Indian Stocks Give Mixed Signals – Banks weak, IT & Pharma strong

At the close, the Nifty 50 was at 19,597.30 up by 0.41%

Today, the NSE Nifty 50 commenced on a strong note, experiencing a substantial increase of 0.41 percent before concluding the trading session positively in the green zone. The Nifty index achieved an impressive performance, nearing the 19600 mark. This upward trajectory demonstrates the market’s resilience and potential for growth.

The week initiated on an optimistic trajectory, witnessing a buoyant start for equity indices that culminated in a second successive session of gains. This positive momentum was underpinned by a consistent upward movement in various Asian indices, instilling confidence in the market. However, the influence of sluggishness in European markets tempered the extent of gains experienced in the domestic scenario.

As the week progresses, the market’s trajectory may transition into a range-bound pattern, with a nuanced bias. The impending announcement of the Reserve Bank of India’s (RBI) monetary policy holds sway over market sentiment, potentially steering the direction of key indices. The market’s response to this announcement could be pivotal in shaping the short-term outlook.

Of equal significance are the impending unveilings of the Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) figures, scheduled for Friday. These economic indicators are poised to exert notable influence on the RBI’s interest rate determination and offer valuable insights into the near to medium-term economic landscape.

Market Recovery Driven by IT and Pharma Sectors

The ongoing market recovery is being propelled by the resilient performance of IT giants, complemented by significant buying activity within the pharmaceutical sector. This collective strength is contributing to the overall rebound, even as other segments of the market exhibit a more varied pattern of trends.

A decisive breakthrough at this juncture could potentially lend further momentum to the ongoing rebound. Profit-taking activities might resume, potentially leading to a pullback.

Bank Nifty: Down by 0.09%

The Bank Nifty exhibited a favorable commencement by opening in the green zone; however, it experienced a marginal decline of 0.09 percent, ultimately concluding the trading session in the red zone at a value of 44,837.50. In parallel, the BSE Sensex displayed a notable ascent, recording a substantial increase of 0.35 percent and concluding the day’s trading activities positively in the green zone, reaching an impressive high of 65,953.48. These dynamic movements underscore the intricate interplay of market forces and the potential for lucrative opportunities.

Pharma Gains Lead, Media Sees Setbacks

In today’s sectorial performance analysis, the pharmaceutical sector emerged as a standout performer, achieving a notable gain of 1.56%. Among the prominent players within this sector, Sanofi India Limited showcased remarkable growth, securing an impressive 4.82% increase in its valuation. Similarly, Divi’s Laboratories Limited demonstrated robust momentum, garnering a significant gain of 4.51%.

On the flip side, the Media sector faced a minor setback, registering a decline of 0.20%. Among the entities within this sector, Dish TV India Limited experienced a noticeable decrease of -4.30%, while Nazara Technologies Limited also encountered a dip, albeit of a lesser magnitude, at -1.80%.

As the pharmaceutical sector continues to demonstrate resilience and growth potential, prudent investors may find opportunities for strategic positioning. Conversely, the media sector’s challenges necessitate careful evaluation, encouraging stakeholders to consider diversification and risk mitigation strategies.

Foreign Institutional Investors/Foreign Portfolio Investors exhibited a net sale value of -Rs. 1,892.77 crore, with a buy value of Rs. 11,709.39 crore and a sale value of Rs. 13,602.16 crore. Domestic Institutional Investors showcased a net value of Rs. 1,080.80 crore, having purchased stocks worth Rs. 7,491.40 crore and sold stocks amounting to Rs. 6,410.60 crore.

Bank Nifty

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

The gainers included Punjab National Bank with a 1.08% increase, Bandhan Bank with a 0.61% increase, ICICI Bank with a 0.46% increase, IDFC First Bank with a 0.34% increase, and IndusInd Bank with a 0.21% increase. On the other hand, the biggest losers in the sector included AU Bank with a 1.89% decline, State Bank of India with a 0.86% decline, Axis Bank with a 0.50% decline, Bank of Baroda with a 0.42% decline, and Kotak Bank with a 0.32% decline. These results suggest that some banking stocks performed better for the day.

Buzz

Indian Rupee Strengthens Amidst Global Factors

The Indian rupee showcased resilience against the US dollar, registering a modest appreciation of 0.10rs to settle at 82.75. This upswing was buoyed by subdued Non Farm Payroll (NFP) data in the US, which led to a reversal in the dollar index’s gains.

Market participants keenly await the upcoming Consumer Price Index (CPI) data, a significant event that could potentially trigger fluctuations in the rupee’s valuation. Anticipation surrounds the possibility of an escalated US interest rate, potentially bolstering the dollar’s position if US CPI figures exhibit an increase. The rupee’s projected range is anticipated to hover between 82.50 and 83.15 prior to the CPI data release.

