Indian Benchmark Indices Rebound, Erasing Previous Losses in Volatile Trading

At the close, the Nifty 50 was at 21,453.95 up by 1.01%

The NSE Nifty 50 exhibited commendable resilience in the face of challenges, commencing the day in negative territory but concluding over 1.01% higher, surpassing the 21,450 mark. Investors seized buying opportunities amid market declines, propelling benchmark indices upward and overcoming initial uncertainties. Despite this positive momentum, short-term apprehensions persist due to substantial foreign institutional investor (FII) selling, injecting an element of caution.

The day unfolded with fluctuations as monthly and weekly futures and options (F&O) contracts for Nifty approached expiration, adding a layer of complexity to market dynamics. Quarterly earnings reports from key companies played a pivotal role in shaping market sentiment, ultimately contributing to the Indian benchmark indices breaking a two-day losing streak. The market, displaying initial volatility, closed near the day’s high, supported by last-hour buying activities.

Global cues, notably the People’s Bank of China’s (PBOC) 0.5% reserve ratio cut to stimulate growth and financial liquidity, significantly influenced the market’s rebound. However, a prevailing muted sentiment stems from concerns over ongoing FII selling, coupled with premium valuations in India and Q3 earnings falling below expectations. As investors navigate through this earnings season, a careful consideration of both global and domestic factors remains imperative for informed decision-making.

Bank Nifty: Up by 0.15%

The Bank Nifty embarked on a trading session marked by initial downward momentum, opening with a gap that set the stage for a day of fluctuations. Despite the red start, the banking index showcased resilience, posting a modest uptick of 0.15 percent and concluding at 45,082.40. Simultaneously, the BSE Sensex demonstrated a noteworthy 0.98 percent gain, reaching a closing high of 71,060.31.

Wednesday witnessed the banking index testing its 200 EMA, suggesting a potential phase of integration. As Bank Nifty grapples with this crucial level, the broader market sentiment remains uncertain, posing challenges for other sectors to drive a substantial recovery in the Nifty.

On the sectorial front, the media sector emerged as a standout performer, experiencing a commendable surge of 3.06%. D.B.Corp Ltd. spearheaded this upward trend with an impressive gain of 9.92%, closely trailed by Zee Entertainment Enterprises Ltd., securing a substantial 6.28% increase. Contributing to the sector’s success, Network18 Media & Investments Ltd. marked a notable gain of 4.48%, reflecting positive momentum in the media segment amidst the broader market dynamics.

Foreign Institutional Investors (FII/FPI) exhibited a net selling activity, with a sale value of Rs. 34,165.86 Cr. outweighing the buy value of Rs. 27,230.93 Cr. This resulted in a negative net value of Rs. -6,934.93 Cr. On the other hand, Domestic Institutional Investors (DII) engaged in net buying, showcasing a buy value of Rs. 15,493.23 Cr. and a sale value of Rs. 9,480.56 Cr., leading to a positive net value of Rs. 6,012.67 Cr.

Bank Nifty

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

The gainers included IndusInd Bank with a 3.73% increase, Punjab National Bank with a 3.39% increase, AU Bank with a 2.81% increase, Bank of Baroda with a 2.63% increase, and State Bank of India with a 2.13% increase. On the other hand, the biggest losers in the sector included ICICI Bank with a 2.99% decline, Axis Bank with a 2.72% decline, and IDFC First Bank with a 2.63% decline. These results suggest that most of the banking stocks performed better for the day.

Rupee’s Marginal Gain Amidst Global Economic Trends and FPI Movements

The Indian rupee exhibited a marginal uptrend on Wednesday, influenced by a slight rise in the offshore Chinese yuan and a retreat in the dollar index. Starting the day on a flat note, the rupee saw a modest appreciation of 1 paisa, closing at 83.14 against the US dollar in the morning session. However, a subdued trend in domestic equities contributed to a slight negative bias, driven by foreign investors’ selling pressure.

