Market Faces Selling Pressure as Banking Stocks Decline on RBI Measures

NiftyTrader • August 11, 2023

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Index	Price	Change	% Chg
Nifty 50	19,428.30	–114.80	-0.59%
Nifty Bank	44,199.10	–342.70	-0.77%
BSE SENSEX	65,322.65	–365.53	–0.56%

At the close, the Nifty 50 was at 19,428.30 down by 0.59%

The day began with a pessimistic tone, and as it progressed, the benchmark indices faced sustained losses. While a partial recovery was observed in the afternoon, the inability to capitalize on this momentum led to a conclusion of the session close to the day’s low. This persistent downward trend has marked the second consecutive session of losses, signaling cautious market sentiment.

The NSE Nifty 50 opened in the red, enduring a decline of 0.59% throughout the day and ultimately closing in the negative territory. With the Nifty dipping below the 19,450 mark, this bearish sentiment raises concerns about the market’s short-term direction.

The Nifty’s chart indicates a noteworthy development – it experienced follow-through selling pressure, resulting in a breach of the inside bar pattern established during the previous trading session. This downward move is significant from a technical standpoint, indicating potential shifts in market sentiment and the possibility of further declines.

Global factors have played a pivotal role in influencing the Indian equity market’s performance. Weak cues from both European and Asian markets have contributed to the subdued atmosphere. Furthermore, apprehensions surrounding China’s potential stagflation due to weakening demand are adding to investor anxiety. This apprehension has prompted investors to divest from domestic equities.

Bank Nifty: Down by 0.77%

Both the Bank Nifty and BSE Sensex commenced the trading day in a downtrend, with the former encountering a decline of 0.77% and closing at 44,199.10. Similarly, the BSE Sensex experienced a 0.56% drop, concluding at a low of 65,322.65. These numbers indicate a bearish tone and reflect the broader sentiment of the market.

Selling pressure persisted in the domestic market, accentuated by the downward trajectory of banking stocks. This decline is a response to the Reserve Bank of India’s liquidity absorption measures, which have influenced investor perceptions of the banking sector’s outlook. This regulatory influence has played a pivotal role in shaping market dynamics.

Escalating worries surrounding inflation have contributed to the prevailing market sentiment. Despite the US Consumer Price Index (CPI) registering lower than anticipated figures and the UK Gross Domestic Product (GDP) surpassing estimates, concerns about inflationary pressures have not abated. This global backdrop has added to the hesitancy among investors, affecting market performance.

Despite the variations in economic data from major economies, the overarching global sentiment remains unfavorable. These mixed indicators have created an environment of caution, leading investors to tread carefully in the current market landscape.

Consumer Durables emerges as the top gainer, boasting a 0.09% increase. Within this sector, Titan Company Ltd. exhibits a noteworthy gain of 0.96%, reflecting positive market sentiment. Similarly, Relaxo Footwears Ltd. showcases a robust gain of 0.94%, contributing to the sector’s overall ascent.

Conversely, the Media sector experiences a downturn, marking a decline of 1.83%. Dish TV India Ltd. faces a notable loss of -4.69%, while Zee Entertainment Enterprises Ltd. follows suit with a decrease of -3.81%.

Bank Nifty

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

The gainers included Punjab National Bank with a 1.96% increase, IDFC First Bank with a 0.69% increase, AU Bank with a 0.57% increase, Bank of Baroda with a 0.42% increase and State Bank of India with a 0.15% increase. On the other hand, the biggest losers in the sector included IndusInd Bank with a 2.44% decline, ICICI Bank with a 1.01% decline, HDFC Bank with a 0.91% decline, Kotak Bank with a 0.41% decline, and Axis Bank with a 0.21% decline. These results suggest that some banking stocks performed better for the day.

Buzz

Rupee Depreciates Amid Market Sentiment and Strong Dollar

The Indian rupee experienced a 19 paise depreciation against the US dollar, settling at 82.85 (pro) on Friday. This downward movement can be attributed to the prevailing weak sentiment in the equity markets and the dollar’s strength against major currencies globally.

