Is the Nifty signaling a hidden shift before the FOMC decision? What’s lurking in the charts?

At the close, the Nifty 50 was at 25,377.55 down by 0.16%

September 18, 2024. In a dramatic turn of events, the NSE Nifty 50 kicked off today in the red, slipping by 0.16% and ending the day below the crucial 25,400 mark. The market witnessed a small negative candle formation on the daily chart, hinting at profit-taking as investors awaited the highly anticipated FOMC rate cut decision.

Wednesday’s market drama saw the Nifty50 retreat from its record highs, closing lower despite hitting new peaks during the morning. The mood turned somber as investors opted to cash in on gains ahead of the US Federal Reserve’s crucial interest rate announcement.

After reaching an intraday high of 25,482, the Nifty 50 plummeted to close at 25,377.55, ending 41 points or 0.16% in the red. This volatility highlights a market caught between record highs and cautious sentiment. Despite a hopeful start led by banking stocks, the broader market succumbed to selling pressure across sectors, with only the banking names holding their ground.

The Fed’s upcoming

The Fed’s upcoming decision is shrouded in uncertainty: will it be a 25 basis points or a 50 basis points cut? This ambiguity could influence Indian equities’ near-term trajectory, impacting foreign inflows and shaping the outlook for IT and pharma sectors.

As the Nifty index oscillated, traders faced profit-booking scenarios amidst the volatile environment. With Nifty reaching new heights but closing about 130 points below its peak, a cautious stance has emerged. The index has been confined within a narrow range recently, with critical support at 25,300. A fall below this could drag the market towards the 24,900-25,000 zone. Conversely, 25,500 serves as a tough resistance level, potentially stalling upward movement in the short term.

In the backdrop, the Indian market is experiencing a minor profit-taking phase and underperformance from midcaps. With global markets sending mixed signals and the FOMC rate cut decision on the horizon, investors are bracing for potential short-term underperformance due to high valuations and fluctuating metal prices. Commodities, including oil, are on a steady decline, indicating possible economic cooling. Investor caution is palpable, with rising gold prices signaling expectations of dollar weakness post-rate cut.

Will the Nifty reclaim its record highs, or is the market set for a deeper correction? The suspense continues as traders and investors await the Fed’s decision, a pivotal moment that could shape the market’s future trajectory.

Bank Nifty: Up by 1.08%

The Bank Nifty surged at the open, gaining 1.08% and managing to hold onto those gains, closing in green at 52,750.40. Meanwhile, the BSE Sensex struggled, slipping by 0.16% and ending the day in red at a low of 82,948.23.

On the sectoral front, the Financial Services sector witnessed a solid gain of 1.40%, driven by the impressive performances of key players like Shriram Finance Ltd. and Bajaj Finance Ltd. Shriram Finance Ltd. surged by 4.22%, while Bajaj Finance Ltd. followed closely with a 3.36% increase.

In contrast, the IT sector emerged as the biggest loser, falling by 3.05%. Notably, MphasiS Ltd. took a steep hit, losing 5.63%, while Tata Consultancy Services Ltd. declined by 3.50%.

Foreign Institutional Investors (FIIs) showed strong buying momentum with a total buy value of Rs. 11,654.00 crore against a sale value of Rs. 10,500.31 crore, resulting in a net inflow of Rs. 1,153.69 crore.

Domestic Institutional Investors (DIIs) were also active, recording a buy value of Rs. 11,794.51 crore and a sale value of Rs. 11,642.20 crore, leading to a modest net inflow of Rs. 152.31 crore.

Bank Nifty

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

The gainers included Bandhan Bank with a 2.30% increase, HDFC Bank with a 1.45% increase, ICICI Bank with a 1.38% increase, State Bank of India with a 1.00% increase, and Federal Bank with a 0.88% increase.

On the other hand, the biggest losers in the sector included Bank of Baroda with a 0.88% decline, IDFC First Bank with a 0.83% decline, and Kotak Bank with a 0.44% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 18th September, 2024

Stocks Highlights

Shriram Finance Ltd. has recently seen its share price surge by 4.22%, climbing from its previous close of Rs. 3,424.60 to a last traded price of Rs. 3,569.00. Over the past 19 years, only 3.38% of trading sessions for this stock have experienced intraday gains exceeding 5%. Despite this uplift, the company’s quarterly revenue showed a modest decline of 3.11% QoQ, marking the lowest drop in three years.

This performance stands out when juxtaposed with its impressive three-year return of 143.5%, far outpacing the Nifty 100’s return of 47.58%. Additionally, Shriram Finance allocated 42.67% of its operating revenues to interest expenses and 9.54% to employee costs for the fiscal year ending March 31, 2024.

Tata Consultancy Services Ltd. paints a different picture. The company’s share price has decreased by -3.50%, settling at Rs. 4,347.90 from its previous close of Rs. 4,505.65. Remarkably, in the last 19 years, only 0.94% of trading sessions experienced intraday declines surpassing 5%. TCS boasts a zero debt status for the past five years, a testament to its financial prudence.

Its cost structure reveals a negligible 1% spent on interest and a substantial 58.17% on employee expenses for the year ending March 31, 2024. The recent appearance of a bearish signal, marked by a 5-day moving average crossover, suggests a potential trend reversal. Historically, such signals have led to an average price drop of -1.91% within a week.

Advance Decline Ratio

Today, the advance-decline ratio was 0.47, and the market breadth was negative. The volatility index India Vix increased by 6.21 to settle at 13.37 and the FIIs were net buyer today.

DAILY MARKET ACTION
Advancers – 891
Decliners – 1876
52Wk High – 131
52Wk Low – 39
High Band Hitters – 102
Low Band Hitters – 81
200d SMA – 22851
50d SMA – 24757
20d SMA – 25134

Top Gainers and Losers Stocks

The top gainers were Shriram Finance (+4.22%), Bajaj Finance (+3.36%), Bajaj Finserv (+1.76%), Nestle India (+1.72%), and HDFC Bank (+1.45%).

The top losers were TCS (-3.50%), Infosys (-3.08%), HCL Technologies (-3.07%), Tech Mahindra (-2.83%), and Wipro (-2.57%).

Top Gainers and Losers Sectors

The top gainers sector were Financial Services (+1.40%).

The top losers sector were IT (-3.05%), Pharma (-1.53%), Oil & Gas (-1.02%), Consumer Durables (-0.86%), and Metal (-0.83%).

SECTORS – NOTABLE ACTION
FINANCIAL SERVICES +1.40%
IT -3.05%
PHARMA -1.53%
OIL & GAS -1.02%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at +547.45), (BIOCON close at -363.65), (LICHSGFIN close at -674.60), (GNFC close at -654.90), (PNB close at +108.75), (AARTIIND close at -561.25), (BSOFT close at -630.80), (BALRAMCHIN close at +573.25), (RBLBANK close at -211.41), and (HINDCOPPER close at +320.25) 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, ABFRL, NATIONALUM, HAL, PEL, IDFCFIRSTB, OFSS, TATACHEM, DIXON, MANAPPURAM, NMDC, CANBK, GMRINFRA, and BANKBARODA stocks has the possibilities of entrance in the ban list.

BALRAMCHIN, RBLBANK, and HINDCOPPER 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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This article is only for educational purposes and is not an investment advice.