Is a Bear Market Looming? Nifty Faces a 10% Slump – What’s Behind the Bloodbath on Dalal Street?

At the close, the Nifty 50 was at 23,559.05 down by 1.36%

A Bloodbath on Dalal Street: Nifty in Freefall
The day began with a grim start, and it didn’t get better. The NSE Nifty 50 opened in the red and closed even deeper, down 1.36% at 23,559.05. It’s the fifth consecutive day of losses, with Nifty tumbling a staggering 10% from its record high. The question everyone’s asking: Where will it stop?

The Chilling Reality: A 10% Correction
November 13 wasn’t just another day on the markets. Nifty now sits at 23,559.05, marking a sharp drop from its peak of 20,200 on September 27. That’s a 10% decline—an eerie signal of a correction that’s hard to ignore.

Sector-Wide Carnage: Who’s Left Standing?
Today’s market witnessed a bloodbath, with nearly 2,400 stocks in the red. Major sectors, from metal to realty, were hammered. The banking and auto sectors couldn’t escape the storm either. The selling pressure was relentless, leaving only 16 stocks at a 52-week high, while a whopping 168 hit their 52-week lows.

What’s Driving the Panic?
The Nifty50‘s descent isn’t a simple stumble. It’s a result of rising inflation, weak corporate earnings, and foreign outflows. The inflation rate surged to a 14-month high, quashing hopes for an interest rate cut from the Reserve Bank of India (RBI). This has sent shockwaves through investor confidence.

Moreover, foreign institutional investors (FIIs) have pulled $14 billion out of Indian equities since late September, seeking refuge in more attractive markets like China, which is benefiting from stimulus measures.

The US Factor: Is It a Game-Changer?
The rising US bond yields and the strengthening dollar have further added to the pressure. As global markets await the US inflation data, investors are already jittery. Will the US Federal Reserve hike rates? A hawkish US stance could trigger more outflows from India, continuing the market’s downward spiral.

A Bear Market in the Making?
Are we on the brink of a bear market? With Nifty down 10% and Sensex losing 8,300 points in just two months, it’s hard to ignore the signs. But here’s the catch—broad-based selling and the test of long-term support levels might just offer a glimmer of hope. Can we expect a rebound, or is this just the beginning of a deeper plunge?

Key Factors Behind Today’s Plunge

1. Inflation at a 14-Month High: Retail inflation soared to 6.21%, dashing hopes for a rate cut.
2. FII Selling: The 32nd consecutive day of selling by FIIs has drained market confidence.
3. Rising US Yields and Strong Dollar: The US bond yields are now at 4.42%, making US assets more attractive and draining capital from emerging markets.
4. Nifty Falls Below 200-DMA: Nifty slipped below its critical 200-day moving average for the first time since April 2023.
5. Cautious Investors Ahead of Maharashtra Elections: Political uncertainty adds to the mounting pressure.
6. Global Market Uncertainty: Investors are holding their breath ahead of crucial US inflation data later today.

The Price of Gold in the Storm

With India’s wedding season approaching, the demand for gold is likely to remain high. However, with record-high prices and volatile global markets, will the wedding rush be enough to keep gold prices from crashing? Stay tuned to see how this unfolds.

Nifty‘s plunge and the broader market sell-off aren’t just temporary blips—they’re a sign of deeper, more complex issues. Investors, brace yourselves: The bear might already be here.

Bank Nifty: Down by 2.09%

A Red Day for India’s Benchmarks: Bank Nifty & Sensex Hit Hard
The Bank Nifty took a heavy hit, plunging 2.09% to close at 50,088.35, marking a sharp retreat in one of the most crucial sectors of the Indian market. Similarly, the BSE Sensex couldn’t escape the carnage, dropping 1.25% to settle at 77,690.95, its lowest point in recent days.

The sectorial front today paints a grim picture—no gainers in sight. Realty stands out as the biggest loser, with a staggering decline of 1.55%. But it doesn’t end there—two major players within the sector are feeling the heat. Brigade Enterprises Ltd. has taken a major hit, dropping by -4.08%, while Raymond Ltd. isn’t far behind, suffering a -3.71% loss.

Foreign Portfolio Investors (FPIs) recorded a buy value of ₹15,178.17 crore against a significantly higher sale value of ₹17,680.75 crore, leading to a net outflow of ₹2,502.58 crore.

Conversely, DIIs appear to be taking a contrarian stance, as they step in to cushion the market’s fall. Their buy value amounted to ₹14,095.16 crore, while the sale value was much lower at ₹7,949.92 crore, resulting in a strong net inflow of ₹6,145.24 crore.

Bank Nifty

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

There are no gainers in the Nifty Bank today.

