Indian Benchmarks Surge Against the Odds! What’s Driving This Rally?

At the close, the Nifty 50 was at 24,502.15 up by 0.77%

Today, NSE Nifty 50 started strong, gaining 0.77% and closing above 24,500. The Nifty50 indices reached record highs, driven by a robust rally in IT stocks. This surge followed Tata Consultancy Services’ promising Q1 results, indicating early recovery signs in the IT sector.

The rally, ignited in early June by national elections ensuring policy continuity, strong economic growth prospects, and record-high mutual fund inflows, saw a renewed boost from IT heavyweights. Despite earlier fears of slowing growth due to high US interest rates, IT stocks have now joined the over month-long market rally.

Nifty’s daily chart showed a long bull candle with a minor upper shadow, suggesting the market’s resilience. After a brief dip, the index resumed its upward momentum, similar to the pattern observed on June 24. The bulls returned with vigor on July 12, pushing benchmarks to fresh record levels. By close, Nifty was up 186.20 points or 0.77% at 24,502.15.

Global

Despite weak global cues, Nifty extended its gains throughout the session, breaching 24,500 intraday and nearing 24,600. This recovery was led by IT majors and bolstered by positive earnings from TCS, lifting market sentiment.

Looking ahead, sustained levels above 24,500 are crucial for Nifty to reach the 25,000 milestone. A “Purchase on pullbacks” approach is advisable, focusing on stock selection and trade management, while keeping an eye on global indices, especially the US markets. The market’s optimism is further fueled by strong IT results, a potential rate cut, and upcoming budget expectations.

Multiple tailwinds, including solid IT earnings and a drop in US inflation, have revitalized the market. With the possibility of a rate cut in September, as evidenced by the falling dollar index, stock-specific moves are expected to gain momentum during the ongoing earnings season. The IT sector remains in the spotlight, promising a bright outlook ahead.

Bank Nifty: Up by 0.02%

The Bank Nifty kicked off the day on a positive note, rising by 0.02% to close at 52,278.90. This slight gain reflects the ongoing stability in the banking sector, contributing to overall market confidence. Similarly, the BSE Sensex also showed strength, increasing by 0.78% and finishing the day at 80,519.34.

In the sectorial front, IT giants like Coforge and Tata Consultancy Services (TCS) were the driving force behind the sector’s impressive 4.53% gain. Coforge led the pack with a remarkable 7.29% surge, closely followed by TCS with a robust 6.59% increase.

In stark contrast, the realty sector bore the brunt of today’s market volatility. The sector plunged by 1.50%, with Macrotech Developers and Sobha Ltd. leading the decline. Macrotech Developers suffered a heavy loss of 5.59%, while Sobha Ltd. witnessed a 3.06% drop.

Foreign Institutional Investors (FIIs) showed strong buying interest today, with a buy value of Rs. 19,113.62 crore and a sale value of Rs. 15,092.02 crore, resulting in a net inflow of Rs. 4,021.60 crore.

Conversely, Domestic Institutional Investors (DIIs) had a different story, with a buy value of Rs. 14,490.17 crore against a sale value of Rs. 16,141.62 crore, leading to a net outflow of Rs. 1,651.45 crore.

Bank Nifty

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

The gainers included AU Bank with a 1.79% increase, Axis Bank with a 1.64% increase, Federal Bank with a 1.19% increase, State Bank of India with a 0.50% increase, and IndusInd Bank with a 0.40% increase.

On the other hand, the biggest losers in the sector included Bank of Baroda with a 2.28% decline, Bandhan Bank with a 1.92% decline, Punjab National Bank with a 1.39% decline, Kotak Bank with a 0.57% decline, and ICICI Bank with a 0.32% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver

Today 22 Carat Gold Price Per Gram in India (INR)

Today 24 Carat Gold Price Per Gram in India (INR)

Today Silver Price 1 Gram/KG in India (INR)

Stocks Highlights

Tata Consultancy Services Ltd. (TCS) saw its share price surge by 6.59%, jumping from Rs 3,923.70 to a robust Rs 4,182.45. A standout feature of TCS is its impressive financial health; the company has been operating debt-free for the past five years. Additionally, TCS has managed its expenses efficiently, allocating less than 1% of its operating revenues towards interest expenses and 58.17% towards employee costs for the year ending March 31, 2024.

The market is buzzing with optimism for TCS as a buy signal emerged with a 20-day moving average crossover. Historically, this signal has led to an average price gain of 2.2% within seven days over the last five years, indicating that bulls are firmly back on track. Investors are keenly watching TCS, anticipating continued growth and stability from this zero-debt titan.

Asian Paints Ltd. experienced a slight dip in its share price, falling by 1.01% from Rs 3,022.05 to Rs 2,991.40. Despite this minor setback, the company maintains a solid financial foundation, with interest expenses constituting less than 1% of its operating revenues and employee costs at 6.55% for the fiscal year ending March 31, 2024.

A bullish signal for Asian Paints appeared with a 200-day moving average crossover on July 10, 2024. Historically, this indicator has led to an average price gain of 3.59% within 30 days over the past five years. However, when comparing returns, Asian Paints provided a modest 3-year return of 2.67%, while the Nifty 100 delivered a remarkable 52.57%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.68, and the market breadth was negative. The volatility index India Vix decreased by 1.92 to settle at 13.73 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1070
Decliners – 1583
52Wk High – 164
52Wk Low – 11
High Band Hitters – 101
Low Band Hitters – 78
200d SMA – 21645
50d SMA – 23183
20d SMA – 23993

Top Gainers and Losers Stocks

The top gainers were TCS (+6.59%), Wipro (+4.66%), HCL Technologies (+3.30%), Infosys (+3.25%), and Tech Mahindra (+3.04%).

The top losers were Asian Paint (-1.01%), Divi’s Laboratories (-0.93%), Maruti (-0.91%), Titan (-0.84%), and Hindalco (-0.83%).

Top Gainers and Losers Sectors

The top gainers sector were IT (+4.53%), Media (+2.08%), Oil & Gas (+0.59%), FMCG (+0.35%), and Pharma (+0.05%).

The top losers sector were Realty (-1.50%), Consumer Durables (-0.58%), Auto (-0.44%), and Metal (-0.15%).

SECTORS – NOTABLE ACTION
IT +4.53%
MEDIA +2.08%
OIL & GAS +0.59%
REALTY -1.50%
CONSUMER DURABLES -0.58%
AUTO -0.44%

Stocks Ban List

(SEBI) F&O ban list (RBLBANK open at +246.40 and close at +246.05), (INDIACEM open at +304.30 and close at -297.85), (CHAMBLFERT open at -496.40 and close at +504.95), (GNFC open at -687.20 and close at -685.95), (INDUSTOWER open at +396.50 and close at -392.00), (BALRAMCHIN open at +449.00 and close at -440.35), (PEL open at +935.00 and close at +938.00), (IEX open at -178.00 and close at +177.13), (ABFRL open at -325.00 and close at -323.20), and (BANDHANBNK open at +197.19 and close at -192.60) 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.

GMRINFRA, TATACHEM, HINDCOPPER, IDFCFIRSTB, NMDC, SAIL, IDEA, RAMCOCEM, BSOFT, IRCTC, BIOCON, and PNB stocks has the possibilities of entrance in the ban list.

PEL, IEX, ABFRL and BANDHANBNK stocks has the possibilities of exit from ban list.

Daily Pivots

As per the above pivots data, 24200 to 24700 is the Nifty 50 trading range.

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