Is the Market Heading for a Deeper Dive? Nifty’s Sudden Plunge Sparks Concerns

At the close, the Nifty 50 was at 23,883.45 down by 1.07%

Nifty’s Shocking Drop: Is This Just the Beginning?

November 12 was another wild ride for the NSE Nifty 50. After starting off in the green, things quickly took a turn for the worse. By the close, Nifty was down 1.07%, falling to 23,883.45—below the critical 24,000 mark. But what triggered this dramatic fall? Was it a temporary glitch, or are the markets facing something deeper?

The story of the day was the wave of selling pressure that swept through nearly every sector. The markets had a glimpse of hope, with Nifty opening higher above 24,200. However, the optimism evaporated fast, as profit booking took hold and sent the index tumbling below 23,900. This marked the fourth consecutive session of declines, leaving many investors questioning: Is the correction phase far from over?

The Global Influence: Foreign Outflows, Weak Earnings, and a Strong Dollar

The selloff wasn’t just a local issue—it’s part of a bigger global story. Foreign Institutional Investors (FIIs) have been selling relentlessly, with a staggering Rs 23,547 crore in November alone. The strengthening dollar—driven by aggressive US policies—has added fuel to the fire, dampening investor sentiment. Meanwhile, inflation fears and rising food prices have created uncertainty in India’s economy, making the Reserve Bank of India’s next move even more crucial.

Breaking the Psychological Barrier: Nifty Drops Below 24,000

The Nifty’s psychological barrier of 24,000 was breached as banking and auto stocks faced the brunt of the damage. But it wasn’t just the big sectors—the entire market felt the weight, with broader indices dropping nearly 1.5% each. The question now is: Will Nifty hit its previous low of 23,800, or will the market find a footing?

The Ripple Effect: Is This a One-Day Wonder or a Deeper Issue?

With all sectors under pressure, there’s more at play than meets the eye. Investors lost Rs 5.76 lakh crore in market cap, as the Sensex sank 821 points. But why the panic? Most analysts are pointing to foreign outflows, the weak global market trends, and concerns over inflation data—scheduled for release later today. Will this inflation report act as the tipping point?

Key Factors Impacting the Market Today

1. FIIs vs. DIIs: Foreign investors continue their selling spree, but domestic investors are still buying, providing some support. How long can this tug-of-war last?
2. Oil Prices & China Stimulus: While oil prices hover around $72, China’s weak stimulus and global oversupply concerns are keeping investors on edge.
3. Rupee at a Record Low: The Indian Rupee fell to 84.39 against the US Dollar, its weakest level in history. With foreign outflows and a rising greenback, this could signal more pain ahead for domestic markets.
4. Inflation Data: Investors are anxiously awaiting October’s inflation numbers, with expectations of a 5.8% rise, the highest in over a year. The outcome of this report could influence the RBI’s next monetary policy move.

The Takeaway: What Does This Mean for Your Investments?

The market is at a critical juncture. With Nifty testing its swing low, investors must ask themselves: Is the worst behind us, or are we on the brink of a larger correction?

Market signals suggest a possible test of long-term support levels, particularly the 200 DEMA at 23,540. Now, it’s a waiting game—selective stock picking and careful positioning will be key.

Brace for Impact—the next few days could reveal whether the markets are truly heading for a deeper correction or are about to make a recovery. Keep your eyes on those global cues, the upcoming inflation data, and how foreign inflows will shift.

The market’s fate? Still uncertain…

Bank Nifty: Down by 1.39%

Bank Nifty and BSE Sensex struggled on November 12, reflecting broader market weakness amid foreign fund outflows and weak global cues. The Bank Nifty opened in the green but eventually succumbed to selling pressure, closing down by 1.39% at 51,157.80. Similarly, the Sensex also saw a decline of 1.03%, settling at 78,675.18, further deepening the negative sentiment in Indian equities.

In the sectorial front, the Realty sector sees a surprising boost, rising by 0.18% — but wait, there’s more to the story. Within this sector, Macrotech Developers Ltd. surged ahead with a notable 4% gain, while Brigade Enterprises Ltd. climbed up by 1.58%.

Yet, not all sectors are enjoying the same momentum. The Auto sector seems to be in reverse gear, falling by a significant 1.94%. Leading the way down, Samvardhana Motherson International Ltd. tumbled with a hefty 6.25% loss, and Bosch Ltd. followed close behind, slipping by 4.58%.

FIIs continued their selling spree, offloading stocks worth ₹15,567.04 crore, while their buying activity remained relatively lower at ₹12,542.73 crore, resulting in a net outflow of ₹3,024.31 crore.

