Market Opens Negative, Extends Losses Across Sectors

At the close, the Nifty 50 was at 18,989.15 down by 0.47%

The NSE Nifty 50 commenced the trading day with a 0.47% decline, closing below the 19,000 level. This was the second consecutive session of decline in Indian equity indices, influenced by various factors.

The market’s negative start was primarily attributed to weak manufacturing data for October and anticipation surrounding the outcome of the FOMC meeting in the United States. Despite favorable global cues, the day began on a pessimistic note and remained relatively stable during the first half of trading. However, the market saw increased losses in the latter half due to selling pressures across multiple sectors, eventually closing near its lowest point of the day.

The upcoming FOMC meeting is expected to maintain current interest rates, but Fed Chief Powell is likely to adopt a more hawkish stance given the surprising resilience of the economy, characterized by a robust 4.9% growth in Q3 GDP. High bond yields in the US also signal market expectations of a prolonged period of higher interest rates.

While the Fed meeting’s outcome is not expected to bring significant surprises, the market may still face pressure from the high bond yields, potentially leading to continued selling by Foreign Institutional Investors (FIIs). This could result in sector-specific weaknesses, especially in financials, where FIIs have significant investments. However, these weaknesses may present attractive buying opportunities for long-term investors willing to withstand short-term market fluctuations.

Bank Nifty: Down by 0.34%

The recent performance of the Bank Nifty index and the BSE Sensex offers valuable insights into the current market dynamics. The Bank Nifty index exhibited a doji candle pattern, signaling a state of uncertainty and indecision among market participants. This pattern reflects a standoff between bullish and bearish forces, with neither group decisively taking control at present levels.

On that specific trading day, the Bank Nifty opened in the red, starting with a negative tone, and ultimately closed with a 0.34% decline, settling at 42,700.95. Similarly, the BSE Sensex experienced a 0.44% decrease, ending the day in negative territory at 63,591.33.

The presence of the doji pattern underscores the market’s ambiguity and the ongoing battle between buyers and sellers.

In the sectoral landscape, the real estate sector is currently showing robust growth, with a significant 1.55% gain. Key players in this sector have delivered noteworthy performances. The Phoenix Mills Ltd. stands out with an impressive gain of 3.84%, while Oberoi Realty Ltd. follows closely with a substantial 2.13% increase.

Conversely, the metal sector has encountered a challenging period, experiencing a 1.43% decline. Jindal Steel & Power Ltd. is among the leading decliners in this sector, enduring a significant loss of -7.83%. Adani Enterprises Ltd. is another noteworthy underperformer, with a loss of -3.43%.

Foreign Institutional Investors (FII/FPI) were net sellers on this trading day, buying stocks worth Rs. 6,674.26 crores and selling stocks worth Rs. 8,491.17 crores, resulting in a net value decrease of -Rs. 1,816.91 crores.

In contrast, Domestic Institutional Investors (DII) were net buyers, acquiring stocks worth Rs. 7,617.09 crores and selling stocks worth Rs. 5,995.04 crores, leading to a net value increase of Rs. 1,622.05 crores.

Bank Nifty

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

The gainers included State Bank of India with a 0.31% increase, and HDFC Bank with a 0.03% increase. On the other hand, the biggest losers in the sector included IDFC First Bank with a 1.81% decline, Axis Bank with a 1.06% decline, Kotak Bank with a 0.89% decline, IndusInd Bank with a 0.44% decline, and Bandhan Bank with a 0.30% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

The Indian rupee recently plummeted to a historic low due to a combination of factors that have heightened market uncertainty. The currency’s decline was primarily driven by a surge in demand for the US dollar, coupled with elevated US yields, which were influenced by the imminent Federal Reserve rate decision.

Despite the central bank’s intermittent dollar selling interventions in recent sessions, the rupee could not escape the downward spiral. It concluded at a record closing low of 83.29 after touching an all-time low of 83.2950 during the session, compared to its previous close at 83.25.

