Gains in SBI and PSU Banks Propel Market to Close Higher in Volatile Session

At the close, the Nifty 50 was at 21,840.05 up by 0.45%

The NSE Nifty 50 index showcased remarkable resilience amidst global market turbulence, commencing the day in the red but ultimately closing in the green with a notable uptick of 0.45%. Starting the session with bearish undertones, the market witnessed a smart recovery buoyed by robust gains in State Bank of India (SBI) and other Public Sector Undertaking (PSU) banks, amidst heightened volatility.

Despite initial setbacks, the Nifty demonstrated strength, plummeting to 21,530.20 before bouncing back to conclude the day 97 points higher at 21,840. The recovery was attributed to bullish sentiment prevailing throughout the day, spurred by a surge in buying activity following a weak opening. Notably, this rebound was in stark contrast to the deep cuts experienced on Wednesday, mirroring trends in Asian markets, driven by concerns over US inflation and its implications on Federal Reserve policy decisions.

Market resilience was evident as Nifty managed to secure gains despite weak global cues, opening gap-down in response to US market performance. However, robust recovery in select heavyweights contributed to minimizing losses and closing near the day’s high.

Renewed buying interest in banking stocks, propelled by improving asset quality and government initiatives towards fiscal discipline, fueled the market’s upward trajectory. Notably, PSU banks attracted significant attention, although concerns lingered regarding elevated valuations.

Additionally, optimism prevailed following favorable inflation data from the UK, contributing to broader market recovery. However, the IT sector faced selling pressure amid concerns over higher-than-expected US Consumer Price Index (CPI), raising apprehensions about potential delays in interest rate cuts and subsequent impacts on client spending.

Bank Nifty: Up by 0.89%

In the latest trading session, both the Bank Nifty and BSE Sensex demonstrated resilience and strength, reversing early losses to end the day on a positive note. The Bank Nifty, after opening in the red, surged by 0.89% and closed in the green at 45,908.30. Similarly, the BSE Sensex saw a gain of 0.37%, reaching a high of 71,822.83 by the closing bell.

One of the notable highlights of the day was the robust comeback of the BankNifty bulls, who effectively countered bearish pressures and successfully defended the crucial support level at 45,000.

In the sectorial front, the Oil & Gas sector has shown notable gains, with a rise of 3.10%. Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. have particularly excelled, seeing increases of 8.42% and 7.30% respectively. Conversely, the Information Technology (IT) sector has experienced a downturn, dropping by 1.12%. L&T Technology Services Ltd. and Tech Mahindra Ltd. are among the companies facing losses, with decreases of -3.39% and -2.81% respectively.

Foreign Institutional Investors (FIIs/FPIs) engaged in significant transactions, with a buy value amounting to Rs. 18,323.11 crore and a sale value of Rs. 22,252.71 crore. This resulted in a net value of -Rs. 3,929.60 crore. Conversely, Domestic Institutional Investors (DIIs) exhibited a contrasting trend, with a buy value of Rs. 12,110.28 crore and a sale value of Rs. 9,212.30 crore, yielding a net value of Rs. 2,897.98 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 4.14% increase, Bank of Baroda with a 3.95% increase, Axis Bank with a 2.45% increase, Punjab National Bank with a 1.72% increase, and IndusInd Bank with a 1.41% increase. On the other hand, the biggest losers in the sector included HDFC Bank with a 0.68% decline, and Bandhan Bank with a 0.28% decline. These results suggest that some of the banking stocks performed better for the day.

Indian Rupee Depreciates Against US Dollar Amidst Market Volatility

The Indian rupee faced a depreciation of 4 paise, reaching 83.12 against the US dollar in early trading on Wednesday. This decline follows a negative trend in domestic equities, prompting caution among investors. The strength of the American currency, coupled with elevated crude oil prices in the international market, has contributed to the subdued sentiment among investors.

At the interbank foreign exchange, the rupee opened at 83.11 against the dollar, touching an early low of 83.12 and a high of 83.09 in initial trade. Tuesday witnessed a similar depreciation, with the rupee falling by 8 paise to close at 83.08 against the US dollar.

Analysts predict further challenges for the Indian rupee, with expectations of it falling to 83.08 amidst the broader decline in risk assets against the US dollar. This sentiment is echoed in the drop in gold prices below $2,000 per ounce to $1,991.51.