DIIs maintained a more optimistic stance, with buying activity amounting to ₹10,330.28 crore, while their selling value was ₹8,475.82 crore, leading to a net inflow of ₹1,854.46 crore.

Bank Nifty

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

The gainers included AU Bank with a 0.51% increase.

On the other hand, the biggest losers in the sector included HDFC Bank with a 2.68% decline, State Bank of India with a 2.55% decline, Canara Bank with a 2.52% decline, Bank of Baroda with a 2.17% decline, and Punjab National Bank with a 1.56% decline. These results suggest that most of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 12th November, 2024

Rupee Slips to All-Time Low: Is There a Rebound in Sight? 🌍💸

The Indian rupee has reached a fresh lifetime low, slipping by 1 paisa to 84.39 against the US dollar – a new low that comes amid a backdrop of continuous foreign fund outflows and the unyielding strength of the greenback. Despite its current support from falling crude and gold prices (potentially easing India’s import bill), the rupee has now faced five consecutive sessions of decline, losing 32 paise in the process.

But what does this mean for the near future? The Reserve Bank of India (RBI) is expected to hold off any steep declines, leveraging India’s robust foreign exchange reserves to maintain stability. This is expected to keep the rupee in a range between 83.80 and 84.50 in the medium term.

With the dollar index maintaining its strength, currently trading at 105.60, it seems that the rupee may face persistent pressure with limited room for recovery. The global oil benchmark, Brent crude, also saw a slight uptick of 0.60% to $72.26 per barrel, which could impact this already volatile scenario.

Will the RBI’s measures be enough to cushion the rupee, or will the dollar’s dominance keep weighing it down? Stay tuned as we track this currency drama in the coming days!

Stocks Highlights

Trent Ltd. is showing some positive momentum, with its stock price rising by 0.42%, moving from the previous close of Rs 6,480.70 to Rs 6,508.00. But there’s more—Trent Ltd. has also delivered a stellar 36.55% ROE (Return on Equity) for the year ending March 31, 2024, far surpassing its 5-year average of 14.67%. Impressive, right? In the last three years, the stock has outperformed the Nifty 100 by a massive margin, delivering a 464.91% return, compared to the 37.71% return from the Nifty 100 index.

But here’s the catch: Trent Ltd. spent 2.58% of its operating revenues on interest expenses and 8.38% on employee costs.

On the other side, Britannia Industries Ltd. has had a rough day. The share price dropped a steep -7.30%, moving from Rs 5,434.65 to Rs 5,038.00. While its three-year return of 49.16% still beats the Nifty 100’s 37.71%, the recent decline raises questions. What’s going wrong with Britannia’s stock?

Looking at expenses, Britannia has kept its interest expense relatively low, at under 1% of operating revenues, and 4.23% of revenues went towards employee costs. Will this lean approach be enough to turn things around in the face of declining stock performance?

Advance Decline Ratio

Today, the advance-decline ratio was 0.30 and the market breadth was negative. The volatility index India Vix increased by 2.24 to settle at 14.59 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 648
Decliners – 2132
52Wk High – 54
52Wk Low – 61
High Band Hitters – 78
Low Band Hitters – 123
200d SMA – 23528
50d SMA – 24963
20d SMA – 24378

Top Gainers and Losers Stocks

The top gainers were Trent (+0.42%), Sun Pharmaceutical (+0.13%), HCL Technologies (+0.06%), and Infosys (+0.05%).

The top losers were Britannia (-7.30%), BEL (-3.49%), NTPC (-3.12%), Asian Paints (-2.86%), and HDFC Bank (-2.68%).

Top Gainers and Losers Sectors

The top gainer sectors were Realty (+0.18%), and IT (+0.05%).

The top losers were Auto (-1.94%), Financial Services (-1.65%), FMCG (-1.63%), Metal (-1.49%), and Consumer Durables (-1.36%).

SECTORS – NOTABLE ACTION
REALTY +0.18%
IT +0.05%
AUTO -1.94%
FINANCIAL SERVICES -1.65%
FMCG -1.63%

Stocks Ban List

(SEBI) F&O ban list (AARTIIND close at +156.11), (HINDCOPPER close at -572.30), (GRANULES close at -572.30), (MANAPPURAM close at -572.30), and (ABFRL close at +298.20).

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, CHAMBLFERT, and BANDHANBNK stock has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 23500 to 24200 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Nifty Faces Volatility as Bears and Bulls Battle for Control—Will It Find a Bottom or Fall Further?
A Sharp Drop in Nifty 50: What’s Really Happening Behind the Scenes? Will the Trend Continue or Reverse?

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