Investors Seek Value Buying as Nifty Indices Rise

At the close, the Nifty 50 was at 22,055.20 up by 0.44%

The NSE Nifty 50 index displayed a robust start in the green, marking a 0.44% increase and maintaining its positive momentum throughout the trading day, closing above the significant 22000 mark. This surge follows a previous session’s dip, with investors capitalizing on value buying opportunities amidst favorable market conditions.

The rally in India’s benchmark Nifty was further fueled by gains in global equity markets, particularly in response to expectations of Federal Reserve rate cuts prompted by a surge in US jobless claims, reaching a nine-month high. Notably, the Nifty 50 gained 97.70 points, or 0.44%, closing at 22,055.20.

In a notable shift, China was downgraded while India was upgraded in emerging market allocation, potentially bolstering investor sentiment towards the Indian market. Speculation mounted over anticipated rate cuts by the US Federal Reserve, supported by the easing of the 10-year benchmark US Treasury Yield to 4.45%.

However, amidst the positive market sentiment, concerns loom over a sell-on rally trend emerging due to domestic premium valuation and election apprehensions. Financials experienced weakness, attributed to signs of contraction in Net Interest Margins (NIMs) and regulatory actions by the Reserve Bank of India (RBI). Foreign Institutional Investors (FIIs) continue to divest, driven by delays in rate cuts, inflationary worries, moderating corporate earnings, and elevated valuations.

Moving forward, market attention remains focused on US consumer and inflation data, along with the potential for US tariff actions on Chinese electric vehicle (EV) companies, shaping the trajectory of global economic dynamics.

Bank Nifty: Down by 0.14%

The Bank Nifty opened in green and was down by 0.14 percent, closing in red at 47,421.10. Similarly, the BSE Sensex was up by 0.36 percent and closed in green at a high of 72,664.47.

In the sectorial front, the metal sector has surged significantly, marking a gain of 1.54%. Notably, Hindustan Zinc Ltd. stands out with an impressive increase of 15.97%, closely followed by Vedanta Ltd., boasting a gain of 3.89%.

Conversely, the IT sector has witnessed a decline, registering a loss of 0.82%. Tata Consultancy Services Ltd. takes a notable hit with a decrease of -1.65%, alongside LTIMindtree Ltd., experiencing a loss of -1.27%. This downturn in the IT sector reflects challenges and uncertainties prevalent in the market.

Foreign Institutional Investors (FIIs)/Foreign Portfolio Investors (FPIs) engaged in Indian markets witnessed a scenario where the buy value amounted to Rs. 11,603.33 crore, while the sale value stood at Rs. 13,720.83 crore. Consequently, the net value for FIIs/FPIs resulted in a deficit of Rs. -2,117.50 crore.

Conversely, Domestic Institutional Investors (DIIs) depicted a contrasting trend. DIIs recorded a buy value of Rs. 10,677.79 crore against a sale value of Rs. 7,967.98 crore, yielding a net value surplus of Rs. 2,709.81 crore.

Bank Nifty

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

The gainers included Bandhan Bank with a 2.57% increase, Federal Bank with a 1.88% increase, Punjab National Bank with a 1.51% increase, IDFC First Bank with a 1.19% increase, and AU Bank with a 1.07% increase.

On the other hand, the biggest losers in the sector included Bank of Baroda with a 2.87% decline, Kotak Bank with a 1.22% decline, State Bank of India with a 0.36% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Trades Stagnant Amidst Market Dynamics

The Indian rupee maintained a narrow trading range against the US dollar amidst a complex interplay of domestic and global factors. Positive performance in the domestic equities provided initial support, but this was offset by soaring crude oil prices, impacting investor sentiment.

At the outset of trading on Friday, the rupee opened at 83.48 against the US dollar, experiencing a marginal gain of 2 paise from its previous close, reaching 83.46 in early trade. However, the currency faced headwinds from the strength of the American currency in the international market, compounded by significant foreign fund outflows.

Thursday witnessed the rupee closing at 83.48 against the US dollar, with foreign portfolio investors’ (FPIs) outflows exerting pressure on demand for the US dollar. The Reserve Bank of India’s (RBI) intervention at the 83.50 mark restrained further appreciation of the USD/INR pair, a trend expected to continue on Friday.