On the other hand, the biggest losers in the sector included Bank of Baroda with a 3.28% decline, Federal Bank with a 3.15% decline, IDFC First Bank with a 2.97% decline, Punjab National Bank with a 2.82% decline, and AU Bank with a 2.67% decline. These results suggest that all of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 13th November, 2024

Rupee Shows a Modest Rise: Will It Break the 85 Mark? 🌍💸

The Indian rupee made a modest 1 paisa gain, closing at 84.38 against the US dollar on Wednesday, despite facing challenges from persistent foreign fund outflows and a muted trend in domestic equities.

Why the Narrow Movement? The rupee traded in a narrow range as investor sentiment was dampened by the strength of the US dollar in the global market. But don’t count it out just yet—suspected intervention by the Reserve Bank of India (RBI) kept the rupee supported at lower levels.

Forex Market Dynamics:

• The rupee opened at 84.40 against the dollar and peaked at 84.37 during the session, before settling at 84.38—a slight but significant improvement from the previous day’s close.
• On Tuesday, the rupee had hit a lifetime low of 84.39, which raised concerns about further depreciation.

What’s Next for the USD/INR Pair? Forex traders predict the rupee could potentially rise towards ₹85 in the near term, though RBI intervention may keep this move in check. The support levels are seen at 84.25 and 84, while resistance is pegged at 84.50 and 84.75.

Meanwhile, the Dollar Index—which tracks the dollar’s strength against a basket of six major currencies—was down 0.05%, hovering around 105.97.

In other global financial movements, Brent Crude saw a 0.64% rise, reaching $72.35 per barrel, adding to the uncertainty in the market.

Can the Rupee Hold its Ground, or Will It Hit the ₹85 Wall? Keep an eye on these developments as the forex market continues to shift.

Stocks Highlights

Tata Motors Ltd. saw its share price remain stable, closing at Rs 786.25, slightly edging up to Rs 786.85, marking a 0.25% increase. But what’s more intriguing is its Return on Equity (ROE)—a staggering 36.97% for the year ending March 31, 2024, a massive leap from its 5-year average of -1.07%.

But wait… there’s more. Despite this impressive performance, the company experienced a quarterly revenue decline of 9.74%, the lowest in 3 years. However, when it comes to long-term growth, Tata Motors delivered an impressive 26.61% annual revenue growth, surpassing its 3-year CAGR of 20.47%.

What’s going on with Tata’s expenses? The company spent 2.28% of its operating revenues on interest expenses and 9.7% on employee costs.

On the flip side, Eicher Motors Ltd. also remained largely unchanged, closing at Rs 4,588.70 and dipping slightly to Rs 4,598.80, reflecting a -2.94% drop. But there’s no denying that Eicher’s ROE performance is stellar—coming in at 22.17% for the year ending March 31, 2024, outperforming its 5-year average of 17.54%.

However, it’s not all sunshine. The company has kept its operating expenses in check, with interest expenses below 1% of operating revenues and 7.47% spent on employee costs. The question on every investor’s mind: Will Eicher’s conservative approach continue to yield steady growth, or are there unseen risks looming on the horizon?

Advance Decline Ratio

Today, the advance-decline ratio was 0.13 and the market breadth was negative. The volatility index India Vix increased by 5.03 to settle at 15.33 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 321
Decliners – 2471
52Wk High – 16
52Wk Low – 168
High Band Hitters – 39
Low Band Hitters – 272
200d SMA – 23540
50d SMA – 24929
20d SMA – 24308

Top Gainers and Losers Stocks

The top gainers were Britannia (+0.40%), Grasim (+0.35%), Tata Motors (+0.25%), Asian Paint (+0.13%), and NTPC (+0.04%).

The top losers were Hero MotoCorp (-4.21%), M&M (-3.47%), Hindalco (-3.40%), Tata Steel (-3.11%), and Eicher Motors (-2.94%).

Top Gainers and Losers Sectors

The top losers were Realty (-3.17%), Metal (-2.66%), Auto (-2.17%), Media (-2.16%), and Oil & Gas (-1.89%).

SECTORS – NOTABLE ACTION
REALTY -3.17%
METAL -2.66%
AUTO -2.17%

Stocks Ban List

(SEBI) F&O ban list (AARTIIND close at -428.65), (GRANULES close at -532.40), (HINDCOPPER close at -261.70), (ABFRL close at -290.10), and (MANAPPURAM close at -158.10) 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, BANDHANBNK, and CHAMBLFERT stocks has the possibilities of entrance in the ban list.

MANAPPURAM stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 23200 to 23900 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Is the Market Heading for a Deeper Dive? Nifty’s Sudden Plunge Sparks Concerns
Nifty Faces Volatility as Bears and Bulls Battle for Control—Will It Find a Bottom or Fall Further?

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