase, HDFC Bank with a 0.92% increase, ICICI Bank with a 0.86% increase, Axis Bank with a 0.49% increase, and State Bank of India with a 0.01% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 0.81% decline, Kotak Bank with a 0.45% decline, IndusInd Bank with a 0.44% decline, Bank of Baroda with a 0.40% decline, and Federal Bank with a 0.21% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 26th August, 2024

Rupee Remains Steady Amidst Global Fluctuations

The Indian rupee concluded the trading day on a flat note, closing 1 paisa higher at 83.89 against the US dollar. While the rupee initially gained momentum, driven by a strong domestic market and a weakening US dollar, a spike in crude oil prices capped its upward movement.

At the interbank foreign exchange market, the rupee opened at 83.83 and reached an intra-day high of 83.80 before settling at 83.89. This slight appreciation follows a 3-paisa gain on Friday.

Meanwhile, the dollar index, which measures the US dollar’s strength against a basket of six currencies, rose 0.07% to 100.78. The US dollar had experienced a significant decline due to dovish comments from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium.

The rupee’s stability amidst these global fluctuations reflects the Indian economy’s resilience and the market’s confidence in the country’s economic prospects. As the global landscape continues to evolve, investors will be closely monitoring the rupee’s movement and its impact on various sectors of the Indian economy.

Stocks Highlights

HCL Technologies demonstrated a strong bullish sentiment, with its share price climbing by 4.24%. This positive movement was further reinforced by a weekly stochastic crossover, a technical indicator often used by traders to identify potential buy signals. Over the past decade, stocks exhibiting similar signals have historically experienced an average price gain of 6.44% within seven weeks.

Despite its recent rise, HCL Technologies’ three-year return of 44.11% fell short of the Nifty 100’s performance. However, it outperformed the Nifty IT index, indicating a stronger relative performance within the IT sector. From a financial perspective, HCL Technologies’ prudent management is evident in its low interest expenses and substantial investment in employee costs, suggesting a focus on growth and talent development.

In contrast, Apollo Hospitals Enterprise Ltd. experienced a marginal decline of 1.18%. While its three-year return of 41.73% exceeded the Nifty 100, it lagged behind the BSE Healthcare index, suggesting that the company might be facing sector-specific challenges. Apollo Hospitals’ financial profile reveals a slightly higher allocation to interest expenses and a lower employee cost ratio compared to HCL Technologies.

Advance Decline Ratio

Today, the advance-decline ratio was 1.11, and the market breadth was positive. The volatility index India Vix increased by 1.78 to settle at 13.80 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1447
Decliners – 1298
52Wk High – 225
52Wk Low – 21
High Band Hitters – 168
Low Band Hitters – 70
200d SMA – 22375
50d SMA – 24310
20d SMA – 24553

Top Gainers and Losers Stocks

The top gainers were HCL Technologies (+4.24%), Hindalco (+3.96%), NTPC (+3.22%), ONGC (+2.96%), and Bajaj Finserv (+2.64%).

The top losers were Apollo Hospitals (-1.18%), Hero MotoCorp (-0.74%), Adani Ports (-0.69%), Grasim (-0.64%), and Eicher Motors (-0.59%).

Top Gainers and Losers Sectors

The top gainers sector were Metal (+2.16%), Realty (+1.76%), IT (+1.39%), Consumer Durables (+1.30%), and Oil & Gas (+1.16%).

The top losers sector were Media (-0.22%).

SECTORS – NOTABLE ACTION
METAL +2.16%
REALTY +1.76%
IT +1.39%
MEDIA -0.22%

Stocks Ban List

(SEBI) F&O ban list (INDIACEM close at -365.80), (BALRAMCHIN open at close at -564.10), (BSOFT close at +629.00), (RBLBANK close at +228.23), (CHAMBLFERT close at -504.30), (AARTIIND close at +626.85), (IEX close at -188.95), (HINDCOPPER close at +329.65), (ABFRL close at +322.40), (NATIONALUM close at +181.98), (SUNTV close at +792.15), (GNFC close at +675.55), and (GRANULES close at -683.25) 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.

DEEPAKNTR, BANDHANBNK, SAIL, IDFCFIRSTB, PNB, NMDC, MANAPPURAM, LTF, RAMCOCEM, BIOCON, EXIDEIND, and IRCTC stocks has the possibilities of entrance in the ban list.

NATIONALUM, SUNTV, GNFC, and GRANULES stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 24800 to 25200 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Did Nifty’s Quiet Finish Hint at a Fed Twist Today at Jackson Hole?
Nifty Stays Strong Despite Global Turmoil—Will the Bulls Keep Charging Forward?

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