Global Equities Decline Amid Middle East Conflict Concerns

At the close, the Nifty 50 was at 19,624.70 down by 0.24%

In recent trading sessions, the Indian benchmark indices faced sustained downward pressure, primarily due to weak global cues. These unsettling global signals can be largely attributed to the ongoing Middle-East crisis and the unfolding earnings season. On October 19, the NSE Nifty 50 began on a cautious note, ultimately closing in negative territory with a 0.24% decline, falling below the 19,650 mark. The day’s overall trajectory leaned towards the bearish side, mirroring the broader global sentiment.

Global equity markets mirrored this trend, marked by risk aversion stemming from concerns related to the Middle East conflict. Simultaneously, the bond market saw a sell-off, driving Treasury yields to 16-year highs. This elevated market anxiety is further amplified by the highly anticipated speech from the Fed Chairman.

The decline in various Asian and European benchmark indices also exerted downward pressure on the local market sentiment. The ongoing Middle East conflict is causing investors to reduce their exposure to equities, with the primary concern being that an extended conflict might prompt a shift towards safe-haven assets as a means of safeguarding investments.

Bank Nifty: Down by 0.31%

Both the Bank Nifty and BSE Sensex encountered a challenging day in the trading session, starting in negative territory and ultimately closing with losses. The Bank Nifty experienced a 0.31% decline, finishing at 43,754.50, while the BSE Sensex saw a 0.38% drop, concluding the session at a low of 65,629.24. These declines are indicative of the overall cautious sentiment prevailing in the market.

Nevertheless, there are signs of a positive divergence on the daily momentum indicator. This divergence occurs when new price lows are not accompanied by new lows on the momentum indicator. Such a development suggests that downward momentum is weakening, increasing the likelihood of a potential market rebound.

In terms of sectoral performance, the Auto sector displayed noteworthy growth, with a significant 0.50% gain. Bajaj Auto Ltd. notably surged by an impressive 6.55%, while Hero Motocorp Ltd. showed substantial growth with a 3.74% increase.

Conversely, the Metal sector experienced a minor setback, with a 0.88% decline. Apl Apollo Tubes Ltd. and Welspun Corp Limited faced losses of -3.77% and -2.58%, respectively.

Foreign Institutional Investors (FIIs)/Foreign Portfolio Investors (FPIs) recorded a buy value of Rs. 10,102.11 crore and a sale value of Rs. 11,195.58 crore, resulting in a net value of -Rs. 1,093.47 crore. This suggests that during this period, FIIs/FPIs were net sellers in the Indian market.

On the other hand, Domestic Institutional Investors (DIIs) exhibited a different trend, with a buy value of Rs. 7,249.75 crore and a sale value of Rs. 6,513.60 crore, resulting in a net value of Rs. 736.15 crore. This indicates that DIIs were net buyers during this period.

Bank Nifty

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

The gainers included IndusInd Bank with a 1.95% increase, Bank of Baroda with a 0.76% increase, Federal Bank with a 0.31% increase, AU Bank with a 0.29% increase, and Axis Bank with a 0.03% increase. On the other hand, the biggest losers in the sector included Bandhan Bank with a 3.70% decline, ICICI Bank with a 0.94% decline, Kotak Bank with a 0.84% decline, HDFC Bank with a 0.35% decline, and Punjab National Bank with a 0.27% decline. These results suggest that some banking stocks performed better for the day.

Buzz

In the ever-changing financial landscape, vigilantly tracking currency movements is essential for both investors and businesses. Recently, the Indian rupee concluded at 83.27 (approx.) against the US dollar, displaying a slight decline of 2 paise. This dip can be attributed to the interconnectedness of domestic equity market fluctuations and the global uptick in crude oil prices.

The impact of these factors becomes evident as the rupee opened at 83.24 against the dollar, maintaining a relatively narrow trading range between 83.23 and 83.27 throughout the session. While this resulted in a marginal loss, the rupee’s resilience was supported by fresh foreign capital inflows and the comparative weakness of the US dollar when measured against other major currencies. This underscores the significance of global market dynamics in influencing the currency’s performance.

