Engulfing Bear Candle Forms as Nifty Index Peaks and Plummets

At the close, the Nifty 50 was at 22,055.05 down by 0.64%

Today, the NSE Nifty 50 exhibited a volatile trend, initially opening on a positive note but closing in the red, down by 0.64 percent. This reversal marked the end of a six-day winning streak as profit-taking sentiments prevailed among traders. Sectors like IT and oil & gas bore the brunt of this downturn, contributing to the indices’ decline.

Despite touching record highs, the Nifty50 failed to sustain momentum, encountering resistance after an early surge. The formation of an Engulfing Bear candle on the daily chart signals a potential shift in market sentiment. Additionally, the bearish crossover in the momentum indicator RSI further underscores short-term weakness.

Investors face a conundrum as the market grapples with significant resistance levels and overvaluation concerns. This scenario prompts a cautious approach, with many opting to secure profits amidst uncertainty.

On the global front, anticipation builds around the US FED minutes, with investors closely monitoring signals for future monetary policy. January’s higher-than-expected inflation adds complexity to the equation, potentially impacting the trajectory of interest rates.

As markets await clarity from the US Fed, caution prevails, leading to profit-taking across various sectors. The outcome of the minutes may provide insights into the Fed’s stance on inflation and interest rates, shaping investor sentiment in the days ahead.

Bank Nifty: Down by 0.16%

The Bank Nifty commenced trading on a positive note, reflecting a brief optimism, but eventually saw a marginal decline of 0.16%, closing at 47,019.70 in the red zone. Similarly, the BSE Sensex experienced a downward trend, dropping by 0.59% and concluding at a low of 72,623.09, also ending the session in the red.

Despite the initial positive momentum, both indices struggled to maintain gains throughout the trading day, succumbing to selling pressure and investor caution. Factors contributing to the downturn could include profit-taking, global market cues, and domestic economic factors influencing investor sentiment.

In the sectorial front, the real estate sector has demonstrated notable gains, with a 2.00% increase. Leading this surge are prominent players like Sobha Ltd., boasting an impressive 6.86% gain, and DLF Ltd., showing a commendable 2.73% increase. However, the media sector presents a contrasting picture, experiencing a significant downturn of 4.91%. Notably, Zee Entertainment Enterprises Ltd. registers a substantial loss of -14.02%, alongside Dish TV India Ltd., which also sees a notable decline of -6.87%.

Foreign Institutional Investors (FII/FPI) displayed a net buying activity with a buy value of Rs. 17,080.67 crore and a sale value of Rs. 16,796.01 crore, resulting in a net value of Rs. 284.66 crore. This indicates a positive sentiment among foreign investors towards Indian markets. Conversely, Domestic Institutional Investors (DII) experienced a net selling activity, with a buy value of Rs. 10,151.65 crore and a sale value of Rs. 10,563.22 crore, leading to a net value of -Rs. 411.57 crore.

Bank Nifty

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

The gainers included State Bank of India with a 1.57% increase, Bank of Baroda with a 0.75% increase, IndusInd Bank with a 0.72% increase, and ICICI Bank with a 0.06% increase. On the other hand, the biggest losers in the sector included AU Bank with a 2.01% decline, Bandhan Bank with a 1.33% decline, HDFC Bank with a 1.26% decline, Kotak Bank with a 1.14% decline, and IDFC First Bank with a 1.10% decline. These results suggest that some of the banking stocks not performed better for the day.

Rupee Inches Upward Against US Dollar Amidst Mixed Factors

The Indian rupee continued its upward trajectory for the third consecutive session, appreciating by 6 paise to reach 82.91 against the US dollar in early trade on Wednesday. This positive movement was attributed to a weaker US dollar and favorable sentiments in the domestic equity markets. However, the rupee faced resistance due to selling pressure from foreign equity investors, influenced by elevated crude oil prices.

In initial trading at the interbank foreign exchange, the rupee opened at 82.90 before slightly slipping to 82.91 against the greenback, still marking a 6 paise gain from the previous close. Notably, on Tuesday, the rupee had settled 4 paise higher at 82.97 against the US dollar, following a similar upward trend.

Concurrently, the dollar index, which measures the strength of the US dollar against a basket of six currencies, experienced a marginal decline of 0.07% to 103.90. This weakening of the dollar contributed to the rupee’s appreciation.

Despite these developments, Brent crude futures, the global oil benchmark, saw a slight increase of 0.41%, reaching USD 82.68 per barrel. The rise in crude oil prices potentially influenced selling pressure from foreign equity investors, limiting the extent of the rupee’s gains.