Opening at 83.15 against the dollar at the interbank foreign exchange, the rupee briefly touched a low of 83.16 before settling at 83.14, a nominal increase from its previous close of 83.15. Tuesday’s weakening of the rupee, triggered by a ₹3,115 crore withdrawal by Foreign Portfolio Investors (FPIs) following a 1.5% market decline, remains a factor to watch.

While in-flows persist, paving the way for a potential move beyond 83.20, uncertainties linger amid FPI demands. Additionally, global factors such as Brent crude trading at $79.54 per barrel and the dollar index hovering near a six-week high of 103.53 contribute to the nuanced dynamics influencing the rupee’s trajectory. Investors remain watchful, cementing expectations of the Federal Reserve’s cautious stance on rate cuts in the face of a robust US economy.

Stocks Highlights

Hindalco Industries Ltd. witnessed a positive surge, with its share price rising by 4.68% to reach Rs 566.75 from its previous close of Rs 541.40. Notably, in the last 19 years, only 3.07% of trading sessions experienced intraday declines exceeding 5%. Despite this, a sell signal has emerged, as a 50-day moving crossover occurred recently, historically resulting in an average price decline of -3.69% within 30 days of this signal.

Analyzing financials, the company allocated 1.63% of operating revenues towards interest expenses and 5.85% towards employee costs in the fiscal year ending March 31, 2023.

In contrast, ICICI Bank Ltd. faced a -2.99% dip in its share price, settling at Rs 998.30 from the previous close of Rs 1,029.05. Despite this, the bank reported a robust YoY loan book growth of 17.77%, surpassing its 5-year CAGR of 10.87%. The net interest margin demonstrated an uptrend over the last three years, reaching 3.6% in the previous year. A buy signal emerged for ICICI Bank, with a daily MACD crossover appearing recently. Historical data indicates an average price gain of 3.95% within 10 days of this signal over the past decade, signaling potential advantages for bullish investors.

Advance Decline Ratio

Today, the advance-decline ratio was 2.28, and the market breadth was positive. The volatility index India Vix decreased by 3.21 percent to settle at 14.38 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1723
Decliners – 756
52Wk High –  102
52Wk Low – 25
High Band Hitters – 116
Low Band Hitters – 77
200d SMA – 19545
50d SMA – 21010
20d SMA – 21654

Top Gainers and Losers Stocks

The top gainers were Hindalco (+4.68%), Dr. Reddy (+3.82%), IndusInd Bank (+3.73%), Tata Steel (+3.69%), and HCL Technologies (+3.49%).

The top losers were ICICI Bank (-2.99%), Axis Bank (-2.72%), Asian Paint (-1.73%), Adani Ports (-1.22%), and Hero MotoCorp (-0.58%).

Top Gainers and Losers Sector

The top gainers sector were Media (+3.06%), Metal (+2.96%), Oil & Gas (+2.02%), FMCG (+1.61%), and IT (+1.56%).

SECTORS – NOTABLE ACTION
MEDIA +3.06%
METAL +2.96%
OIL & GAS +2.02%

Stocks Ban List

(SEBI) F&O ban list (NATIONALUM open at -128.00 and close at +135.60), (OFSS open at -6486.05 and close at +6602.35), (RBLBANK open at -253.05 and close at +259.80), (IRCTC open at -941.50 and close at +970.60), and (BALRAMCHIN open at -378.10 and close at +384.40) 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.

GNFC, INDUSTOWER, GMRINFRA, IDEA, PNB, BANDHANBNK, PEL, PVRINOX, NMDC, BHEL, GRANULES, and INDIACEM stocks has the possibilities of entrance in the ban list.

OFSS, RBLBANK, IRCTC, and BALRAMCHIN stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21200 to 21600 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Sector-Wide Selling Impacts Indian Equity Market Nifty50 Down 1.5%
Indian Equity Benchmarks Retreat in Saturday’s Volatile Trading
Nifty Gaps Up on Strong Global Cues, Ends Range-Bound

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