Investor Confidence Soars Nifty Jumps 1% Pre-Budget and Before Fed Meeting

At the close, the Nifty 50 was at 21,725.70 up by 0.95%

The NSE Nifty 50 exhibited resilience today, navigating through early losses to ultimately close in the green, recording a significant 0.95 percent gain. Starting the day with a seesaw movement, the market rebounded robustly, surpassing the 21,700 mark. HDFC Bank and Reliance Industries played pivotal roles, driving benchmark equity indices nearly 1 percent higher, closing at 21,725.70.

Investors are adopting a cautious stance in anticipation of the temporary budget and the US Federal Reserve’s looming interest rate decision. Positive movements were observed across various sectors, with Pharma and PSU Banks ending the day on a high note. However, global markets remain on edge, closely monitoring the Fed’s commentary on potential rate cuts, speculated to occur in June 2024.

Ahead of the temporary budget, market analysts foresee a focus on a lower fiscal deficit propelled by robust tax revenues. The strategy of buying on dips remains effective in the current volatile market scenario. The pharma sector, boasting a positive earnings outlook, has investors keenly observing any hints regarding the taxation of capital market-related investments in the upcoming budget. As the market cautiously anticipates major events, including the Fed decision and the temporary budget, a sentiment of cautious optimism prevails.

Bank Nifty: Up by 1.39%

The Bank Nifty and BSE Sensex exhibited commendable resilience, transforming initial losses into substantial gains. The Bank Nifty, opening in the red, saw an impressive upward swing of 1.39 percent, concluding the day in the green at 45,996.80. Simultaneously, the BSE Sensex recorded a notable 0.86 percent increase, reaching a high of 71,752.11 at the closing bell.

On the sectorial front, the pharmaceutical sector emerged as a standout performer, experiencing a robust gain of 2.68% in a market marked by fluctuating trends. Dr. Reddy’s Laboratories Ltd. led the charge with an impressive gain of 4.78%, followed closely by Gland Pharma Ltd. with a gain of 3.43%, and Biocon Ltd. showcasing a substantial increase of 3.15%.

Foreign Institutional Investors (FII/FPI) demonstrated a notable engagement. The buy value stood at Rs. 26,054.03 crore, while the sale value was Rs. 24,393.31 crore, resulting in a positive net value of Rs. 1,660.72 crore. This signifies a net inflow into the market by these institutional investors. Simultaneously, Domestic Institutional Investors (DII) were actively involved, with a buy value of Rs. 15,596.89 crore and a sale value of Rs. 13,053.96 crore. The net value for DII transactions stood at Rs. 2,542.93 crore, showcasing a substantial net inflow.

Bank Nifty

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

The gainers included Punjab National Bank with a 4.81% increase, Bank of Baroda with a 4.53% increase, State Bank of India with a 2.36% increase, Bandhan Bank with a 2.30% increase, and AU Bank with a 1.88% increase. These results suggest that most of the banking stocks performed better for the day.

Rupee Gains Ground Amidst Domestic Market Positivity and Interim Budget Anticipation

The Indian rupee exhibited resilience on Wednesday, appreciating by 6 paise against the US dollar to settle at 83.04, propelled by a positive domestic market sentiment. As market participants tread cautiously ahead of the impending interim Budget presentation on February 1, the rupee’s upward momentum was somewhat restrained by the strengthening US dollar in the global market.

At the interbank foreign exchange market, the rupee opened at 83.11 against the greenback, witnessing intraday fluctuations between 83.12 and 83.01. Despite these oscillations, the local unit closed higher at 83.04 against the dollar, reflecting a 6 paise gain from its previous close.

Analysts attribute the rupee’s positive trajectory to the buoyancy in domestic markets and the anticipation of fresh Foreign Institutional Investor (FII) inflows. However, a slight negative bias is expected due to the strong dollar, fueled by speculations that the US Federal Reserve will maintain its current monetary policy, reducing the likelihood of a rate cut in March 2024.

Meanwhile, the dollar index, measuring the greenback’s strength against a basket of currencies, edged 0.10% higher at 103.49. In parallel, global oil benchmark Brent crude futures declined by 1.03% to $82.02 per barrel, adding another layer of dynamics to the market landscape. As the market remains attuned to both domestic and international factors, the rupee’s trajectory is poised for continued scrutiny in the coming sessions.

Stocks Highlights

Dr. Reddy’s Laboratories Ltd. witnessed a commendable surge as its share price rose by 4.78%, reaching Rs 6,120.00 from its previous close of Rs 5,840.95. The company’s Return on Equity (ROE) for the year ending March 31, 2023, outperformed its 5-year average, registering at an impressive 19.35% compared to the average of 14.06%. Dr. Reddy’s Laboratories also showcased robust annual revenue growth, surpassing its 3-year Compound Annual Growth Rate (CAGR) with a growth rate of 16.78% against the CAGR of 12.22%. Notably, the company maintained a frugal approach, allocating less than 1% of its operating revenues to interest expenses and 18.84% towards employee costs.

On the other hand, Titan Company Ltd. experienced a dip in its share price, declining by -1.03% to Rs 3,697.45 from its previous close of Rs 3,735.75. Despite this, the company’s ROE for the fiscal year ending March 31, 2023, exceeded its 5-year average, standing at 27.42% in contrast to the average of 22.47%. Titan Company showcased impressive annual revenue growth, with a rate of 40.82%, outperforming its 3-year CAGR of 24.19%. However, a cautionary signal emerged with a 20-day moving average crossover, indicating a potential bearish trend, with an average price decline of -2.97% within 7 days historically. Investors will be monitoring these developments closely to make informed decisions in the evolving market scenario.

Advance Decline Ratio

Today, the advance-decline ratio was 1.96, and the market breadth was positive. The volatility index India Vix decreased by 0.34 percent to settle at 16.05 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1654
Decliners – 843
52Wk High –  237
52Wk Low – 11
High Band Hitters – 162
Low Band Hitters – 50
200d SMA – 19624
50d SMA – 21165
20d SMA – 21625

Top Gainers and Losers Stocks

The top gainers were Dr. Reddy (+4.78%), Eicher Motors (+3.69%), Sun Pharmaceutical (+3.15%), Tata Motors (+3.02%), and Divi’s Laboratories (+2.99%).

The top losers were Larsen & Toubro (-4.22%), Titan (-1.03%), BPCL (-0.39%), and Tata Consumer (-0.35%).

Top Gainers and Losers Sector

The top gainers sector were Pharma (+2.68%), Realty (+2.28%), Auto (+1.85%), Metal (+1.39%), and Consumer Durables (+1.28%).

SECTORS – NOTABLE ACTION
PHARMA +2.68%
REALTY +2.28%
AUTO +1.85%

Stocks Ban List

(SEBI) F&O ban list (ZEEL open at +172.00 and close at +173.10) 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, NATIONALUM, and HINDCOPPER stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 21500 to 21850 is the Nifty 50 trading range.

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