In the realm of commodities, the global oil benchmark, Brent crude, experienced a slight contraction of 0.73%, settling at $85.63 per barrel. Curiously, despite a tightening supply landscape driven by Saudi Arabia and Russia’s decision to curtail production output in September, crude oil futures traded marginally lower on Monday morning. This intriguing dynamic underscores the intricate interplay between supply considerations and market sentiment.

Buzzing

Divi’s Laboratories Ltd.: Resilient Performance Amidst Challenges

Divi’s Laboratories Ltd. exhibited a commendable uptick in share price, rising by 4.51% from its prior closing value of Rs 3,745.40. The stock’s latest trading price stands at Rs 3,914.35. Over the past three years, Divi’s Laboratories Ltd. has delivered a return of 34.49%, which, while noteworthy, contrasts with the Nifty 100’s robust return of 71.42%.

A notable aspect to consider is the company’s recent sales contraction, with a decline of 10.6%. This marks the first instance of revenue contraction in the past three years, warranting a closer examination of market dynamics and business strategies.

Moreover, Divi’s Laboratories Ltd. has announced a dividend of Rs 30.0 per share, a move that reflects the company’s commitment to its shareholders. The dividend declaration, with a record date of 11 Aug, 2023, underscores management’s strategic financial decisions.

Britannia Industries Ltd.: Navigating Market Flux

In contrast, Britannia Industries Ltd. observed a -2.68% decrease in share price from its previous closing at Rs 4,798.50. The stock’s current trading price stands at Rs 4,670.00. A noteworthy technical indicator, the Weekly MACD crossover, emerged in the week ending Aug 04, 2023. Historical analysis reveals an average price decline of -6.44% within seven weeks following this signal over the past decade.

Britannia Industries Ltd. has demonstrated robust annual revenue growth, achieving a rate of 15.02%. This outperformance is particularly noteworthy when compared to its 3-year compound annual growth rate (CAGR) of 11.49%.

Further bolstering Britannia’s position is the company’s impressive Return on Equity (ROE) of 65.69% for the year ending Mar 31, 2023. This figure surpasses its five-year average of 45.21%, indicating consistent value creation for shareholders.

Advance Decline Ratio

Today, the advance-decline ratio was 1.17, and the market breadth was positive. The volatility index India Vix increased by 5.01 percent to settle at 11.10 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1283
Decliners – 1093
52Wk High –  168
52Wk Low – 19
High Band Hitters – 105
Low Band Hitters – 63
200d SMA – 18241
50d SMA – 19162
20d SMA – 19638

Top Gainers and Losers Stocks

The top gainers were Divi’s Laboratories (+4.51%), M&M (+4.33%), SBI Life (+2.50%), Sun Pharmaceutical (+2.04%), and LTIM (+2.01%).

The top losers were Britannia (-2.68%), Bajaj Auto (-0.87%), SBIN (-0.86%), Tata Motors (-0.81%), and Axis Bank (-0.50%).

Top Gainers and Losers Sector

The top gainers sectors were Pharma (+1.56%), IT (+1.13%), Realty (+0.58%), Auto (+0.41%), and Consumer Durables (+0.32%).

The top losers sectors were Media (-0.20%), Metal (-0.01%).

The Nifty Midcap 50 was up by 0.43 percent, while the Nifty Small Cap 50 was up by 0.40 percent on the day.

The Nifty Midcap 50 index currently closed at 10,787.80, while the Nifty Small Cap 50 index currently closed at 5,318.50.

SECTORS – NOTABLE ACTION
PHARMA +1.56%
IT +1.13%
REALTY +0.58%
MEDIA -0.20%
METAL -0.01%

Stocks Ban List

(SEBI) F&O ban list  (IBULHSGFIN open at +167.00 and close at -165.35), (HINDCOPPER open at +155.50 and close at -148.70), (GNFC open at +585.75 and close at -559.70), and (PEL open at -970.00 and close at +982.40) are not currently on the stock exchange.

The Securities and Exchange Board of India (SEBI) has banned IBULHSGFIN, HINDCOPPER, GNFC, and PEL from trading in the futures and options (F&O) segment of 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, BHEL, ZEEL, CANFINHOME, PNB, RBLBANK, DELTACORP, VEDL, CHAMBLFERT, and LICHSGFIN stocks has the possibilities of enterance in the ban list.

PEL stock has the possibilities of exit from ban list.

Daily Pivots

As per the above pivots data, 19530 to 19650 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Markets Rebound, Nifty Gains Over Half a Percent to Settle at 19,517
Market Falls Below 19,400 Amid Weak Global Cues and Fitch Downgrade
Sharp Sell-Off in Indian Equity Indices Post Fitch Ratings’ US Credit Downgrade
NSE Nifty 50 Shows Early High but Closes Lower, Dips Below 19750 Mark

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