In contrast, the dollar index, which measures the greenback’s strength against a basket of six currencies, saw a marginal decrease to 104.81. Additionally, Brent crude futures, the global oil benchmark, experienced a slight decline of 0.16% to $82.64 per barrel. These fluctuations underscore the volatility in global markets, influencing the performance of currencies and commodities alike.

Stocks Highlights

Bharat Petroleum Corporation Ltd. witnessed a notable uptick in its share price, rising by 7.30% to reach Rs 626.95 from its previous close of Rs 584.30. This surge reflects investor confidence in the company’s performance. Notably, historical data indicates that only 1.79% of trading sessions in the last 19 years saw intraday declines exceeding 5%, suggesting stability in BPCL’s stock performance.

Furthermore, BPCL has exhibited impressive revenue growth, with an annual revenue growth of 35.99% outperforming its 3-year compound annual growth rate (CAGR) of 18.13%. However, recent market indicators suggest a potential bearish trend, as a 5-day moving crossover occurred on Feb 12, 2024, historically resulting in an average price decline of -2.61% within 7 days.

Regarding financial management, BPCL has maintained prudent expense allocations, with less than 1% of operating revenues directed towards interest expenses and only 0.59% towards employee costs in the fiscal year ending Mar 31, 2023.

Tech Mahindra Ltd. experienced a decline in its share price, dropping by -2.81% to Rs 1,292.10 from its previous close of Rs 1,328.45. Despite this setback, recent market data suggests a potential turnaround, with a 20-day moving crossover indicating a bullish sentiment. Historical analysis reveals an average price gain of 2.55% within 7 days following such signals over the past 5 years.

Similarly, Tech Mahindra has demonstrated robust revenue growth, with an annual revenue growth of 18.57% surpassing its 3-year CAGR of 12.41%. However, it’s worth noting that a minority of trading sessions (2.15% in the last 17 years) have seen intraday gains exceeding 5%.

In terms of financial management, Tech Mahindra has maintained disciplined expense allocation, with less than 1% of operating revenues allocated towards interest expenses. However, a significant portion (51.96%) of operating revenues has been directed towards employee costs in the fiscal year ending Mar 31, 2023.

Advance Decline Ratio

Today, the advance-decline ratio was 1.78, and the market breadth was positive. The volatility index India Vix decreased by 2.35 percent to settle at 15.44 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1591
Decliners – 895
52Wk High –  71
52Wk Low – 35
High Band Hitters – 113
Low Band Hitters – 107
200d SMA – 19827
50d SMA – 21523
20d SMA – 21657

Top Gainers and Losers Stocks

The top gainers were BPCL (+7.30%), SBIN (+4.14%), ONGC (+3.72%), Coal India (+3.33%), and Tata Steel (+2.61%).

The top losers were Tech Mahindra (-2.81%), Cipla (-2.35%), Dr. Reddy (-1.30%), Infosys (-1.05%), and TCS (-1.05%).

Top Gainers and Losers Sector

The top gainers sector were Oil & Gas (+3.10%), Media (+2.51%), Metal (+1.77%), Auto (+1.46%), and Realty (+1.25%).

The top losers sector were IT (-1.12%), and Pharma (-0.90%).

SECTORS – NOTABLE ACTION
OIL & GAS +3.10%
MEDIA +2.51%
METAL +1.77%
IT -1.12%
PHARMA -0.90%

Stocks Ban List

(SEBI) F&O ban list (INDUSTOWER open at -207.65 and close at +215.95), (BANDHANBNK open at -197.25 and close at -198.25), (NATIONALUM open at +146.00 and close at +155.90), (ZEEL open at -183.00 and close at +200.20), (ABFRL open at -236.10 and close at +243.40), (INDIACEM open at -228.00 and close at +234.85), (DELTACORP open at -136.50 and close at +138.65), (SAIL open at -117.10 and close at +122.95), (BALRAMCHIN open at -369.85 and close at -370.40), (AUROPHARMA open at -1019.90 and close at -996.10), (ASHOKLEY open at -170.90 and close at +173.65), (BIOCON open at -265.55 and close at +271.70), and (PNB open at +120.90 and close at +122.95) 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.

CANBK, PEL, RBLBANK, TATACHEM, GNFC, GMRINFRA, PVRINOX, BHEL, MANAPPURAM, UPL, and ESCORTS stocks has the possibilities of entrance in the ban list.

ASHOKLEY, BIOCON, and PNB stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21600 to 22000 is the Nifty 50 trading range.

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