Indian Indices Recover in Second Half Amid Sectoral Buying

At the close, the Nifty 50 was at 22,529.05 up by 0.12%

Despite early fluctuations, the NSE Nifty 50 index showcased resilience on May 21, opening in the red but closing in the green, marking a modest increase of 0.12%. Notably, it surpassed the 22,500 mark for the second consecutive session, indicative of underlying market strength amidst heightened volatility, reaching near a 20-month high.

Market Analysis Indian markets navigated a volatile session, maintaining stability with the Nifty index managing to hold above 22,500, closing at 22,529.05, up by 27.05 points or 0.12%. Initial losses were offset by a strong rally in the Energy and Metal sectors, as well as positive momentum in Power, Oil & Gas, and PSU Banks, contributing to market recuperation and subsequent gains.

Global Influences While global cues remained mixed, Indian equities diverged from their global counterparts, commencing the week with a subdued performance but gaining traction later in the session. Cautionary remarks from key officials at the U.S. Federal Reserve and foreign investor selling ahead of the final phases of national elections contributed to market volatility.

Outlook and Sector Performance Despite the cautious sentiment, the domestic market trended sideways, halting a three-day streak of gains. Metal stocks witnessed an uptick driven by rising commodity prices, while midcap stocks surged to new highs. As the general election nears its conclusion, market volatility is expected to persist, although the market has nearly recovered losses from previous peaks.

The resilience demonstrated by the Nifty 50 amidst market fluctuations underscores investor confidence in the Indian market’s underlying strength. While external factors continue to influence sentiment, strategic sectoral investments and cautious market participation remain key considerations for investors navigating the current landscape.

Bank Nifty: Down by 0.31%

The Bank Nifty index started the trading session in negative territory, declining by 0.31% and ultimately closing at 48,048.20. Similarly, the BSE Sensex also experienced a downturn, dropping by 0.07% to close at 73,953.31.

In the sectorial front, the metal sector has experienced significant growth, climbing by 3.88%. Leading this upward trend, Hindustan Zinc Ltd. saw an impressive surge of 19.99%, marking a notable highlight in the market. Vedanta Ltd. also contributed to this sector’s strong performance, posting a gain of 7.04%.

Conversely, the Fast-Moving Consumer Goods (FMCG) sector faced a downturn, emerging as the top loser with a decline of 0.45%. Within this sector, United Breweries Ltd. experienced a drop of 2.12%, while Radico Khaitan Ltd. saw a decrease of 1.71%.

Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) exhibited a net selling trend in the Indian markets. The buy value recorded by FIIs/FPIs was Rs. 17,681.01 crore, while the sale value was significantly higher at Rs. 19,555.55 crore. This resulted in a net outflow of Rs. 1,874.54 crore.

On the other hand, Domestic Institutional Investors (DII) showed a net buying trend. The DIIs registered a buy value of Rs. 16,104.49 crore against a sale value of Rs. 12,555.52 crore. This led to a net inflow of Rs. 3,548.97 crore.

Bank Nifty

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

The gainers included Bank of Baroda with a 1.10% increase, State Bank of India with a 1.10% increase, Bandhan Bank with a 0.82% increase, Punjab National Bank with a 0.16% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 1.51% decline, IndusInd Bank with a 1.02% decline, ICICI Bank with a 1.02% decline, HDFC Bank with a 0.60% decline, and Axis Bank with a 0.53% decline. These results suggest that some of the banking stocks not performed better for the day.

Rupee Strengthens Amid Weak US Dollar and Falling Crude Prices

The Indian rupee showcased resilience against the US dollar, closing at 83.31 on Tuesday, marking a gain of 6 paise. This positive trajectory was attributed to the weakened greenback against major currencies globally and a decline in crude oil prices in international markets.

Market Dynamics Despite the rupee’s upward momentum, a subdued performance in domestic equity markets tempered its ascent. Throughout the trading session, the rupee exhibited strength, opening at 83.32 and reaching an intraday high of 83.26, with fluctuations between a low of 83.36. Ultimately, settling at 83.31, the rupee reflected a notable improvement from its previous close of 83.37 on Friday.

Factors Driving the Rupee’s Performance The depreciation in crude oil prices and renewed foreign investments bolstered the rupee’s position. Additionally, the US dollar’s softening, fueled by expectations of rate cuts by the Federal Reserve, contributed to the rupee’s gains, although hawkish comments from Fed officials provided some support to the dollar at lower levels.

