Did Nifty Just Hint at a Market Rebound or More Uncertainty?

At the close, the Nifty 50 was at 24,936.40 up by 0.34%

September 9, 2024. The markets started in the red, but the day didn’t end how it began. NSE Nifty 50 opened lower yet surprised everyone, closing 0.34% higher, reclaiming a key level above 24,900. What caused this dramatic turnaround?

Snapping a three-day losing streak, Nifty 50 was bolstered by strong performances from FMCG and banking sectors. While the broader Asian markets were weighed down by weak sentiment stemming from a sell-off in US stocks, the Nifty defied the odds. Final-hour buying pushed the index to a close at 24,936.40, marking an 84-point gain.

Was this recovery a fluke or the start of a new trend? Investors certainly took comfort as Nifty held firm above the key support zone of 24,850-24,800, coinciding with the 20-day moving average and a crucial Fibonacci level. But make no mistake—the market is far from steady.

Global uncertainty looms large. European and US futures climbed on the hope of a Fed rate cut, and all eyes are now on the Federal Reserve’s meeting next week. Will the anticipated US inflation data push the Fed toward action?

One thing is clear: the market’s immediate hurdle is now set at 25,000-25,100. Can Nifty climb higher or will it falter in the face of global pressure?

The technical charts tell a cautious story. A positive candle on Nifty’s daily chart suggests some recovery, but the market remains in a fragile state, teetering between upside recovery and a potential trend reversal.

The stage is set for a critical week ahead. Investors brace themselves as the Fed, inflation data, and global markets continue to dance on a knife’s edge. Will Nifty break through 25,150 and signal a true trend reversal? Or are we in for another downward spiral?

Bank Nifty: Up by 1.07%

The Bank Nifty, initially opening in the red, made a strong comeback, closing 1.07% higher at 51,117.80. This uptick signals renewed confidence among investors in the banking sector, despite the early negative sentiment. Similarly, the BSE Sensex managed to end the day on a positive note, gaining 0.46% and reaching a closing high of 81,559.54.

In the sectorial front, the FMCG sector stood out as a clear winner, witnessing a rise of 2.04%. Leading the charge was Godrej Consumer Products Ltd., with an impressive 3.92% gain, followed closely by Dabur India Ltd., which saw its stock price increase by 3.03%.

On the flip side, the Oil & Gas sector faced headwinds, emerging as the top loser with a decline of 1.37%. Among the key players, Petronet LNG Ltd. took a significant hit, with its stock dropping by 2.99%, while Oil & Natural Gas Corporation Ltd. (ONGC) was not far behind, recording a 2.91% loss.

Foreign Institutional Investors (FII/FPI) flexed their muscles with a buy value of Rs. 14,679.24 crore and a sale value of Rs. 13,502.69 crore. Their net buy position stands at a solid Rs. 1,176.55 crore.

Domestic Institutional Investors (DII) weren’t far behind, with a buy value of Rs. 12,172.78 crore and a sale value of Rs. 10,415.76 crore. Their net buy position is even higher at Rs. 1,757.02 crore.

Bank Nifty

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

The gainers included ICICI Bank with a 2.09% increase, AU Bank with a 1.71% increase, Kotak Bank with a 1.46% increase, IndusInd Bank with a 1.32% increase, and Axis Bank with a 1.00% increase.

On the other hand, the biggest losers in the sector included IDFC First Bank with a 1.78% decline, Bandhan Bank with a 0.17% decline, Bank of Baroda with a 0.06% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 9th September, 2024

Stocks Highlights

ICICI Bank Ltd. is making waves with a solid 2.09% rise, pushing its share price to Rs 1,233.45. This surge is not just about short-term momentum; the bank’s loan book has grown by an impressive 16.32% YoY, surpassing its five-year CAGR of 12.29%.

With a consistently rising net interest margin (now at 3.61%) and declining gross NPA and net NPA percentages (2.26% and 0.45%, respectively), the bank seems to be firing on all cylinders. And if that wasn’t enough, its profit per employee has grown by 15.15% in the last year, underscoring its operational efficiency.

On the other hand, Tech Mahindra Ltd. faces challenges. The stock fell by -2.48%, ending the day at Rs 1,583.00. A notable topline contraction of -2.47% indicates the first revenue decline in three years.

Adding to the bearish sentiment, a weekly stochastic crossover suggests a potential downward trend, with historical data showing an average price drop of -5.49% within seven weeks of this signal. Despite its revenue contraction, Tech Mahindra has kept its interest expenses below 1% of operating revenues, while employee costs make up a significant 56.02% of its expenses.

Advance Decline Ratio

Today, the advance-decline ratio was 0.56, and the market breadth was negative. The volatility index India Vix decreased by 6.43 to settle at 14.24 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 986
Decliners – 1751
52Wk High – 123
52Wk Low – 41
High Band Hitters – 112
Low Band Hitters – 131
200d SMA – 22659
50d SMA – 24609
20d SMA – 24850

Top Gainers and Losers Stocks

The top gainers were Hindustan Unilever (+2.85%), Shriram Financial (+2.30%), ICICI Bank (+2.09%), ITC (+1.95%), and Britannia (+1.74%).

The top losers were ONGC (-2.91%), Tech Mahindra (-2.48%), BPCL (-1.19%), Tata Steel (-1.14%), and Hindalco (-1.06%).

Top Gainers and Losers Sectors

The top gainers sector were FMCG (+2.04%), Financial Services (+0.82%), and Consumer Durables (+0.42%).

The top losers sector were Oil & Gas (-1.37%), IT (-0.73%), Metal (-0.68%), Media (-0.37%), and Realty (-0.24%).

SECTORS – NOTABLE ACTION
FMCG +2.04%
FINANCIAL SERVICES +0.82%
CONSUMER DURABLES +0.42%
OIL & GAS -1.37%
IT -0.73%
METAL -0.68%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN close at -555.55), (CHAMBLFERT close at +503.95), (ABFRL close at +313.30), (RBLBANK close at -210.03), (BANDHANBNK close at -195.41), (BIOCON close at +377.60), and (HINDCOPPER close at -308.95) 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, DIXON, GMRINFRA, SAIL, PNB, LTF, BANKBARODA, and CANBK stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 24700 to 25100 is the Nifty 50 trading range.

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