Despite these challenges, the rupee found some support from foreign fund inflows and a decline in crude oil prices. These factors helped mitigate the impact of the negative sentiment in the market. Additionally, investors were keenly awaiting India’s industrial output figures, which added an element of anticipation to the market landscape.

Global oil benchmark Brent crude saw a marginal 0.02% decline, reaching USD 86.38 per barrel. This dip in crude oil prices could have contributed to the rupee’s resilience against the dollar, given India’s status as a major oil importer.

Buzzing

HCL Technologies Ltd.: The stock witnessed a 2.93% increase, closing at Rs 1,167.55 from its previous value of Rs 1,134.30. Notably, the three-year return stands at 65.88%, slightly below the Nifty 100’s return of 71.04%. An interesting indicator, the 20-day moving average crossover, emerged recently. Historical data reveals a typical average price decline of -2.44% within a week after this signal over the last five years. Additionally, the company’s QoQ revenue dipped by 1.55%, marking its lowest figure in the last three years. It’s worth noting that only 1.91% of trading sessions over the last 18 years saw intraday declines surpassing 5%.

IndusInd Bank Ltd.: In contrast, IndusInd Bank experienced a -2.44% drop in share price, settling at Rs 1,395.30 compared to the previous close at Rs 1,430.20. Impressively, the three-year return stands at 173.98%, outperforming the Nifty 100’s return of 71.04%. The bank exhibited robust annual revenue growth of 16.51%, surpassing its 3-year CAGR of 7.54%. Additionally, the YoY advances increased by 21.28%, significantly exceeding its 5-year CAGR of 9.24%. Interestingly, 3.37% of trading sessions in the last 18 years observed intraday gains exceeding 5%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.63, and the market breadth was negative. The volatility index India Vix increased by 1.07 percent to settle at 11.52 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 912
Decliners – 1440
52Wk High – 118
52Wk Low – 20
High Band Hitters – 78
Low Band Hitters – 54
200d SMA – 18281
50d SMA – 19240
20d SMA – 19657

Top Gainers and Losers Stocks

The top gainers were HCL Technologies (+2.93%), Power Grid (+1.01%), Titan (+0.96%), Tata Steel (+0.46%), and UltraTech Cement (+0.32%).

The top losers were IndusInd Bank (-2.44%), SBI Life (-1.95%), UPL (-1.80%), Tata Consumer (-1.73%), and Asian Paint (-1.64%).

Top Gainers and Losers Sector

The top gainers sectors were Consumer Durables (+0.09%).

The top losers sectors were Media (-1.83%), Pharma (-1.45%), Financial Services (-0.87%), FMCG (-0.73%), and Metal (-0.51%).

The Nifty Midcap 50 was down by 0.43 percent, while the Nifty Small Cap 50 was down by 0.15 percent on the day.

The Nifty Midcap 50 index currently closed at 10,821.85, while the Nifty Small Cap 50 index currently closed at 5,360.50.

SECTORS – NOTABLE ACTION
CONSUMER DURABLES +0.09%
MEDIA -1.83%
PHARMA -1.45%
FINANCIAL SERVICES -0.87%

Stocks Ban List

(SEBI) F&O ban list (ZEEL open at +287.00 and close at -270.90), (GRANULES open at -302.00 and close at -299.90), (MANAPPURAM open at +148.30 and close at +147.90), (CHAMBLFERT open at -269.10 and close at -265.70), (CANFINHOME open at +758.00 and close at -723.70), (DELTACORP open at -184.05 and close at -183.25), (IBULHSGFIN open at -165.60 and close at -163.20), (HINDCOPPER open at -148.80 and close at +158.95), and (BALRAMCHIN open at +395.00 and close at +390.80) 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.

GNFC, INDIACEM, PNB, BHEL, LICHSGFIN, RBLBANK, and RECLTD stocks has the possibilities of enterance in the ban list.