Global Market Indicators Concurrently, the dollar index, measuring the greenback’s strength against a basket of currencies, experienced a marginal decline of 0.07% to 104.38. Moreover, Brent crude futures, a key indicator in the oil market, saw a notable decrease of 0.97%, closing at USD 82.90 per barrel.

The rupee’s performance against the US dollar reflects a complex interplay of domestic and global economic factors. While positive trends such as declining oil prices and foreign inflows support the rupee, cautious market sentiments and global currency dynamics necessitate vigilance for investors and traders alike.

Stocks Highlights

Hindalco Industries Ltd. Shows Positive Movement

Hindalco Industries Ltd. witnessed a notable increase in its share price, rising by 4.79% from its previous close of Rs 660.35 to reach Rs 692.00. Analyzing its financial performance, the company allocated 1.63% of its operating revenues towards interest expenses and 5.85% towards employee costs in the fiscal year ending 31 Mar, 2023. In terms of stock returns, Hindalco outperformed the Nifty 100 index, delivering a three-year return of 69.41% compared to Nifty 100’s 52.57%. However, when compared to Nifty Metal, Hindalco’s returns stood at 69.41% against Nifty Metal’s 88.44% over the same period.

Nestle India Ltd. Experiences Decline

Conversely, Nestle India Ltd. observed a decrease in its share price by -1.61% from its previous close of Rs 2,504.40, settling at Rs 2,464.00. Despite this decline, the company reported a noteworthy quarterly revenue growth of 14.33%, the highest in the last three years. In terms of stock returns, Nestle India trailed behind the Nifty 100 index with a three-year return of 43.13% compared to Nifty 100’s 52.57%. However, it exceeded its own three-year revenue CAGR with an annual revenue growth of 27.51%, outperforming its CAGR of 18.09%. When compared to Nifty FMCG, Nestle India’s stock generated a return of 43.13% versus Nifty FMCG’s 59.17% over the three-year period.

Advance Decline Ratio

Today, the advance-decline ratio was 0.68, and the market breadth was negative. The volatility index India Vix increased by 6.26 percent to settle at 21.81 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1066
Decliners – 1566
52Wk High – 202
52Wk Low – 25
High Band Hitters – 149
Low Band Hitters – 103
200d SMA – 20924
50d SMA – 22316
20d SMA – 22373

Top Gainers and Losers Stocks

The top gainers were Hindalco (+4.79%), Coal India (+4.49%), Tata Steel (+3.63%), JSW Steel (+3.53%), and Adani Ports (+3.16%).

The top losers were Nestle India (-1.61%), Hero MotoCorp (-1.27%), Maruti (-1.10%), IndusInd Bank (-1.02%), and ICICI Bank (-1.02%).

Top Gainers and Losers Sectors

The top gainers sector were Metal (+3.88%), Media (+1.25%), Oil & Gas (+0.59%), Pharma (+0.51%), and Consumer Durables (+0.22%).

The top losers sector were FMCG (-0.45%), Financial Services (-0.30%), IT (-0.18%), and Realty (-0.01%).

SECTORS – NOTABLE ACTION
METAL +3.88%
MEDIA +1.25%
OIL & GAS +0.59%
FMCG -0.45%
FINANCIAL SERVICES -0.30%
IT -0.18%

Stocks Ban List

(SEBI) F&O ban list (ABCAPITAL open at +224.50 and close at -225.20), (BANDHANBNK open at +183.00 and close at +184.10), (INDIACEM open at +212.80 and close at -210.55), (PEL open at +831.00 and close at -818.65), (ZEEL open at +140.95 and close at +147.60), (BIOCON open at +308.00 and close at +307.60), (GRANULES open at +407.95 and close at +409.10), (BALRAMCHIN open at +381.20 and close at -377.70), (IDEA open at +13.55 and close at +13.55), (GMRINFRA open at +86.20 and close at -85.55), (BSOFT open at -614.15 and close at -595.00), (SAIL open at +170.15 and close at +174.35), and (HINDCOPPER open at +395.00 and close at +399.15) 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, NATIONALUM, IDFCFIRSTB, ABFRL, CANBK, IEX, GNFC, PVRINOX, TATACHEM, and LICHSGFIN stocks has the possibilities of entrance in the ban list.

IDEA, GMRINFRA, BSOFT, SAIL, and HINDCOPPER stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 22350 to 22700 is the Nifty 50 trading range.

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