Bears Tighten Grip on Dalal Street Sixth Session Plagued by US Bond Yields and Geopolitical Tensions

At the close, the Nifty 50 was at 18,857.25 down by 1.39%

The NSE Nifty 50 faced a demanding day, commencing with losses and ultimately closing down by 1.39%. This marks the sixth consecutive session where the bears have maintained control on Dalal Street. Several factors are contributing to this market downturn.

To start, the increase in US bond yields has raised concerns due to its potential impact on capital flows and overall market sentiment. Additionally, the escalating conflict between Hamas and Israel has added to market unease, as geopolitical tensions can have implications for global markets.

The underwhelming earnings performance of Indian companies has also played a significant role in the market’s decline. Expectations for Q2 earnings have not been met, a trend observable not only in India but also in developed economies. Concerns about an economic slowdown due to geopolitical uncertainties and elevated interest rates have led to downgrades in earnings and valuations.

Moreover, the volatility associated with the expiration of monthly futures and options (F&O) contracts has added pressure, prompting investors to take a cautious approach. Small-cap indices saw a modest recovery but still closed lower in this challenging market environment. Staying well-informed and closely monitoring these market dynamics is crucial for investors during these uncertain times.

Bank Nifty: Down by 1.29%

In the current market scenario, both the Bank Nifty and the BSE Sensex endured substantial losses, extending a trend of negative performance. The Bank Nifty initiated the day with losses and ultimately closed down by 1.29% at 42,280.15. Similarly, the BSE Sensex saw a decline of 1.41%, concluding in the red at 63,148.15.

One notable observation is that the Bank Nifty is now approaching the crucial psychological support level of 42,000. This marks a pivotal moment for the index, as breaching this support could lead to further downward movement. It’s essential to recognize that the recent decline has been quite sharp, and market conditions suggest an oversold situation. An oversold market often increases the likelihood of a near-term pullback or corrective bounce.

The current market landscape is characterized by significant sector-wide losses, with all sectors closing in negative territory. Among these, the Metal sector stands out as the top underperformer, experiencing a decline of 1.62%. Within this sector, individual companies have also faced substantial losses, with JSW Steel Ltd. witnessing a decrease of -2.73%, Adani Enterprises Ltd. down by -2.17%, and Vedanta Ltd. recording a dip of -1.98%.

Foreign Institutional Investors (FIIs)/Foreign Portfolio Investors (FPIs) have shown a net selling trend, with a buy value of Rs. 10,239.05 crore and a significant sell value of Rs. 17,941.58 crore, resulting in a net value of -Rs. 7,702.53 crore.

Conversely, Domestic Institutional Investors (DIIs) have exhibited a net buying trend, acquiring stocks worth Rs. 13,600.71 crore and selling stocks with a value of Rs. 7,042.26 crore, resulting in a net value of Rs. 6,558.45 crore.

Bank Nifty

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

The gainers included Axis Bank with a 1.89% increase, and Punjab National Bank with a 0.86% increase. On the other hand, the biggest losers in the sector included IDFC First Bank with a 2.87% decline, Bandhan Bank with a 2.84% decline, AU Bank with a 2.80% decline, Federal Bank with a 2.61% decline, and Bank of Baroda with a 2.46% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

Indian Rupee Declines Amid Global Uncertainties

The Indian rupee continued its downward trajectory for the third consecutive session, depreciating by 6 paise to reach 83.23 against the US dollar in early trade. Several factors have contributed to this decline. A strong US dollar and negative sentiments in the equity market have put pressure on the rupee.

One significant factor impacting the rupee is the massive selling of equities by foreign investors. This exodus from the Indian stock market has added to the downward pressure on the currency. Additionally, the rupee’s value has been influenced by the geopolitical tensions in West Asia, which have kept crude oil prices hovering around $90 a barrel.

In the interbank foreign exchange market, the rupee opened at 83.19 and touched a low of 83.23 against the US dollar, marking a loss of 6 paise from its previous close of 83.17. This recent decline follows a pattern, with the rupee having dropped 4 paise on Monday, remained steady on Tuesday due to the Dussehra holiday, and saw a 1-paise dip on Wednesday.

It’s clear that the Indian rupee’s value is currently influenced by a complex interplay of international and domestic factors, making it important for investors and policymakers to closely monitor its performance. Meanwhile, the global oil benchmark, Brent crude, declined slightly by 0.31% to $89.85 per barrel, contributing to the economic landscape’s overall uncertainty.

Buzzing

Axis Bank Ltd. has displayed resilience in the market, with its share price showing a positive move of 1.89% from its previous close, reaching Rs 973.55. What sets this bank apart is its impressive 3-year revenue growth, boasting a 23.27% annual increase that outperforms its 3-year CAGR of 9.76%. Furthermore, the bank has reported a significant YoY increase of 19.76% in advances, surpassing its 5-year CAGR of 11.38%. These robust figures indicate strong financial health and future prospects for Axis Bank.

On the other hand, Mahindra & Mahindra Ltd. faced a decline of -3.89% in its share price, closing at Rs 1,508.00. Despite this setback, there are bullish signals to consider. The company has exhibited remarkable 3-year revenue growth, achieving an annual rate of 34.43%, outperforming its 3-year CAGR of 16.85%. Moreover, its Return on Equity (ROE) stood at 18.24%, surpassing the 5-year average of 10.72%. Although only 1.78% of trading sessions witnessed intraday gains higher than 5%, the stock’s promising performance indicators suggest potential opportunities for investors in the long run.

Advance Decline Ratio

Today, the advance-decline ratio was 0.61, and the market breadth was negative. The volatility index India Vix increased by 3.69 percent to settle at 11.73 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 924
Decliners – 1509
52Wk High –  18
52Wk Low – 64
High Band Hitters – 38
Low Band Hitters – 194
200d SMA – 18608
50d SMA – 19596
20d SMA – 19562

Top Gainers and Losers Stocks

The top gainers were Axis Bank (+1.89%), Adani Ports (+0.34%), HCL Technologies (+0.15%), and Power Grid (+0.15%).

The top losers were M&M (-3.89%), Bajaj Finance (-3.71%), Asian Paint (-3.59%), UPL (-3.39%), and Nestle India (-3.35%).

Top Gainers and Losers Sector

The top losers sector were Metal (+1.62%), Auto (+1.59%), Financial Services (+1.57%), Oil & Gas (+1.50%), and Media (-1.27%).

SECTORS – NOTABLE ACTION
METAL -1.62%
AUTO -1.59%
FINANCIAL SERVICES -1.57%

Stocks Ban List

(SEBI) F&O ban list (DELTACORP open at -134.00 and close at -127.45), and (RBLBANK open at -224.95 and close at -216.35) 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.

PNB, GNFC, IBULHSGFIN, SAIL, BHEL, L&TFH, NMDC, MANAPPURAM, and PVRINOX stock has the possibilities of enterance in the ban list.

Daily Pivots

As per the above pivots data, 18770 to 19000 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Market Edgy as West Asia Tensions Persist
Bears Dominate Domestic Stock Market with Extended Losses
Global Market Weakness Drags Down Domestic Stock Market for Third Consecutive Day

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