Can Nifty Break Through the 25,200 Barrier? What Lies Ahead for All-Time Highs?

At the close, the Nifty 50 was at 25,041.10 up by 0.42%

September 10, 2024. The markets were off to a promising start today as Nifty 50 opened in the green, rising 0.42%. But was the surge enough to keep the momentum going? Well, things didn’t stay smooth for long.

It all began with a bullish tone as Nifty quickly crossed the 25,100 mark, but it wasn’t long before early profit-booking set in. Investors had their eyes on every movement, and by mid-day, the sector-wide buying helped push Nifty further. However, the final hour threw in a surprise—a sharp sell-off erased part of the day’s gains, leading to a close at 25,041.10, still up by 104.70 points.

What’s driving this cautious optimism? Global cues seemed to set the stage, with U.S. markets rallying overnight. As investors anticipate a possible rate cut by the Federal Reserve next week, the Sensex and Nifty moved higher for the second straight session. Key sectors like IT and pharma helped Nifty rise, especially after a tax cut on select cancer drugs was announced.

But there’s a cloud of uncertainty—global markets are bracing for key U.S. inflation data and impending interest rate decisions. Recession fears in the U.S. and political tensions are adding to the market’s cautious tone. Even European markets are on edge, as another rate cut looms from the European Central Bank.

Can Nifty Break the 25,200 Barrier?

Technically speaking, Nifty formed a high-wave Doji pattern, signaling market indecision. It flirted with the 25,100 level but couldn’t hold on. The question is: Can Nifty push past 25,216 and maintain upward momentum, or are we in for another bout of profit-taking?

With RSI showing weakness on the daily chart and resistance forming around 25,200, it’s clear that the bulls need to work harder. A decisive close above this level could pave the way for new highs, but until then, caution rules the game.

Domestic Drivers to Watch Amidst this global uncertainty, the domestic market is eyeing a strong monsoon and the upcoming festive season for a demand uptick. The falling crude oil prices, though, are a double-edged sword, indicating possible weak global demand, which could dampen growth prospects.

While India’s GDP forecast is still strong, with a 6.7% YoY growth prediction for FY25, Nomura’s latest report suggests a downside risk. Investors will be keeping a close eye on how these factors unfold in the coming weeks.

The Big Question: Will Nifty Hold or Slip? As markets digest both domestic and global developments, the stage is set for either a breakout or another round of profit-taking. Will Nifty break the 25,200 barrier, or are the bulls running out of steam? The answer lies in the days ahead.

Bank Nifty: Up by 0.30%

The Bank Nifty began the trading session with a 0.30% gain and ended the day in green, closing at 51,272.30. This steady rise reflects a healthy appetite for banking stocks, indicating confidence in the sector’s ongoing performance. Similarly, the BSE Sensex also enjoyed a strong showing, climbing by 0.44% to finish at a record high of 81,921.29.

In the sectorial front, the Media sector saw a significant rise, gaining 2.69%. Investors were thrilled as Hathway Cable & Datacom Ltd. led the charge with a remarkable 4.99% jump, while Saregama India Ltd. followed closely behind, gaining 4.67%.

On the other hand, Financial Services struggled to keep pace, emerging as the top loser with a decline of 0.31%. Within this sector, HDFC Life Insurance Company Ltd. faced a sharp dip, losing 4.40%, while ICICI Lombard General Insurance Company Ltd. saw a 2.72% decline.

Foreign Institutional Investors (FIIs) were net buyers with a total buy value of Rs. 16,771.58 crore and a sale value of Rs. 14,563.35 crore, resulting in a net buy value of Rs. 2,208.23 crore.

Conversely, Domestic Institutional Investors (DIIs) were net sellers, with a buy value of Rs. 12,153.63 crore against a sale value of Rs. 12,429.00 crore, leading to a net sell value of Rs. -275.37 crore.

Bank Nifty

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

The gainers included Bandhan Bank with a 2.36% increase, Axis Bank with a 1.34% increase, IndusInd Bank with a 0.66% increase, AU Bank with a 0.53% increase, and Federal Bank with a 0.35% increase.

On the other hand, the biggest losers in the sector included State Bank of India with a 0.22% decline, Punjab National Bank with a 0.07% decline, IDFC First Bank with a 0.06% decline, and Kotak Bank with a 0.03% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 10th September, 2024

Stocks Highlights

Divi’s Laboratories Ltd. has seen an impressive upward movement, with its share price rising by 5.23% from its previous close of Rs 5,173.50 to a last traded price of Rs 5,444.00. Intraday trading data reveals that such gains are rare, with only 1.91% of sessions in the last 19 years showing increases over 5%.

However, despite the recent spike, the company’s three-year return stands at -0.67%, significantly underperforming the Nifty 100, which posted a gain of 49.32% over the same period.

On the operational front, Divi’s Laboratories has reported a 90.07% YoY decrease in cash used for investing activities, spending Rs 269.0 crore. Employee costs account for 13.95% of its operating revenues, while interest expenses have remained under 1%.

In contrast, HDFC Life Insurance Company Ltd. experienced a significant dip, with its share price falling by -4.40%, from Rs 735.80 to Rs 703.40. Over the past six years, only 0.59% of trading sessions have seen intraday declines greater than 5%. Despite this short-term dip, the company’s annual revenue growth of 42.38% outshined its three-year CAGR of 12.22%.

Technically, a bearish 14-day moving average crossover has appeared for HDFC Life, historically leading to an average decline of -2.19% within seven days. The stock has given a modest three-year return of 0.19%, again lagging behind the Nifty 100’s robust 49.32% return.

Advance Decline Ratio

Today, the advance-decline ratio was 2.13, and the market breadth was positive. The volatility index India Vix decreased by 6.16 to settle at 13.36 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1843
Decliners – 867
52Wk High – 150
52Wk Low – 21
High Band Hitters – 124
Low Band Hitters – 56
200d SMA – 22686
50d SMA – 24630
20d SMA – 24885

Top Gainers and Losers Stocks

The top gainers were Divi’s Laboratories (+5.23%), LTIM (+3.02%), NTPC (+2.39%), Bharti Airtel (+2.23%), and Wipro (+2.02%).

The top losers were HDFC Life (-4.40%), SBI Life (-2.46%), Shriram Finance (-1.80%), Bajaj Finserv (-1.75%), and Bajaj Finance (-1.41%).

Top Gainers and Losers Sectors

The top gainers sector were Media (+2.69%), IT (+1.73%), Pharma (+1.08%), Consumer Durables (+0.92%), and Realty (+0.88%).

The top losers sector were Financial Services (-0.31%), and Oil & Gas (-0.24%).

SECTORS – NOTABLE ACTION
MEDIA +2.69%
IT +1.73%
PHARMA +1.08%
FINANCIAL SERVICES -0.31%
OIL & GAS -0.24%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN close at +562.40), (CHAMBLFERT close at +511.75), (ABFRL close at +317.05), (BANDHANBNK close at +200.04), (RBLBANK close at +213.68), (HINDCOPPER close at +313.10), and (BIOCON close at +386.60) 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.

IDEA, NMDC, PNB, GMRINFRA, SAIL, BANKBARODA, CANBK, LTF, DIXON, GRANULES and GNFC stocks has the possibilities of entrance in 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 Just Hint at a Market Rebound or More Uncertainty?
Nifty Dips Amid Global Caution—Will US Jobs Data Shake the Market?

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