Is the Nifty 50 Facing a Silent Crisis? The Indian Stock Market ended on a flat note, but what does this mean for the future?

NiftyTrader • December 10, 2024

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Index	Price	Change	% Chg
Nifty 50	24,610.05	-8.95	-0.04%
Nifty MidCap 50	16,483.65	+74.15	+0.45%
Nifty SmallCap 50	9,452.80	+15.35	+0.16%
Nifty Bank	53,577.70	+169.95	+0.32%
Nifty Financial	24,802.95	+80.35	+0.33%
BSE SENSEX	81,510.05	+1.59	+0.00%

At the close, the Nifty 50 was at 24,610.05 down by 0.04%

The Indian Stock Market ended on a flat note, but what does this mean for the future?

Nifty 50 opened the day on a subdued note, and by the end of the session, it closed in the red. The benchmark index ended the day at 24,610.05, down by 8.95 points, or 0.04%, marking its third consecutive day of decline. But here’s the catch: the market’s movement was anything but predictable. With volatility taking center stage, the index swung between highs and lows, testing the patience of traders.

In the early hours, Nifty 50 appeared to be on an upward trajectory, reaching a high of 24,677.80, but soon after, profit-booking took control, dragging the index to a low of 24,510.65. Key sectors like IT and Realty saw buying interest in the final hour, providing a last-minute lifeline. However, despite the late rally, the index still closed in the red, showing that market sentiment remains fragile and uncertain.

Is a Major Correction Coming for Nifty 50?

Here’s the burning question: Could a break below 24,470 trigger a significant market correction?

Key Takeaway: The market wasn’t exactly booming, but resilience was evident. A 100-point recovery in the last hour hinted at underlying buying interest at lower levels. But with market volatility at play, could it all change tomorrow? Experts are advising a cautious “buy on dips” strategy, but should you be worried?

The market has been stuck in a narrow range for days, with support at 24,500 and resistance at 24,700. While there has been some movement between these levels, the sentiment remains neutral to negative. A break below 24,470 could signal a bigger downturn, with experts predicting a potential fall of 200 to 250 points. The market could remain range-bound unless there’s a decisive move beyond these levels, and traders are eagerly awaiting any indication of a breakout.

On a positive note, mid-cap and small-cap stocks are showing resilience, offering a glimmer of hope for those looking beyond the major indices. While select sectors like IT and Realty are still holding strong, rotational buying across the broader market could sustain a positive sentiment if the Nifty manages to hold its ground above key support levels.

The Rupee’s Struggles and What It Means for the Stock Market

Adding another layer of complexity, the Indian Rupee fell to a record low against the US Dollar, fueling mixed sentiment in the markets. The fall of the rupee is a major concern, and market speculation about rate cuts is gaining momentum following the appointment of Sanjay Malhotra as the next RBI Governor. Could this shift in leadership bring relief or worsen the economic outlook?

Interestingly, the IT sector has found a silver lining in this chaos. With the rupee depreciating, export-oriented sectors like IT are benefiting from higher dollar-denominated revenues, giving a boost to stocks like Infosys, TCS, and Wipro. But will this sector’s strength be enough to support the broader market, especially if the rupee continues its downward spiral?

RBI’s Dilemma: Can Sanjay Malhotra Save the Day?

As Sanjay Malhotra steps into the role of RBI governor, he faces one of the toughest jobs in the country. The “impossible trinity” dilemma looms large: balancing growth, inflation, and a weakening currency. With calls for lower interest rates, the new governor must navigate a delicate path to stabilize the economy.

The rupee’s devaluation and increasing pressure on foreign portfolio investors (FPIs) to pull out of Indian markets will add to Malhotra’s challenges. If he cuts interest rates to stimulate growth, the rupee could weaken further, making the job even more complicated. Inflation control and managing exchange rate volatility will be crucial in the coming months. All eyes will be on the RBI’s policy decisions in the coming weeks as Malhotra takes charge. Will he make bold moves to revive the economy, or will he be stuck in a tug-of-war between growth and inflation control?

The Dollar Strikes Back: A Global Market Shift Looms

Adding to the global market tension, the U.S. Dollar has reasserted its strength, fueled by U.S. Treasury yields creeping back above 4.2%. The dollar’s resurgence is tied to expectations of interest rate cuts in overseas markets, including China, which seems to have hesitated on fully embracing its new policy orientation. This shift in global dynamics has caused the dollar to strengthen, particularly against currencies facing additional rounds of central bank easing, like the Canadian dollar.

The U.S. Dollar reached its highest point against the Canadian Dollar since April 2020, as traders anticipate further interest rate cuts by the Bank of Canada. With bond volatility gauges dipping to their lowest in over two years, the greenback has gained momentum, making it a key player in global market dynamics.

