Has Nifty’s Downturn Just Started? Can US Economic Data Change the Course?

At the close, the Nifty 50 was at 25,145.10 down by 0.21%

The NSE Nifty 50 slipped into the red, down 0.21%, closing below the critical 25,150 mark on September 5. For the second session in a row, Nifty extended its losing streak, raising eyebrows across the market. But is this just a temporary dip, or are darker clouds looming?

Indian markets echoed global concerns—especially the tension around the US economy and the Federal Reserve’s pace of rate cuts. Despite a promising start, Nifty faced relentless profit booking, pushing it 53.60 points lower to settle at 25,145.10.

The day’s market performance was a mixed bag. While 11 of the 13 major sectors managed to post gains, Reliance Industries, a heavyweight, took the market down. Adding to the pressure, the realty and auto sectors saw heavy selling, though selective media and consumer durables stocks offered a glimmer of hope with some buying interest.

Technically, Nifty seems to be losing momentum. After a gap-up opening, it quickly succumbed to selling pressure, forming a bearish candle on the daily charts. The weak price action hints at a potential consolidation between 25,000 and 25,350 in the coming sessions. Meanwhile, global worries, especially from the US and China, have only deepened the market’s unease.

Market participants are watching closely for upcoming US economic data—jobless claims and nonfarm payroll reports—which could steer the Federal Reserve’s next move on interest rates. Will these numbers shake the market further? Or will they reignite the rally?

With uncertainty swirling both globally and domestically, one question remains—Is Nifty set for a further slide, or is this the calm before the storm?

Bank Nifty: Up by 0.14%

The Bank Nifty kicked off in the green, gaining 0.14%, and closed on a positive note at 51,473.05. But the BSE Sensex told a different story, slipping 0.18% to close in red at 82,201.16.

In the sectorial front, Media emerged as a strong performer, gaining 0.81%. Within this space, PVR INOX Ltd. led the charge with an impressive 3.53% jump, while Hathway Cable & Datacom Ltd. followed closely, rising by 2.49%.

On the flip side, Realty was the day’s biggest loser, shedding 0.97%. Leading the downturn were Prestige Estates Projects Ltd., which dropped by a notable 4.48%, and Sobha Ltd., which fell by 1.60%.

Foreign Institutional Investors (FII) reported a net outflow of Rs. 688.69 crore, with a buy value of Rs. 17,446.87 crore and a sale value of Rs. 18,135.56 crore.

DIIs demonstrated robust activity, with a net inflow of Rs. 2,970.74 crore. They recorded a buy value of Rs. 14,803.18 crore and a sale value of Rs. 11,832.44 crore

Bank Nifty

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

The gainers included AU Bank with a 2.27% increase, Bandhan Bank with a 2.05% increase, Federal Bank with a 1.13% increase, IDFC First Bank with a 0.46% increase, and Bank of Baroda with a 0.23% increase.

On the other hand, the biggest losers in the sector included IndusInd Bank with a 0.57% decline, Kotak Bank with a 0.33% decline, and ICICI Bank with a 0.08% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 5th September, 2024

Rupee Gains Marginally Amidst Mixed Global Signals

The Indian rupee made a modest gain, strengthening by 4 paise to close at Rs. 83.97 against the US dollar, thanks to a weaker American currency and a dip in crude oil prices. Trading within a narrow range, the rupee opened at Rs. 83.98, touched an intraday high of Rs. 83.97, and held on to its provisional close.

However, global economic concerns and weak equities applied some pressure, while increased dollar demand from importers cast a shadow over the day. These factors kept the trading atmosphere subdued, despite the rupee’s slight gain.

Earlier in the week, the rupee breached the Rs. 84 mark for the second time this month, settling at Rs. 84.01 on Wednesday, struggling against global cues and central bank interventions.

The dollar index, reflecting the greenback’s performance against six major currencies, fell by 0.15% to 101.20 points, while Brent crude oil inched up by 0.74%, trading at $73.24 per barrel.

With global uncertainties looming, the question remains: Will the rupee stabilize, or is more turbulence ahead?

Stocks Highlights

Titan Company Ltd. is turning heads once again with a solid 3.11% surge in its share price, moving from Rs. 3,607.70 to Rs. 3,720.00. This isn’t just a good day for the stock – it’s a sign of Titan’s ongoing strength. Over the last 19 years, only 2.06% of its trading days saw intraday drops over 5%, proving its resilience.

Add to that a stellar return on equity (ROE) of 37.21% for the year ending March 2024, smashing its 5-year average of 25.48%. And with a 78.66% return over three years, it’s clearly outperforming the Nifty 100’s 49.32%. Titan’s lean operation is evident too – just 1.21% of its revenue goes to interest, and 3.65% to employee costs.

Meanwhile, Cipla Ltd. faced a rough patch, with its share price dipping 1.46%, from Rs. 1,651.90 to Rs. 1,627.70. But don’t hit the panic button just yet – in 19 years, only 1% of its trading days saw a drop greater than 5%. With a 15.43% ROE for March 2024, Cipla is outpacing its 5-year average of 11.98%. Plus, its annual revenue growth of 14.17% overshadows its 3-year CAGR of 10.82%, showing long-term promise.

Advance Decline Ratio

Today, the advance-decline ratio was 1.36, and the market breadth was positive. The volatility index India Vix decreased by 1.18 to settle at 14.21 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1556
Decliners – 1141
52Wk High – 193
52Wk Low – 18
High Band Hitters – 135
Low Band Hitters – 38
200d SMA – 22607
50d SMA – 24572
20d SMA – 24785

Top Gainers and Losers Stocks

The top gainers were Titan (+3.11%), LTIM (+1.44%), Wipro (+1.16%), BPCL (+1.11%), and ITC (+0.97%).

The top losers were Cipla (-1.46%), Dr. Reddy (-1.28%), Coal India (-1.28%), Reliance (-1.26%), and Britannia (-1.22%).

Top Gainers and Losers Sectors

The top gainers sector were Media (+0.81%), Consumer Durables (+0.66%), IT (+0.46%), Metal (+0.30%), and Financial Services (+0.11%).

The top losers sector were Realty (-0.97%), Auto (-0.38%), Oil & Gas (-0.38%), Pharma (-0.12%), and FMCG (-0.07%).

SECTORS – NOTABLE ACTION
MEDIA +0.81%
CONSUMER DURABLES +0.66%
IT +0.46%
REALTY -0.97%
AUTO -0.38%
OIL & GAS -0.38%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN close at -586.85), (RBLBANK close at -215.96), (ABFRL close at +315.30), and (HINDCOPPER close at +315.50) 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.

BANDHANBNK, CHAMBLFERT, IDEA, NMDC, SAIL, and BIOCON stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 25000 to 25300 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Did Nifty Just Hit a Speed Bump? Or Is a Bigger Roadblock Ahead?
Nifty’s streak continues, but is the market hiding something?

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