Indian Markets in Turmoil for Third Straight Session – Can You Guess Why?

At the close, the Nifty 50 was at 23,992.55 down by 0.26%

On August 6, the NSE Nifty 50 began the day in the green but ended down by 0.26%, closing at 23,992.55, below the 24,000 mark. After a promising start, the Indian markets faltered, marking their third consecutive session of losses.

This decline was attributed to weak global cues and growing recession concerns, which overshadowed the initial gains. Despite a robust opening benchmark indices rose over 1%, profit-taking led to a downturn and the Nifty ending the day down by 63.05 points.

A Bearish side-by-side black candle pattern emerged, reflecting investor caution. Sector performance was mixed; Realty and IT sectors saw gains, while PSU Banks and Autos corrected the most. Broader indices, including Midcaps and Smallcaps, also underperformed, falling by 0.61% and 0.39%, respectively.

Dalal Street’s turmoil was compounded by a global sell-off and foreign investors pulling out, wiping out over Rs 15 lakh crore in investor wealth. Despite this, some stocks, bolstered by strong earnings and budget boosts, managed to weather the storm.

As the market faces appreciating Yen, weak U.S. economic data, and rising geopolitical tensions, investors are shifting towards defensive sectors like FMCG, IT, and pharma. With a potential rebound in crude prices and expected rate cuts by the U.S. Fed and RBI, will the Indian market find stability, or is further volatility ahead?

Bank Nifty: Down by 0.69%

The Bank Nifty initially opened in positive territory but ended the day with a 0.69% drop, closing at 49,748.30. Similarly, the BSE Sensex also experienced a downturn, falling by 0.21% to settle at 78,593.07. Both indices mirrored the overall market sentiment, which was dampened by global uncertainties and profit-taking pressures.

In the sectorial front, Realty stocks were the undisputed champions, surging by a robust 0.84%. Godrej Properties and Brigade Enterprises led the charge with impressive gains of 3.49% and 2.84%, respectively. These gains painted a rosy picture for the real estate industry.

However, the financial services sector encountered a stormy weather, plunging by 1.07%. LIC Housing Finance and Power Finance Corporation were the worst hit, shedding 4.84% and 4.30% of their value.

Foreign Institutional Investors (FII) were net sellers on August 6, with a total buy value of Rs. 14,389.37 crore and a sale value of Rs. 17,920.61 crore, resulting in a net outflow of Rs. 3,531.24 crore.

Conversely, Domestic Institutional Investors (DII) showed strong buying activity, with a buy value of Rs. 14,422.78 crore and a sale value of Rs. 11,065.33 crore, leading to a net inflow of Rs. 3,357.45 crore.

Bank Nifty

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

The gainers included AU Bank with a 0.47% increase, and Punjab National Bank with a 0.04% increase.

On the other hand, the biggest losers in the sector included State Bank of India with a 1.47% decline, HDFC Bank with a 0.81% decline, Federal Bank with a 0.75% decline, IndusInd Bank with a 0.71% decline, and Axis Bank with a 0.55% decline. These results suggest that most of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 06th August, 2024

Rupee Hits Rock Bottom Amidst Global Storm

The Indian rupee plunged to a historic low on Tuesday, succumbing to the pressure of a weakening Asian currency landscape and robust dollar demand. The local currency touched an all-time low of 83.96 per US dollar before settling at 83.9525, marking a 0.1% decline compared to the previous session’s close.

A looming US economic slowdown and the unwinding of carry trades involving the Chinese yuan have significantly impacted the rupee’s value this week. However, the Reserve Bank of India (RBI) has been actively intervening in the foreign exchange market to stabilize the rupee. State-run banks, acting as the RBI’s proxy, sold dollars during the day, helping to contain the rupee’s fall.

The broader dollar index strengthened by 0.2%, and most Asian currencies, particularly the Malaysian ringgit, experienced substantial losses. Despite a slight easing, dollar-rupee forward premiums remain elevated, reflecting market expectations of a weaker rupee.

The question is: Can the RBI’s interventions effectively shield the rupee from further depreciation, or will the ongoing global economic challenges continue to exert downward pressure on the Indian currency?

Stocks Highlights

Britannia Industries Ltd. recently saw a 2.81% rise in its share price, climbing from Rs 5,697.90 to Rs 5,858.00. Despite this upward trend, a weekly stochastic crossover observed on August 2, 2024, suggests potential bearish signals ahead. Historically, such signals have led to an average decline of -4.89% over a seven-week period in the last decade.

Nevertheless, Britannia has outperformed the Nifty 100 with a 57.79% return over the past three years compared to the Nifty’s 51.59%. The company also maintains low financial strain, with interest expenses under 1% of operating revenues and employee costs at 4.23% for the year ending March 31, 2024.

Conversely, HDFC Life Insurance Company Ltd. experienced a -4.28% drop in its share price, falling from Rs 710.90 to Rs 680.50. Over the past six years, only 1.32% of trading sessions saw intraday gains exceeding 5%. Despite achieving an impressive annual revenue growth of 42.38%, significantly higher than its 3-year CAGR of 12.22%, HDFC Life’s 3-year return of 6.18% lagged behind the Nifty 100’s 51.59%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.52, and the market breadth was negative. The volatility index India Vix decreased by 7.97 to settle at 18.74 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 930
Decliners – 1777
52Wk High – 72
52Wk Low – 51
High Band Hitters – 108
Low Band Hitters – 131
200d SMA – 22040
50d SMA – 23883
20d SMA – 24559

Top Gainers and Losers Stocks

The top gainers were Britannia (+2.81%), JSW Steel (+2.35%), Tech Mahindra (+1.74%), Larsen & Toubro (+1.70%), and Hindustan Unilever (+1.54%).

The top losers were HDFC Life (-4.28%), SBI Life (-2.43%), BPCL (-1.84%), Shriram Finance (-1.71%), and SBIN (-1.47%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+0.84%), IT (+0.49%), Metal (+0.30%), Media (+0.15%), and FMCG (+0.09%).

The top losers sector were Financial Services (-1.07%), Auto (-0.75%), Consumer Durables (-0.71%), Oil & Gas (-0.48%), and Pharma (-0.09%).

SECTORS – NOTABLE ACTION
REALTY +0.84%
IT +0.49%
METAL +0.30%
FINANCIAL SERVICES -1.07%
AUTO -0.75%
CONSUMER DURABLES -0.71%

Stocks Ban List

(SEBI) F&O ban list (INDIACEM open at +370.05 and close at -363.10), (INDIAMART open at -2698.50 and close at +2678.30), (HINDCOPPER open at -295.00 and close at -283.65), (BSOFT open at +593.00 and close at -576.20), (ABCAPITAL open at +207.75 and close at -204.17), (RBLBANK open at -218.00 and close at -211.92), (CHAMBLFERT open at -509.70 and close at -492.00), (GNFC open at -660.00 and close at -642.30), and (GRANULES open at +645.00 and close at +649.00) 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.

MANAPPURAM, LICHSGFIN, EXIDEIND, BANDHANBNK, PNB, IDFCFIRSTB, and ABFRL stocks has the possibilities of entrance in the ban list.

GNFC, and GRANULES stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 23750 to 24350 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Nifty’s Mysterious Plunge: Could the US Payroll Reveal Hidden Secrets?
Will Today’s Unexpected Surge in NSE Nifty 50 Hint at a Bigger Market Move?
Nifty’s Relentless Rise: What’s Propelling This Rally Amid Fed Uncertainty?

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