This surge in the dollar comes at a crucial time, with major inflation reports expected, including the U.S. Consumer Price Index (CPI) this week. How will this impact emerging markets like India, which is already facing a weak rupee? As the dollar strengthens, global financial markets are preparing for a new phase of currency fluctuations and market realignments.

The Big Question: Will the Market Continue to Drift or Will There Be a Breakout?

While the stock market is showing signs of consolidation, there’s no denying that the Nifty 50 is on edge. With major inflation data expected soon, both domestic and U.S. inflation figures could tip the scales. Key domestic events, including IIP (Index of Industrial Production) data and inflation numbers, combined with global uncertainties, will influence investor sentiment. Can the market finally break out of its rangebound pattern, or will it keep swinging in this unpredictable rhythm?

Key Takeaways:

Nifty 50 remains range-bound, but technical analysis suggests potential resistance at 24,700 and support at 24,500.
Profit-booking and sectoral shifts are defining market movements, with IT and Realty stocks showing strength despite market volatility.
Rupee weakness continues to drag sentiment, though it could be a boon for export-oriented sectors like IT.
Sanjay Malhotra’s first steps as RBI governor will be pivotal in managing inflation, interest rates, and currency volatility.
Mid-cap and small-cap stocks show resilience, signaling that there could still be opportunities in the broader market despite the uncertainty in major indices.
The U.S. Dollar’s resurgence and global rate cuts could further complicate market movements, with emerging market currencies and stocks under pressure from a stronger greenback.

Bank Nifty: Up by 0.32%

Bank Nifty opened strong, showing a positive start with a 0.32% gain, closing at a solid 53,577.70. While other indices struggled with fluctuations, Bank Nifty held its ground. But with such tight margins, can this momentum continue? Or will it falter like other benchmarks? Meanwhile, BSE Sensex mirrored the indecision of the market, showing no change on the day. It closed with a flat finish at 81,510.05, marking 0.00% change.

In the sectorial front, the Realty sector emerged as the top performer, gaining an impressive 1.43%. Among the standout stocks, Raymond Ltd. surged by 11.22%, a remarkable gain for the day. The Phoenix Mills Ltd. also made a strong showing, rising by 3.72%.

In stark contrast, the Media sector became the top loser, dropping by 0.68%. Stocks like Tips Music Ltd. saw a sharp decline of -3.52%, while Nazara Technologies Ltd. wasn’t far behind, falling -2.62%.

Foreign Institutional Investors continued to show confidence in the Indian market, with a net buy value of ₹1,285.96 crore. The total buy value stood at ₹19,936.98 crore, while the sale value was ₹18,651.02 crore.

Domestic Institutional Investors showed a more cautious approach, with a net buy value of ₹605.79 crore. Their total buy value amounted to ₹11,264.73 crore, while the sale value was ₹10,658.94 crore.

Bank Nifty

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

The gainers included Punjab National Bank with a 2.00% increase, AU Bank with a 1.83% increase, State Bank of India with a 1.19% increase, IDFC First Bank with a 0.89% increase, and Kotak Bank with a 0.72% increase.

On the other hand, the biggest losers in the sector included Axis Bank with a 0.71% decline, and HDFC Bank with a 0.13% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 10th December, 2024

22 K Gold / g	₹ 7,205	+ ₹ 75
24 K Gold / g	₹ 7,860	+ ₹ 82
18 K Gold / g	₹ 5,895	+ ₹ 61

Silver / g	₹ 96.50	+ ₹ 4.50
Silver / kg	₹ 96,500	+ ₹ 4,500

Rupee’s Roller Coaster Ride: Will New RBI Governor Sanjay Malhotra Bring Stability?

Rupee Closes Near Record Low: What’s Behind the Instability?
The Indian rupee finished Tuesday’s trading session at 84.85 against the US dollar, a fraction above its all-time low. It opened at 84.80, touched 84.86 during intra-day trade, before settling with a slight gain of 1 paisa. But this minimal recovery doesn’t mask the fact that the rupee is teetering on the edge of unprecedented lows.

Fresh Optimism or Temporary Relief?
Earlier in the morning, the rupee had actually recovered 8 paise to 84.78, bolstered by foreign fund inflows and a positive trend in domestic equities. But this was short-lived. Despite the recovery, market sentiment remains volatile, as the currency continues to face downward pressure amid uncertain global and domestic conditions.

