Is Nifty On The Edge of a Big Breakthrough or a Major Setback?

At the close, the Nifty 50 was at 25,418.55 up by 0.14%

September 17, 2024. Today, NSE Nifty 50 started on a green note, inching up by 0.14% to close above the crucial 25,400 mark. But here’s where it gets intriguing: Nifty formed a Doji candle on its daily chart, near its all-time high. Is this a sign of hesitation or just a pause before a major move?

As the market eyes the upcoming US Fed meeting, where a significant rate cut is anticipated, Nifty is in consolidation mode. For the last three days, the index has been moving in a narrow range, with the formation of small sideways Doji candles. Is this the calm before the Fed’s storm?

Benchmark indices Sensex and Nifty both soared to record highs on September 17, buoyed by gains in telecom, auto, and construction stocks. However, the real suspense is about the Fed’s monetary policy decision expected later this week. Investors are holding their breath, anticipating a 25-bps interest rate cut.

Today’s trading

Today’s trading saw Nifty50 close at 25,418.55, a slight gain of 34.80 points or 0.14%. This uptick came amidst a cautious atmosphere as investors await key policy decisions from global central banks. With cash market volumes flat and profit-booking in midcap and smallcap stocks, Nifty’s movement remains within a narrow range, reflecting a market on edge.

In global markets, European and Asian stocks advanced, driven by the anticipation of the Federal Reserve’s decision. European stocks even hit a two-week high, underscoring the global anticipation of central bank meetings.

Oil prices surged due to production disruptions from Hurricane Francine, adding another layer of complexity to market dynamics. This, coupled with expectations of an interest rate cut, is keeping investors alert.

As Nifty continues to hover near its all-time high, the trendline resistance is evident. A breakout from this range-bound pattern could provide clarity on the index’s direction. Immediate support stands at 25,350. Should it fall below this, we might witness the unwinding of put option positions and a potential correction towards 25,000.

In India, while the market showed subtle positive momentum due to the anticipation of the Fed’s rate cut cycle, there’s a keen focus on the Fed’s comments regarding the economy’s health and future rate cuts. Institutional flows continue to support the market, with notable buying in large-cap stocks across IT, FMCG, and private banking sectors.

As we approach the Federal Open Market Committee meeting tonight in Washington DC, all eyes are on Fed Chair Jerome Powell. Will he deliver the expected rate cuts or surprise us with something different? The buzz is strong around the rate cut, and experts are confident that Powell will announce a reduction.

Stay tuned, as today’s market moves are just the prelude to what could be a dramatic shift.

Bank Nifty: Up by 0.07%

Bank Nifty started the day in green, up by 0.07%, and closed at 52,188.65 – another positive mark on the board. Similarly, BSE Sensex gained 0.11%, hitting a new high of 83,079.66 as it also closed in green.

In the latest sectorial performance, the Realty sector has shown impressive gains, rising by 0.61%. Leading this upward trend, Prestige Estates Projects Ltd. has soared by 3.99%, reflecting robust investor confidence and a flourishing real estate market. Meanwhile, Sobha Ltd. has also seen a significant boost, with its share price climbing by 3.91%.

On the other hand, the Media sector has faced a downturn, emerging as the top loser with a decline of 1.19%. Within this sector, Sun TV Network Ltd. has experienced a notable drop of -2.22%, indicating potential challenges or shifts in viewer preferences that might be impacting its performance. Similarly, TV18 Broadcast Ltd. has not fared well, with a decrease of -1.99% in its share value.

Foreign Institutional Investors (FII) were net buyers today with a net buy value of Rs. 482.69 crore. Their total buy value was Rs. 13,095.19 crore, while their sales amounted to Rs. 12,612.50 crore.

Domestic Institutional Investors (DII) also showed a positive net activity, buying shares worth Rs. 10,959.98 crore and selling Rs. 10,085.83 crore, resulting in a net buy value of Rs. 874.15 crore.

Bank Nifty

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

The gainers included Bandhan Bank with a 1.03% increase, Kotak Bank with a 0.75% increase, and ICICI Bank with a 0.27% increase.

On the other hand, the biggest losers in the sector included Punjab National Bank with a 2.37% decline, IDFC First Bank with a 0.57% decline, State Bank of India with a 0.36% decline, Federal Bank with a 0.34% decline, Axis Bank with a 0.21% decline. These results suggest that some of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 17th September, 2024

Rupee Rises on Fed Rate Cut Hopes – What’s Next?

