Bears Rule the Roost as Nifty 50 Slumps Below 22,500

At the close, the Nifty 50 was at 22,488.65 down by 0.95%

On May 30, the NSE Nifty 50 index stumbled into the red, shedding 0.95 percent to close below the 22,500 mark. This marked the fifth straight session of declines as the bears firmly took control of Dalal Street. The benchmark indices were notably weighed down by a sell-off in banking and IT shares.

The Nifty 50’s downward spiral continued, plunging by 0.9 percent. From the opening bell, the market was under pressure, sliding steadily throughout the day and brushing close to the 22,400 level amidst widespread selling, except in the banking sector. A late-session rally helped pare some of the intraday losses, but the index still ended the day approximately 216 points lower.

On the day of monthly expiry, the Nifty 50 opened weaker at 22,650, dragged down by tepid global equity performances. The index’s woes compounded as it closed at 22,488.65, down by 216.05 points. Contributing to this decline were rising US treasury yields and persistent global inflation, which pushed back anticipated interest rate cuts by the central bank.

Broader market trends remained sluggish due to profit-taking and reluctance to hold short-term positions, especially with exit polls looming over the weekend. Negative cues from the US market further dampened overall market sentiment, spurring a continued sell-off.

In essence, the Nifty 50’s performance painted a picture of a market caught in the crosswinds of global economic pressures and domestic uncertainties, steering it into a sustained bearish trend.

Bank Nifty: Up by 0.37%

The Bank Nifty exhibited a positive start by opening in the green, with a modest increase of 0.37%. This positive momentum persisted throughout the session, culminating in a green closing at 48,682.35. Conversely, the BSE Sensex encountered a contrasting trajectory, commencing with a decline of 0.83% and closing in the red at a low of 73,885.60.

In the sectorial front, the media sector has shown promising gains, marking an increase of 0.48%. Notably, Network18 Media & Investments Ltd. surged by 4.56%, demonstrating robust performance, followed by Sun TV Network Ltd. with a gain of 2.55%.

Conversely, the metal sector experienced a notable decline, witnessing a loss of 3.01%. Hindustan Zinc Ltd. and Hindustan Copper Ltd. were among the top losers, with declines of -6.50% and -5.85%, respectively.

Foreign Institutional Investors (FII/FPI) recorded a net selling value of Rs. 3,050.15 crore in the Indian market. This was characterized by a buy value of Rs. 18,108.69 crore and a sale value of Rs. 21,158.84 crore.

Conversely, Domestic Institutional Investors (DII) displayed a net buying behavior, with a net value of Rs. 3,432.92 crore. Their buy value amounted to Rs. 13,748.50 crore, while the sale value stood at Rs. 10,315.58 crore.

Bank Nifty

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

The gainers included ICICI Bank with a 1.45% increase, IDFC First Bank with a 1.23% increase, Axis Bank with a 1.06% increase, Federal Bank with a 0.85% increase, and State Bank of India with a 0.76% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 2.48% decline, AU Bank with a 1.17% decline, IndusInd Bank with a 0.56% decline, and Punjab National Bank with a 0.23% decline. These results suggest that most of the banking stocks performed better for the day.

Rupee Slips Against US Dollar Amid Market Volatility

In early trade on Thursday, the Indian rupee declined by 2 paise, reaching 83.42 against the US dollar. This drop is primarily attributed to the outflow of foreign capital in the context of fluctuating domestic equity markets.

Impact of Strong US Dollar on Indian Rupee
A robust American currency exerted additional pressure on the rupee, although declining crude oil prices helped limit the extent of the local currency’s fall. The rupee began trading at 83.42 at the interbank foreign exchange market, briefly dipping to 83.44 before recovering to 83.42, marking a 2 paise loss compared to its previous close.

On Wednesday, the rupee had a significant drop of 22 paise, closing at 83.40 against the US dollar. In the broader market, the dollar index, which measures the greenback’s strength against a basket of six major currencies, was up by 0.06 percent, trading at 105.10. Concurrently, Brent crude futures, the global oil benchmark, saw a slight decline of 0.05 percent, settling at $83.56 per barrel.

The rupee’s performance is influenced by a mix of foreign capital movements, domestic market volatility, and international currency and commodity trends. While a strong dollar poses challenges, easing crude prices provide some relief to the local unit.

Stocks Highlights

ICICI Bank Ltd.’s share price witnessed a moderate increase of 1.45% from its previous close, reaching Rs 1,118.00. However, the intraday fact check reveals that only 2.08% of trading sessions in the last 19 years saw intraday declines exceeding 5%. On the positive side, the bank reported a YoY increase of 16.32% in advances, surpassing its 5-year CAGR of 12.29%, indicating robust loan book growth. Additionally, the company has shown an uptrend in net interest margin over the last 3 years, with margins reaching 3.61% in the last year.

However, caution may be warranted as a sell signal emerged with a 50-day moving crossover, historically preceding an average price decline of -3.8% within 30 days. Investors should closely monitor these developments to make informed decisions regarding their investments in ICICI Bank Ltd.

In contrast, Tata Steel Ltd.’s share price saw a significant decline of -5.19% from its previous close, closing at Rs 165.20. Despite a strong 3-year return of 57.91% compared to Nifty 100’s return of 51.36%, the stock underperformed Nifty Metal, offering investors only a 57.91% return against Nifty Metal’s 94.65% return over the same period.

Moreover, the company’s expenditure pattern reveals that it has allocated 3.28% of its operating revenues towards interest expenses and 10.69% towards employee costs in the fiscal 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 no change to settle at 24.18 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 606
Decliners – 1958
52Wk High – 57
52Wk Low – 47
High Band Hitters – 85
Low Band Hitters – 110
200d SMA – 21035
50d SMA – 22379
20d SMA – 22482

Top Gainers and Losers Stocks

The top gainers were ICICI Bank (+1.45%), Axis Bank (+1.06%), SBIN (+0.76%), HDFC Bank (+0.66%), and Bharti Airtel (+0.32%).

The top losers were Tata Steel (-5.19%), Tech Mahindra (-3.16%), Grasim (-2.87%), Bajaj Finserv (-2.86%), and Wipro (-2.80%).

Top Gainers and Losers Sectors

The top gainers sector were Media (+0.48%).

The top losers sector were Metal (-3.01%), IT (-2.19%), Pharma (-1.81%), Consumer Durables (-1.67%), and FMCG (-1.26%).

SECTORS – NOTABLE ACTION
MEDIA +0.48%
METAL -3.01%
IT -2.19%
PHARMA -1.81%

Stocks Ban List

(SEBI) F&O ban list (GMRINFRA open at +88.75 and close at +81.05), (IDEA open at +14.85 and close at -14.60), (ABFRL open at +299.30 and close at -292.65), and (HINDCOPPER open at +373.00 and close at -354.40) 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.

INDIACEM, SAIL, ZEEL, NATIONALUM, SUNTV, BALRAMCHIN, and IDFCFIRSTB stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 22250 to 22750 is the Nifty 50 trading range.

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