Global oil markets also played a substantial role, with Brent crude futures experiencing a noteworthy 3.05% surge, reaching $89.30 per barrel. Such developments can exert additional pressure on the rupee’s value, highlighting the importance of implementing a diversified portfolio strategy and robust risk management in these uncertain times.

Buzzing

LTIMindtree Ltd. recently experienced a notable increase in its share price, surging by 5.97% from the previous closing value of Rs 5,155.20 to reach Rs 5,463.00. However, it’s worth highlighting a bearish signal that emerged with a 10-day moving average crossover. Historical data indicates an average price decline of approximately -2.97% within 7 days of such signals over the past 5 years. Despite this, LTIMindtree Ltd. has displayed impressive annual revenue growth at 109.1%, outperforming its 3-year CAGR of 43.86%. Notably, the company has effectively managed its expenses, allocating less than 1% of operating revenues to interest expenses and 62.92% towards employee costs in the fiscal year ending on March 31, 2023.

Conversely, Wipro Ltd. witnessed a -3.04% decline in its share price from the previous close of Rs 407.45, settling at Rs 395.05. Multiple sell signals, including the Daily MACD crossover and the 200-day moving average crossover, have become evident. Historical data suggests an average price decline of around -2.74% within 10 days and -3.62% within 30 days following such signals over the past 10 and 5 years, respectively. In the financial realm, Wipro Ltd. allocated 1.11% of its operating revenues to interest expenses and 59.42% to employee costs in the fiscal year ending on March 31, 2023.

Advance Decline Ratio

Today, the advance-decline ratio was 0.90, and the market breadth was negative. The volatility index India Vix decreased by 1.00 percent to settle at 10.86 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1132
Decliners – 1254
52Wk High –  109
52Wk Low – 14
High Band Hitters – 94
Low Band Hitters – 55
200d SMA – 18587
50d SMA – 19623
20d SMA – 19660

Top Gainers and Losers Stocks

The top gainers were Bajaj Auto (+6.55%), LTIM (+5.97%), Hero MotoCorp (+3.74%), Nestle India (+3.51%), and UltraTech Cement  (+2.86%).

The top losers were Wipro (-3.04%), Tech Mahindra (-1.52%), Sun Pharmaceutical (-1.46%), NTPC (-1.24%), and UPL (-1.22%).

Top Gainers and Losers Sector

The top gainers sector were Auto (+0.50%), Consumer Durables (+0.20%), FMCG (+0.14%), and Media (+0.14%).

The top losers sector were Metal (+0.88%), Oil & Gas (+0.53%), Financial Services (+0.39%), Pharma (+0.38%), and Realty (-0.35%).

SECTORS – NOTABLE ACTION
AUTO +0.50%
CONSUMER DURABLES +0.20%
FMCG +0.14%
METAL -0.88%
OIL & GAS -0.53%
FINANCIAL SERVICES -0.39%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at -422.00 and close at -421.75), (INDIACEM open at -220.50 and close at +226.75), (DELTACORP open at -128.55 and close at -127.60), (IBULHSGFIN open at -170.30 and close at +174.05), (SAIL open at -87.35 and close at +88.50), (MCX open at +2184.80 and close at -2184.50), (GNFC open at +667.90 and close at -665.25), (MANAPPURAM open at -141.10 and close at -141.65), (HINDCOPPER open at -153.90 and close at +157.10) 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.

PNB, NMDC, BIOCON, SUNTV, METROPOLIS, CHAMBLFERT, RBLBANK, L&TFH and ESCORTS stock has the possibilities of enterance in the ban list.

DELTACORP, IBULHSGFIN, SAIL, MCX, GNFC, MANAPPURAM and HINDCOPPER stocks has the possiblities of exit from ban list.

Daily Pivots

As per the above pivots data, 19520 to 19710 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Market Recovery Short-Lived Sectors Face Selling Pressure
Market Soars on Positive Global Cues and Sector-Wide Buying
Nifty’s Flat Opening and Narrow Consolidation A Marginal Red Finish

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