The Indian rupee surged to its highest level in over a month on Tuesday, closing at 83.75 against the U.S. dollar, marking a 0.1% gain from its previous close of 83.8875. During the session, the rupee even touched a peak of 83.71, its highest since August 1.

This ascent is fueled by rising expectations that the U.S. Federal Reserve will initiate policy easing with a 50 basis points rate cut this week. Broad-based interbank dollar sales and reduction in long-positions on the dollar-rupee pair, ahead of the Fed’s decision, further supported the rupee’s climb.

However, the Indian foreign exchange and debt markets will be closed on Wednesday for a local holiday, potentially impacting trading activity. Meanwhile, the dollar index dipped slightly to 100.6, staying near its year-to-date low, as market expectations of a 50 basis point Fed rate cut rose to 67% from 34% a week earlier.

The outlook for the rupee remains positive, with predictions suggesting it could move towards 83.60. In addition, dollar-rupee forward premiums edged up, with the 1-year implied yield reaching 2.31%, its highest since April 2023.

Investors are now closely watching U.S. retail sales data, which could significantly influence market expectations regarding the pace and extent of Fed rate cuts. Will the rupee continue its upward trajectory or face new challenges? Stay tuned for the latest updates!

Stocks Highlights

Hero MotoCorp Ltd. is riding high with its share price climbing 3.25% to Rs 5,967.00. A little fun fact: in the last 19 years, only 0.98% of trading sessions saw a dip of more than 5% in a single day. When it comes to growth, Hero MotoCorp’s annual revenue rise of 11.28% has outshined its 3-year CAGR of 6.96%.

Over the last three years, the stock delivered a strong 97.9% return, easily surpassing the Nifty 100’s 47.58%. Additionally, the company has kept interest expenses below 1% of operating revenue and employee costs at 6.54% as of March 2024.

Tata Motors Ltd. saw a slight slip, down 1.36% to Rs 975.00. Intraday dips above 5% are rare, occurring in just 2.37% of trading sessions over the past 19 years. Despite the drop, Tata Motors delivered a stellar ROE of 36.97% for FY24, far outperforming its 5-year average of -1.07%.

However, on the revenue front, the company faced a 9.74% QoQ decline, its lowest in three years. The stock still boasts a whopping 3-year return of 217.15%, leaving Nifty 100’s 47.58% far behind.

Advance Decline Ratio

Today, the advance-decline ratio was 0.64, and the market breadth was negative. The volatility index India Vix increased by 1.04 to settle at 12.59 and the FIIs were net buyer today.

DAILY MARKET ACTION
Advancers – 1072
Decliners – 1674
52Wk High – 148
52Wk Low – 28
High Band Hitters – 105
Low Band Hitters – 103
200d SMA – 22824
50d SMA – 24736
20d SMA – 25104

Top Gainers and Losers Stocks

The top gainers were Hero MotoCorp (+3.25%), Bajaj Auto (+2.02%), Bharti Airtel (+1.68%), NTPC (+1.19%), and M&M (+0.89%).

The top losers were Tata Motors (-1.36%), Eicher Motors (-1.00%), Tata Steel (-0.98%), Coal India (-0.96%), and JSW Steel (-0.88%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+0.61%), Consumer Durables (+0.49%), Auto (+0.26%), FMCG (+0.14%), and IT (+0.14%).

The top losers sector were Media (-1.19%), Metal (-0.42%), and Pharma (-0.28%).

SECTORS – NOTABLE ACTION
REALTY +0.61%
CONSUMER DURABLES +0.49%
AUTO +0.26%
MEDIA -1.19%
METAL -0.42%
PHARMA -0.28%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at -544.20), (LICHSGFIN close at -674.90), (BSOFT close at +648.45), (GNFC close at -652.60), (AARTIIND close at -563.60), (BALRAMCHIN close at +570.10), (RBLBANK close at +216.28), (HINDCOPPER close at -318.40), (CHAMBLFERT close at +519.30), and (BANDHANBNK close at +207.68) 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.

IDEA, SAIL, PNB, BIOCON, ABFRL, NATIONALUM, DIXON, MANAPPURAM, IDFCFIRSTB, CANBK, PEL, GMRINFRA, NMDC, BANKBARODA, and TATACHEM stocks has the possibilities of entrance in the ban list.

RBLBANK, HINDCOPPER, CHAMBLFERT, and BANDHANBNK has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 25200 to 25600 is the Nifty 50 trading range.

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Nifty’s Silent Stance! Will the Rally Continue, or Is a Storm Brewing for Nifty?
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This article is only for educational purposes and is not an investment advice.