Indian Equity Markets Start Strong, But Financial Sector Weighs Them Down

At the close, the Nifty 50 was at 22,442.70 down by 0.15%

Today, the NSE Nifty 50 commenced on a positive note, but concluded the session in the red, exhibiting a slight decline of 0.15%. Despite opening nearly 0.5% higher, India’s benchmark Sensex and Nifty remained flat, encountering selling pressure, particularly in PSU stocks. The Nifty closed at 22,442.70, down by 33.15 points or 0.15%. Among sectors, the PSU Bank index suffered the most significant loss, plummeting by 3.66%, while the Realty index outperformed, registering a gain of over 2.76%.

Technically, after an initial surge, profit booking at higher levels was observed in the benchmark indices. The market displayed lackluster activity throughout the day, influenced by mixed signals. Despite modest gains in realty and IT sectors, energy and metal sectors experienced declines.

The surge in India VIX, the volatility index, is beginning to impact market sentiment, potentially exerting downward pressure on the Nifty. While the recovery in US markets and the resilience of certain heavyweights have cushioned some impact, a clear break below 22,400 in the Nifty could dampen bullish sentiment.

Additionally, domestic indices were buoyed by gains in private banks and IT stocks, recovering from significant sell-offs experienced last week. However, concerns over PSU banks’ underperformance, driven by RBI’s tighter lending norms, and broader selling pressure due to valuation concerns and profit booking remain prevalent.

Globally, weaker US payroll data has raised expectations of potential Fed rate cuts, with investors closely monitoring FED speakers for insights on future monetary policy. The market remains cautiously optimistic amidst evolving domestic and global economic dynamics.

Bank Nifty: Down by 0.06%

The Bank Nifty commenced the day on a positive note, opening in the green but ultimately closing in the red with a marginal decline of 0.06% to settle at 48,895.30. Similarly, the BSE Sensex exhibited a mixed performance, edging up by a mere 0.02% and concluding the day in the green, reaching a high of 73,895.54.

The day’s trading session witnessed a delicate balance between gains and losses, reflecting the prevailing market uncertainty and cautious investor sentiment. Despite the initial optimism, both indices experienced fluctuations throughout the day, ultimately resulting in divergent closing trends.

On the sectorial front, the real estate sector has experienced notable gains, with an impressive surge of 2.76%. Leading this upward trend are key players such as Godrej Properties Ltd., marking a substantial gain of 10.48%, and Brigade Enterprises Ltd., demonstrating a commendable rise of 8.53%.

Conversely, the consumer durables sector has encountered a downturn, witnessing a decline of 2.55%. Among the top performers in this sector, Titan Company Ltd. experienced a significant loss of -7.07%, while Whirlpool Of India Ltd. recorded a decrease of -2.88%.

Foreign Institutional Investors (FII/FPI) engaged in buying stocks amounted to a value of Rs. 12,598.23 crore, while their sales stood at Rs. 14,766.98 crore. Consequently, the net value of FII/FPI activity resulted in a deficit of Rs. -2,168.75 crore.

On the other hand, Domestic Institutional Investors (DII) demonstrated a contrasting trend, with buying activity totaling Rs. 13,791.15 crore and sales reaching Rs. 13,009.76 crore. As a result, the net value of DII activity showed a surplus of Rs. 781.39 crore.

Bank Nifty

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

The gainers included Kotak Bank with a 5.02% increase, IndusInd Bank with a 0.90% increase, ICICI Bank with a 0.61% increase, HDFC Bank with a 0.27% increase, and Axis Bank with a 0.26% increase.

On the other hand, the biggest losers in the sector included Punjab National Bank with a 6.41% decline, Bank of Baroda with a 4.04% decline, State Bank of India with a 2.64% decline, AU Bank with a 1.89% decline, and Federal Bank with a 1.30% decline. These results suggest that some of the banking stocks performed better for the day.

Stocks Highlights

Britannia Industries Ltd. observed a commendable 6.60% increase in its share price, rising to Rs 5,057.90 from its previous close of Rs 4,744.60. However, the company faced a quarterly revenue decline of 4.18%, marking its lowest performance in the last three years. Despite this, Britannia’s stock returns, compared to Nifty 100, demonstrated a three-year return of 37.44%.

Moreover, the company’s expenditure remained relatively low, with less than 1% of operating revenues allocated towards interest expenses and 4.23% towards employee costs for the year ending March 31, 2024. This indicates prudent financial management amid challenging market conditions.

In contrast, Titan Company Ltd. experienced a notable -7.07% decrease in its share price, trading at Rs 3,284.00 from its previous close of Rs 3,533.90. Despite the decline in share price, Titan showcased robust return on equity (ROE) performance, delivering 37.21% in the fiscal year ending March 31, 2024, outperforming its five-year average of 25.48%.

Titan’s expenditure on interest and employee costs remained within reasonable bounds, with 1.21% allocated towards interest expenses and 3.65% towards employee costs for the same fiscal year. Additionally, Titan’s stock returns significantly outpaced Nifty 100, exhibiting a remarkable three-year return of 144.66%. This indicates Titan’s resilience and potential for long-term growth, despite short-term market fluctuations.

Advance Decline Ratio

Today, the advance-decline ratio was 0.42, and the market breadth was negative. The volatility index India Vix increased by 13.56 percent to settle at 16.60 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 770
Decliners – 1848
52Wk High – 140
52Wk Low – 21
High Band Hitters – 101
Low Band Hitters – 107
200d SMA – 20797
50d SMA – 22299
20d SMA – 22454

Top Gainers and Losers Stocks

The top gainers were Britannia (+6.60%), Kotak Bank (+5.02%), TCS (+2.05%), Hindustan Unilever (+1.80%), and M&M (+1.55%).

The top losers were Titan (-7.07%), Adani Enterprises (-4.05%), Coal India (-3.07%), BPCL (-2.89%), and SBIN (-2.64%).

Top Gainers and Losers Sector

The top gainers sector were Realty (+2.76%), IT (+0.94%), FMCG (+0.71%), and Pharma (+0.37%).

The top losers sector were Consumer Durables (-2.55%), Media (-2.16%), Oil & Gas (-1.75%), Metal (-0.93%), and Financial Services (-0.25%).

SECTORS – NOTABLE ACTION
REALTY+2.76%
IT +0.94%
FMCG +0.71%
CONSUMER DURABLES -2.55%
MEDIA -2.16%
OIL & GAS -1.75%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at -393.00 and close at -385.65), (GMRINFRA open at -85.95 and close at -83.30), (IDEA open at -13.25 and close at -12.80), (ABFRL open at -258.00 and close at -250.50), and (BIOCON open at -307.45 and close at -300.60) 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.

SAIL, ZEEL, LICHSGFIN, INDIACEM, HINDCOPPER, PEL, and CANBK stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 22300 to 22600 is the Nifty 50 trading range.

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