Could Today’s Market Bounce Signal a Game-Changer Before Tomorrow’s RBI Decision?

At the close, the Nifty 50 was at 24,297.50 up by 1.27%

In a significant turnaround, the NSE Nifty 50 ended its three-day losing streak, closing 1.27% higher at 24,297.50 on August 7. The index surged by 305 points, buoyed by broad-based buying across sectors and positive global cues. The market’s strong performance comes just ahead of the RBI policy announcement, adding an element of suspense to the upcoming trading sessions.

The Nifty opened on a positive note, driven by favorable developments in global markets, particularly in Japan and the US, where comments from Federal Reserve officials eased recession concerns. Although the index experienced some profit booking throughout the day, it managed to maintain its gains, forming a green candle. However, the long-legged Doji pattern suggests a level of indecisiveness among traders.

India Vix, a measure of market volatility, cooled off, and market breadth improved significantly, indicating a potential continuation of the pullback. Despite recent heavy selling by Foreign Institutional Investors (FIIs), Domestic Institutional Investors (DIIs) have stepped in, providing stability and resilience to the market.

As traders keenly await the RBI policy announcement and the weekly expiry of Nifty derivatives, the key level to watch is 24,400. If Nifty manages to fill the bearish gap created on August 5 around the 24,700 zone, significant upside potential could be unlocked.

With global markets stabilizing and retail investor sentiment recovering, the crucial question remains: Will Nifty sustain this momentum and break through the resistance levels, or will uncertainty prevail?

Bank Nifty: Up by 0.75%

The Bank Nifty and BSE Sensex experienced impressive gains, signaling a positive turn for Indian equity markets. The Bank Nifty started the day with a robust 0.75% increase and closed at 50,119.00, showcasing strength in the banking sector. Meanwhile, the BSE Sensex climbed by 1.11%, ending the session at a notable high of 79,468.01.

In the sectorial front, the Oil & Gas sector experienced a significant uptick today, marking a 3.06% overall gain. key players in the industry. Oil India Ltd. led the charge with a remarkable 7.74% increase. Close on its heels, Oil & Natural Gas Corporation Ltd. achieved a substantial 7.45% rise, reflecting its solid operational efficiency and market strategies.

Intriguingly, there were no losers in the sector today, highlighting a day of uniform progress and growth.

Foreign Institutional Investors (FIIs) reported a net outflow of Rs. 3,314.76 crore, with buy transactions totaling Rs. 14,094.77 crore and sales amounting to Rs. 17,409.53 crore. This outflow indicates a cautious stance by foreign investors amidst global uncertainties.

In contrast, DIIs demonstrated a more positive outlook with a net inflow of Rs. 3,801.21 crore. They bought Rs. 16,070.87 crore worth of shares while selling Rs. 12,269.66 crore.

Bank Nifty

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

The gainers included Punjab National Bank with a 2.01% increase, HDFC Bank with a 1.70% increase, Bank of Baroda with a 1.69% increase, Bandhan Bank with a 1.60% increase, and State Bank of India with a 1.54% increase.

On the other hand, the biggest losers in the sector included IndusInd Bank with a 2.45% decline, and AU Bank with a 0.34% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 07th August, 2024

Rupee Under Pressure as Dollar Strengthens

The Indian rupee continued its downward journey, closing at 83.96 against the US dollar on Wednesday, marking a 4 paise decline. This weakening is primarily attributed to a resurgent US dollar and escalating geopolitical tensions in West Asia.

While domestic markets displayed resilience, they were unable to counteract the negative impact of a stronger greenback and rising crude oil prices. The rupee’s intraday range was relatively narrow, with a low of 83.97.

It’s worth noting that Tuesday brought a respite for the rupee, with a 17 paise recovery from its all-time low of 84.09, set just a day prior. However, market experts predict continued pressure on the rupee due to the strengthening dollar and regional conflicts.

A counterbalance to this bearish outlook is the potential support from positive global equities. The dollar index climbed 0.31% to 103.28, while Brent crude oil futures surged 1.22% to $77.41 a barrel.

The interplay of these global factors will be crucial in determining the rupee’s trajectory in the coming days.

Will the rupee manage to stabilize, or will it succumb to the prevailing headwinds?

Stocks Highlights

Oil and Natural Gas Corporation Ltd. (ONGC) exhibited a substantial rise, with its share price jumping by 7.45% from Rs 306.10 to Rs 328.90. This gain is noteworthy as ONGC has delivered a return on equity (ROE) of 14.6% for the year ending March 31, 2024, surpassing its five-year average of 12.06%.

However, a bearish signal emerged on August 5, 2024, with a 20-day moving average crossover, historically leading to an average price decline of 3.2% within seven days.

In contrast, IndusInd Bank Ltd. experienced a decline, with its share price falling by 2.45%, from Rs 1,381.00 to Rs 1,347.15. Despite this, the bank’s loan book growth reported a year-on-year increase of 18.41%, outpacing its five-year compound annual growth rate (CAGR) of 10.67%.

Additionally, the bank has consistently expanded its net interest margin over the last three years, achieving a margin of 4.0% last year. A daily MACD crossover on August 5, 2024, indicates a bearish trend, with an average price decline of 3.37% within ten days historically.

Advance Decline Ratio

Today, the advance-decline ratio was 4.09, and the market breadth was positive. The volatility index India Vix decreased by 13.72 to settle at 16.17 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 2159
Decliners – 528
52Wk High – 76
52Wk Low – 37
High Band Hitters – 162
Low Band Hitters – 51
200d SMA – 22063
50d SMA – 23910
20d SMA – 24552

Top Gainers and Losers Stocks

The top gainers were ONGC (+7.45%), Coal India (+6.24%), Adani Enterprises (+3.70%), Adani Ports (+3.35%), and Power Grid (+3.20%).

The top losers were IndusInd Bank (-2.45%), Tech Mahindra (-0.63%), Britannia (-0.32%), Hindustan Unilever (-0.26%), and Titan (-0.15%).

Top Gainers and Losers Sectors

The top gainers sector were Oil & Gas (+3.06%), Metal (+2.69%), Media (+2.58%), Pharma (+2.20%), and Realty (+1.83%).

SECTORS – NOTABLE ACTION
OIL & GAS +3.06%
METAL +2.69%
MEDIA +2.58%

Stocks Ban List

(SEBI) F&O ban list (INDIACEM open at -365.50 and close at +368.05), (LICHSGFIN open at -655.05 and close at -637.15), (MANAPPURAM open at -201.19 and close at +200.42), (INDIAMART open at +2718.00 and close at +2752.05), (HINDCOPPER open at -289.40 and close at +296.20), (BSOFT open at -588.00 and close at -575.85), (ABCAPITAL open at -206.40 and close at +211.52), (RBLBANK open at -216.90 and close at +214.32), (CHAMBLFERT open at -508.90 and close at +517.20), (GNFC open at -651.95 and close at +666.45), and (GRANULES open at +655.60 and close at +656.80) 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, BANDHANBNK, PNB, ABFRL, IDFCFIRSTB, and BIOCON stocks has the possibilities of entrance in the ban list.

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

Daily Pivots

As per the above pivots data, 24150 to 24450 is the Nifty 50 trading range.

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