RBI Leadership Shift: A New Era Under Sanjay Malhotra
Adding to the uncertainty, the Reserve Bank of India is witnessing a leadership change. On Monday, the government appointed Sanjay Malhotra as the 26th Governor of the RBI, replacing Shaktikanta Das. During his tenure, Das had been instrumental in implementing policies that protected the rupee from drastic declines, leading many to speculate about the future direction of the central bank’s monetary policy. Malhotra’s economic stability-first approach has stirred mixed reactions, leaving traders questioning how he’ll navigate the rupee’s challenges.

What’s Next for the Rupee?

The rupee’s decline on Monday marked its sharpest fall in over a month, dropping 20 paise to 84.86. However, the fresh foreign fund inflows and positive domestic equities could provide some support in the short term.
The dollar index remained steady at 106.15, and Brent crude saw a slight dip, falling 0.36% to $71.88 per barrel, possibly easing some pressure on the rupee from higher oil prices.

Key Takeaways: The rupee’s volatility is far from over. With Sanjay Malhotra’s leadership ushering in a period of policy uncertainty, it’s unclear whether the rupee will stabilize or continue its downward trend. As traders and investors wait for clarity, foreign fund inflows and domestic equity movements will play a key role in determining the rupee’s direction in the coming days.

Stocks Highlights

Shriram Finance Ltd. witnessed a 2.40% uptick in its share price, rising from Rs 3,106.90 to Rs 3,181.60. While the intraday movement shows an initial surge, the deeper signals hint at potential trouble ahead. Over the last 20 years, only 2.24% of trading sessions saw intraday declines higher than 5%. Does this indicate a rare, sharp fall in the near future?

Warning Signs: Bears on the Horizon
In a bearish turn of events, Shriram Finance Ltd. triggered two key sell signals. First, a 50-day moving average crossover appeared yesterday, a signal that historically led to an average decline of -4.98% within 30 days over the past five years. Then, a 5-day moving average crossover appeared, indicating an average price drop of -3.15% within 7 days. With these bearish signals emerging, is it time to exit?

The Expense Breakdown: A Heavy Burden
Looking at the company’s financials, Shriram Finance Ltd. has spent 42.67% of its operating revenue on interest expenses and 9.54% on employee costs in the fiscal year ending March 31, 2024. Could these high expenses weigh on profits?

Bharti Airtel Ltd. saw a -1.40% dip in its stock price, dropping from Rs 1,602.55 to Rs 1,580.05. While this may appear as a negative move, the overall performance paints a more bullish picture.

Quarterly Growth: A Strong Foundation
Despite the price drop, Bharti Airtel showed 7.35% QoQ revenue growth, the highest in the last three years. Strong topline performance hints that the company is still on solid ground, and the dip could be a short-term pullback before more gains.

Buy Signal: Bulls Are Taking Control
Despite the recent fall, Bharti Airtel Ltd. has triggered a 50-day moving average crossover, indicating that bulls are in control. Historically, this signal has led to an average price gain of 3.43% within 30 days over the past five years. With this bullish signal, should investors buy the dip?

Financial Overview: Efficient Cost Management
In terms of expenses, Bharti Airtel Ltd. has spent 15.1% of its operating revenues on interest expenses and 3.55% on employee costs for the fiscal year ending March 31, 2024.

Advance Decline Ratio

Today, the advance-decline ratio was 0.98 and the market breadth was negative. The volatility index India Vix decreased by 2.33 to settle at 13.78 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1381
Decliners – 1405
52Wk High – 124
52Wk Low – 17
High Band Hitters – 127
Low Band Hitters – 48
200d SMA – 23743
50d SMA – 24489
20d SMA – 24095

Top Gainers and Losers Stocks

The top gainers were Shriram Finance (+2.40%), Bajaj Finserv (+1.65%), HCL Technologies (+1.42%), Wipro (+1.40%), and Infosys (+1.22%).

The top losers were Bharti Airtel (-1.40%), Dr. Reddy (-1.33%), Adani Ports (-1.17%), Adani Enterprises (-1.14%), and HDFC Life (-1.09%).

Top Gainers and Losers Sectors

The top gainer sectors were Realty (+1.43%), IT (+0.82%), Financial Services (+0.33%), Consumer Durables (+0.27%), and Metal (+0.21%).

The top losers sectors were Media (-0.68%), Oil & Gas (-0.26%), Pharma (-0.08%), and Auto (-0.03%).

SECTORS – NOTABLE ACTION
REALTY +1.43%
IT +0.82%
FINANCIAL SERVICES +0.33%
MEDIA -0.68%
OIL & GAS -0.26%
PHARMA -0.08%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at +582.80), (RBLBANK close at +178.08), (PVRINOX close at +1492.30), and (MANAPPURAM close at +175.57) 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.

HINDCOPPER, ABFRL, SAIL, and BANDHANBNK stocks has the possibilities of entrants in the ban list.