As market dynamics continue to fluctuate, the rupee’s performance against the US dollar remains subject to various factors, including global economic trends, geopolitical events, and commodity prices. Investors and traders are advised to monitor these factors closely to gauge the rupee’s future movements in the currency markets.

Stocks Highlights

Tata Steel Ltd. Sees Moderate Gain Amidst Market Volatility

Tata Steel Ltd. witnessed a modest uptick in its share price, rising by 2.09% from its previous close of Rs 141.05 to Rs 144.00. Notably, the stock experienced a relatively stable trading session, with intraday declines exceeding 5% in only 2.56% of trading sessions over the past 19 years. However, recent market indicators suggest a potential bearish trend, as evidenced by a 5-day moving crossover signal observed yesterday, historically preceding an average price decline of -2.6% within 7 days.

Despite this, Tata Steel Ltd. confronts challenges in revenue generation, with a slight contraction of 0.14% in sales. This marks the first instance of revenue contraction in the past 3 years, raising concerns among investors. Moreover, the company’s expenditure distribution reveals significant allocations, with 2.59% of operating revenues directed towards interest expenses and 9.21% towards employee costs as of March 31, 2023.

Bharat Petroleum Corporation Ltd. Faces Decline Amidst Strong Revenue Growth

In contrast, Bharat Petroleum Corporation Ltd. experienced a decline in share price, dropping by -3.73% from its previous close of Rs 657.60 to Rs 633.10. Despite this setback, the company boasts impressive revenue growth, with an annual rate of 35.99% outperforming its 3-year compound annual growth rate (CAGR) of 18.13%.

Moreover, Bharat Petroleum Corporation Ltd. maintains prudent financial management, with minimal expenditure on interest and employee costs. As of March 31, 2023, the company allocated less than 1% of operating revenues towards interest expenses and a mere 0.59% towards employee costs, reflecting sound fiscal discipline amidst market challenges.

Advance Decline Ratio

Today, the advance-decline ratio was 0.47, and the market breadth was negative. The volatility index India Vix decreased by 0.90 percent to settle at 15.93 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 810
Decliners – 1712
52Wk High –  146
52Wk Low – 9
High Band Hitters – 94
Low Band Hitters – 82
200d SMA – 19927
50d SMA – 21636
20d SMA – 21800

Top Gainers and Losers Stocks

The top gainers were Tata Steel (+2.09%), SBIN (+1.57%), IndusInd Bank (+0.72%), JSW Steel (+0.61%), and Sun Pharmaceutical (+0.41%).

The top losers were BPCL (-3.73%), NTPC (-2.83%), Coal India (-2.80%), Power Grid (-2.78%), and Wipro (-2.06%).

Top Gainers and Losers Sector

The top gainers sector were Realty(+2.00%), Metal (+0.26%), and FMCG (+0.02%).

The top losers sector were Media (-4.91%), IT (-1.64%), Oil & Gas (-1.44%), Financial Services (-0.55%), and Auto (-0.50%).

SECTORS – NOTABLE ACTION
REALTY +2.00%
METAL +0.26%
FMCG +0.02%
MEDIA -4.91%
IT -1.64%
OIL & GAS -1.44%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at -385.30 and close at -380.95), (RBLBANK open at +262.75 and close at -258.45), (GNFC open at -672.00 and close at -668.05), (GMRINFRA open at -90.90 and close at -86.25), (INDUSTOWER open at -223.00 and close at -218.85), (BIOCON open at -281.50 and close at -274.00), (NATIONALUM open at -161.50 and close at -157.30), (HINDCOPPER open at -251.00 and close at -246.00), (BANDHANBNK open at -203.90 and close at -200.55), (ZEEL open at -173.40 and close at -164.60), (CANBK open at -569.50 and close at -567.35), (INDIACEM open at +244.45 and close at -242.75), and (SAIL open at +130.65 and close at -130.20) 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.

PVRINOX, VEDL, PEL, TATACHEM, PNB, DELTACORP, NMDC, AUROPHARMA, BHEL, and GLENMARK stocks has the possibilities of entrance in the ban list.

INDIACEM, and SAIL stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21900 to 22250 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Private Banks Fuel Market Revival to Approach All-Time Highs
Nifty Soars in 5th Straight Session, Sets New All-Time High
Stock Market Soars 4th Consecutive Day of Gains with Nifty Above 22,000

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