Is the Nifty’s Historic High Just the Beginning? Can It Shatter the Latest Barrier?

At the close, the Nifty 50 was at 25,052.35 up by 0.14%

The NSE Nifty 50 has been defying the odds, marking its tenth consecutive win and setting a new record high on August 28. Closing at 25,052.35 with a 0.14% rise, it’s the first time this index has crossed the historic 25,100 level. But what’s fueling this momentum? Strong performances in IT and pharmaceutical stocks are driving the surge, even as some investors started to book profits towards the session’s end.

Yet, there’s a twist in this tale. The market isn’t as confident as it seems. For two days in a row, Nifty has formed a Doji candlestick pattern—a sign of indecision. These patterns, with their upper and lower wicks, are a red flag, signaling that investors are unsure about the market’s next move. The index may be showing strength, but these Doji-like candles hint at resistance around the 25,100 mark. The big question is: Will the Nifty decisively break through, or is a pullback just around the corner?

On the Sensex front, there’s been a marginal gain, buoyed by factors like Foreign Institutional Investors (FIIs) turning net buyers and the anticipation of a rate cut by the US Federal Reserve in September. Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium has sparked hopes of a shift in monetary policy, potentially benefiting Indian IT firms that heavily rely on US outsourcing deals.

However, the market isn’t all sunshine and rainbows. Volatility is creeping up, with the India VIX rising by 2.32% to 13.95—a subtle hint of growing market uncertainty. And with the upcoming Q1 FY25 GDP data on the horizon, the market’s resilience is about to be tested, especially as investors flock to defensive sectors like IT and pharma.

Bank Nifty: Down by 0.26%

The Bank Nifty experienced a downturn, opening in the red and ending the session down by 0.26% at 51,143.85. In contrast, the BSE Sensex saw a modest gain, rising by 0.09% to close at a new high of 81,785.56.

In the sectorial front, the Information Technology (IT) sector emerged as the clear winner, soaring by 1.64%, driven by impressive performances from key players. LTIMindtree Ltd. led the charge, delivering a remarkable 6.31% gain, followed by Wipro Ltd., which climbed 3.71%.

On the flip side, the media sector struggled, posting a loss of 1.41%. This decline was primarily driven by significant drops in key companies, with Dish TV India Ltd. plummeting by -3.88% and Tips Industries Ltd. slipping by -3.41%.

Foreign Institutional Investors (FIIs) have been net sellers, with a buy value of Rs. 13,535.83 crore and a sale value of Rs. 14,883.36 crore, resulting in a net outflow of Rs. 1,347.53 crore.

In contrast, Domestic Institutional Investors (DIIs) exhibited a more favorable trading pattern. With a buy value of Rs. 12,746.57 crore and a sale value of Rs. 12,307.22 crore, DIIs recorded a net inflow of Rs. 439.35 crore.

Bank Nifty

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

The gainers included IndusInd Bank with a 1.87% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 2.37% decline, Punjab National Bank with a 1.11% decline, AU Bank with a 1.07% decline, State Bank of India with a 0.97% decline, and Axis Bank with a 0.96% decline. These results suggest that almost all of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 28th August, 2024

Stocks Highlights

LTIMindtree Ltd. saw its share price surge by 6.31%, jumping from Rs 5,751.55 to a last traded price of Rs 6,114.60. This impressive gain is a rare event, with intraday gains exceeding 5% occurring in just 1.35% of trading sessions over the past eight years. This spike may signal a bullish trend, especially with the recent 5-day moving average crossover on August 26, 2024, historically leading to an average price gain of 3.4% within seven days.

However, despite this positive momentum, the stock’s three-year return of 9.9% pales in comparison to the Nifty 100’s impressive 54.02% return over the same period. Additionally, the company’s financials reveal a conservative approach to expenses, with less than 1% of operating revenues allocated to interest expenses and a significant 64.0% directed towards employee costs in the year ending March 31, 2024.

On the other hand, Maruti Suzuki India Ltd. experienced a decline, with its share price dropping by -1.34%, from Rs 12,496.90 to Rs 12,330.00. Intraday gains of more than 5% have been exceptionally rare for this stock, occurring in just 1.61% of trading sessions over the last 19 years. Yet, the company’s Return on Equity (ROE) for the year ending March 31, 2024, stood at an impressive 15.75%, outperforming its five-year average of 11.7%.

The recent 50-day moving average crossover suggests that the bulls might still be in the driver’s seat, with historical data indicating an average price gain of 4.74% within 30 days of this signal. Financially, Maruti Suzuki maintains a disciplined approach, spending less than 1% of its operating revenues on interest expenses and just 4.44% on employee costs.

Advance Decline Ratio

Today, the advance-decline ratio was 0.72, and the market breadth was negative. The volatility index India Vix increased by 2.32 to settle at 13.95 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1124
Decliners – 1562
52Wk High – 169
52Wk Low – 16
High Band Hitters – 10
Low Band Hitters – 69
200d SMA – 22434
50d SMA – 24372
20d SMA – 24572

Top Gainers and Losers Stocks

The top gainers were LTIM (+6.31%), Wipro (+3.71%), Divi’s Laboratories (+2.71%), Bharti Airtel (+2.05%), and Infosys (+1.99%).

The top losers were Maruti (-1.34%), Asian Paint (-1.33%), Adani Enterprises (-1.27%), Shriram Finance (-1.17%), and Britannia (-1.13%).

Top Gainers and Losers Sectors

The top gainers sector were IT (+1.64%), and Pharma (+1.14%).

The top losers sector were Media (-1.41%), FMCG (-0.42%), Financial Services (-0.24%), Metal (-0.19%), and Realty (-0.18%).

SECTORS – NOTABLE ACTION
IT +1.64%
PHARMA +1.14%
MEDIA -1.41%
FMCG -0.42%
FINANCIAL SERVICES -0.24%

Stocks Ban List

(SEBI) F&O ban list (INDIACEM close at +371.20), (HINDCOPPER open at close at -328.65), (BSOFT close at +661.35), and (BALRAMCHIN close at -587.40) 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.

BANDHANBNK, SAIL, PEL, MANAPPURAM, LTF, GNFC, IDFCFIRSTB, LICHSGFIN, DEEPAKNTR, PNB, ZYDUSLIFE, and NMDC stocks has the possibilities of entrance in the ban list.

BSOFT, and BALRAMCHIN stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 24800 to 25200 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Will the Nifty 50 Break Free or Stay Trapped? Market’s Unsettling Day of Gains and Uncertainty
After Powell’s Hint? Will the Nifty 50’s Rally Continue or Is a Twist Around the Corner?

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