The root of this depreciation lies in expectations that the Federal Reserve will maintain high-interest rates for an extended period, triggering a selloff in longer-maturity Treasuries and boosting the US dollar. While the Fed is not expected to adjust rates immediately, speculations are ripe for a potential rate increase in December, adding further volatility to the market.

Moreover, falling forward premiums, driven by concerns over dollar liquidity, and equity outflows have added to the downward pressure on the rupee. This situation has had a broader impact on Asian currencies, with the Korean won leading the losses and the dollar index strengthening to 106.88.

In light of these developments, investors should closely monitor the evolving market dynamics, hedge currency risks, and consider diversifying their portfolios to mitigate potential losses. The Indian rupee’s vulnerability underscores the importance of staying informed and adaptable in today’s global financial landscape.

Buzzing

Sun Pharmaceutical Industries Ltd. Sun Pharmaceutical Industries Ltd. exhibited positive market performance with a share price increase of 2.61%, reaching Rs 1,117.00. Notably, the company’s annual revenue growth of 12.49% has outperformed its 3-year Compound Annual Growth Rate (CAGR) of 9.87%. Moreover, Sun Pharma delivered a Return on Equity (ROE) of 15.13% in the year ending 31 March 2023, surpassing its 5-year average of 8.89%. Additionally, the company’s prudent financial management is evident in its allocation of resources, with less than 1% of operating revenues dedicated to interest expenses and 18.9% to employee costs, underscoring its fiscal responsibility.

Adani Enterprises Ltd. In contrast, Adani Enterprises Ltd. experienced a -3.43% drop in share price, closing at Rs 2,215.90. Nevertheless, a bullish trend may be emerging, supported by a 5-day moving crossover signal on October 30, 2023, which has historically yielded an average price gain of 5.02% within 7 days. The company’s remarkable annual revenue growth of 96.18% significantly outperformed its 3-year CAGR of 45.79%. However, it’s noteworthy that Adani Enterprises allocated 2.9% of its operating revenues to interest expenses and 1.37% to employee costs in the fiscal year ending 31 March 2023, necessitating a careful evaluation of its financial management.

Advance Decline Ratio

Today, the advance-decline ratio was 0.63, and the market breadth was negative. The volatility index India Vix increased by 1.88 percent to settle at 12.05 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 938
Decliners – 1478
52Wk High –  59
52Wk Low – 25
High Band Hitters – 100
Low Band Hitters – 52
200d SMA – 18629
50d SMA – 19570
20d SMA – 19455

Top Gainers and Losers Stocks

The top gainers were Sun Pharmaceutical (+2.61%), BPCL (+2.22%), HDFC Life (+0.87%), Hindalco (+0.64%), and Tata Consumer (+0.47%).

The top losers were Adani Enterprises (-3.43%), Coal India (-2.32%), Tata Steel (-2.19%), SBI Life (-2.13%), and Adani Ports (-2.01%).

Top Gainers and Losers Sector

The top gainers sector were Realty (+1.55%), Media (+0.88%), Pharma (+0.35%), and Oil & Gas (+0.22%).

The top losers sector were Metal (-1.43%), IT (-0.78%), Auto (-0.51%), FMCG (-0.34%), and Financial Services (-0.31%).

SECTORS – NOTABLE ACTION
REALTY +1.55%
MEDIA +0.88%
PHARMA +0.35%
METAL -1.43%
IT -0.78%
AUTO -0.51%

Stocks Ban List

(SEBI) F&O ban list (GNFC open at +693.70 and close at +692.20) 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.

MANAPPURAM stocks has the possibilities of enterance in the ban list.

Daily Pivots

As per the above pivots data, 18930 to 19080 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Volatile Session Ends on a Sour Note for Indian Benchmark Indices
Mixed Global Cues Impact Market Opening, But Heavyweights Drive Mid-Session Recovery
Nifty50 Ends Higher, Breaking Six-Day Losing Streak

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