The dollar index, which measures the greenback’s strength against major currencies, saw a slight increase to 105.30, while Brent crude futures rose to $84.34 per barrel, contributing to market volatility.

Amidst these fluctuations, investors should remain vigilant, closely monitoring market movements and adopting a cautious approach to currency trading, considering the influence of both domestic and global economic indicators on the rupee’s performance.

Stocks Highlights

Bharat Petroleum Corporation Ltd. Shows Positive Momentum with Strong Fundamentals

Bharat Petroleum Corporation Ltd. (BPCL) witnessed a notable increase in its share price, rising by 4.50% from its previous close of Rs 592.15 to reach Rs 618.80. This surge indicates a positive market sentiment towards BPCL, supported by robust financial indicators. Notably, the company allocated less than 1% of its operating revenues towards interest expenses and a mere 0.59% towards employee costs in the fiscal year ending 31st March 2023.

Moreover, technical analysis suggests a bullish trend, with a 20-day moving crossover observed on May 8th, 2024. Historical data reveals an average price gain of 2.77% within 7 days following this signal over the past 5 years. Despite outperforming Nifty 100 with a 3-year return of 30.52%, BPCL’s stock returns fall short compared to the index’s return of 52.61%.

Tata Consultancy Services Ltd. Faces Market Correction Despite Strong Dividend and Debt Management

In contrast, Tata Consultancy Services Ltd. (TCS) experienced a decline in its share price, dropping by -1.65% from its previous close of Rs 3,960.20 to Rs 3,895.00. Despite announcing a dividend of Rs 28.0 per share on April 12th, 2024, with a record date of May 16th, 2024, TCS struggled to maintain investor confidence.

TCS maintains a commendable financial position with zero debt over the past 5 years. However, its expenditure on employee costs surged to 58.17% of operating revenues in the fiscal year ending March 31st, 2024. While TCS delivered a respectable 3-year return of 25.9%, it falls behind Nifty 100’s return of 52.61%. Amidst market volatility, investors are advised to assess both technical and fundamental aspects before making investment decisions.

Advance Decline Ratio

Today, the advance-decline ratio was 1.65, and the market breadth was positive. The volatility index India Vix increased by 1.49 percent to settle at 18.47 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1591
Decliners – 965
52Wk High – 52
52Wk Low – 35
High Band Hitters – 88
Low Band Hitters – 78
200d SMA – 20848
50d SMA – 22297
20d SMA – 22368

Top Gainers and Losers Stocks

The top gainers were BPCL (+4.50%), Power Grid (+2.45%), NTPC (+2.41%), Hero MotoCorp (+2.35%), and Eicher Motors (+2.23%).

The top losers were TCS (-1.65%), Cipla (-1.38%), LTIM (-1.27%), Kotak Bank (-1.22%), and Infosys (-0.95%).

Top Gainers and Losers Sector

The top gainers sector were Metal (+1.54%), Oil & Gas (+1.22%), FMCG (+1.19%), Consumer Durable (+1.06%), and Auto (+0.94%).

The top losers sector were IT (-0.82%), and Realty (-0.44%).

SECTORS – NOTABLE ACTION
METAL +1.54%
OIL & GAS +1.22%
FMCG +1.19%
IT -0.82%
REALTY -0.44%

Stocks Ban List

(SEBI) F&O ban list (ZEEL open at -133.00 and close at -131.25), (BALRAMCHIN open at -373.00 and close at +374.35), (CANBK open at -550.00 and close at +548.15), (SAIL open at -154.95 and close at +156.90), (IDEA open at -12.70 and close at +12.70), (GMRINFRA open at -79.25 and close at +80.10), (PNB open at -123.90 and close at +123.90), (ABFRL open at -247.45 and close at +256.85), and (PEL open at -820.00 and close at +847.40) 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.

INDIACEM, COFORGE, LICHSGFIN, HINDCOPPER, IDFCFIRSTB, BSOFT, BANDHANBNK, MANAPPURAM, and GNFC stocks has the possibilities of entrance in the ban list.

ABFRL, and PEL stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21900 to 22200 is the Nifty 50 trading range.

Read previous -Daily Insights- here
NSE Nifty 50 Encounters Significant Decline Amidst Market Turbulence
Selling Pressure Weighs on India’s Nifty 50 Amid Disappointing Q4 Earnings
Indian Equity Markets Start Strong, But Financial Sector Weighs Them Down

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