Markets in the red! is Nifty heading for a deeper plunge?

At the close, the Nifty 50 was at 24,918.45 down by 0.49%

September 11, 2024. Today’s market spectacle saw the NSE Nifty 50 open in the red, continuing its downward slide with a 0.49% drop, closing at 24,918.45—well below the crucial 25,000 mark. The session was marked by volatility, with the benchmark indices ending sharply lower.

What led to this market shift? The day was plagued by losses in the auto, metal, and banking sectors, overshadowed by weak global sentiment and sector-wide selling. The Nifty 50’s two-session winning streak came to an abrupt halt as it fell by 122.65 points.

Profit booking at elevated levels contributed to the drop, with late-session selling pushing key indices deeper into the red. Investors are now bracing for key US inflation data due this Friday, which may provide clues on the Federal Reserve’s approach to interest rates in its upcoming policy meeting.

Why the anxiety?

Concerns about a potential slowdown in China and the recent dip in crude oil prices are weighing heavily on market sentiment. The global scene isn’t helping either, with US and Asian stocks slipping due to growth concerns. Adding to the uncertainty, the yen strengthened after a Bank of Japan member hinted at possible rate hikes.

Will the Federal Reserve’s decision next week bring clarity? The crucial question is whether the Fed will opt for an aggressive rate cut or a more measured approach, especially with the job market showing signs of slowing. Wednesday’s CPI data is expected to influence these expectations.

Domestically, the market showed minor consolidation in line with Asian peers, influenced by the correction in commodity prices and ongoing concerns about the Chinese economy. US inflation is anticipated to rise, while domestic inflation is expected to remain stable. Moreover, signals from the Bank of Japan regarding potential rate hikes if inflation remains high have added to the caution.

Will the Nifty 50 bounce back, or are we in for more turbulence? With Friday’s US inflation data looming large, all eyes are on how these developments will shape market movements in the coming days. Stay tuned as we navigate through this unpredictable landscape.

Bank Nifty: Down by 0.51%

The Bank Nifty kicked off the trading session on a negative note, declining by 0.51% to close at 51,010.00. This dip reflects a broader sentiment of caution among investors, mirroring the overall market trend. Similarly, the BSE Sensex also ended the day in the red, down by 0.49%, closing at a low of 81,523.16.

In the sectorial front, the FMCG sector saw an impressive rise, gaining 0.82%. Within this sector, Varun Beverages Ltd. outshined its peers with a 3.50% surge, while United Spirits Ltd. followed suit with a 1.18% gain.

The Oil & Gas sector faced notable losses, declining by 1.92%. Among the top losers, Oil India Ltd. plummeted by 4.31%, while Indian Oil Corporation Ltd. experienced a drop of 3.11%.

Foreign Institutional Investors (FIIs) recorded a notable net buying value of Rs. 1,755.00 crore. With a buy value of Rs. 15,414.60 crore and a sale value of Rs. 13,659.60 crore.

Domestic Institutional Investors (DIIs) reported a more modest net buying value of Rs. 230.90 crore. They recorded a buy value of Rs. 11,401.90 crore and a sale value of Rs. 11,171.00 crore.

Bank Nifty

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

The gainers included AU Bank with a 0.64% increase, Axis Bank with a 0.12% increase, and ICICI Bank with a 0.06% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 2.17% decline, Punjab National Bank with a 1.77% decline, State Bank of India with a 1.49% decline, IDFC First Bank with a 1.29% decline, and Bank of Baroda with a 1.23% decline. These results suggest that some of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 11th September, 2024

Rupee Strengthens Amidst Global Market Fluctuations

On Wednesday, the Indian rupee pulled off a remarkable feat, holding its ground with a modest gain of 2 paise to close at 83.96 against the US dollar. What’s behind this surprising stability?

The rupee’s resilience comes amid a whirlwind of market dynamics, notably easing crude oil prices and a synchronized movement with other Asian currencies. This calm in the currency storm is not just a fluke. The Reserve Bank of India (RBI) has been working behind the scenes, actively intervening to keep the rupee in check.

But that’s not all. Forex traders have noted a surge in foreign institutional inflows, adding another layer of support to the rupee. Recent corrections in the dollar index and oil prices have also played their part, ensuring the rupee remains snug within a tight trading range.

Yet, the story isn’t as straightforward as it seems. Just the day before, the rupee had dipped slightly by 3 paise to 83.98, reflecting a 0.21% drop in the dollar index, which now stands at 101.42 points. Brent crude oil, on the other hand, ticked up by 0.48%, reaching USD 69.52 per barrel in futures markets.

Will the current level of crude oil at USD 69 per barrel offer a cushion for the rupee? With India being a major oil importer, cheaper oil could be a boon. Despite the recent fluctuations, the rupee’s future looks promising due to robust economic fundamentals, a dip in oil prices, strengthening Asian currencies, and rising interest differentials.

Will the RBI’s support continue to prop up the rupee, or are there hidden forces that could shake this delicate balance? Stay tuned as we keep a close watch on these evolving dynamics.

Stocks Highlights

Bajaj Auto Ltd. saw a promising rise of 4.03%, with its share price climbing from Rs 10,987.75 to Rs 11,430.15. Historically, only 1.34% of trading sessions over the past 16 years have recorded intraday gains surpassing 5%.

Notably, the company is now facing new debt obligations, marking its first such instance in five years. Despite this, Bajaj Auto’s revenue growth of 23.02% outpaced its three-year CAGR of 16.68%, indicating a bullish trend. A recent 5-day moving average crossover suggests a potential average gain of 2.4% within the next week.

On the flip side, Tata Motors Ltd. encountered a setback, with its stock declining by -5.73% to Rs 976.40. Historically, only 2.37% of trading sessions in the past 19 years have seen declines exceeding 5%.

The company’s Return on Equity (ROE) of 36.97% for the year ending March 31, 2024, significantly surpasses its five-year average of -1.07%. However, Tata Motors reported a QoQ revenue dip of 9.74%, the most significant in the past three years. Despite this, its three-year stock return of 246.48% far outstrips the Nifty 100’s 47.35% return.

Advance Decline Ratio

Today, the advance-decline ratio was 0.52, and the market breadth was negative. The volatility index India Vix increased by 2.00 to settle at 13.63 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 926
Decliners – 1787
52Wk High – 147
52Wk Low – 26
High Band Hitters – 115
Low Band Hitters – 72
200d SMA – 22712
50d SMA – 24646
20d SMA – 24924

Top Gainers and Losers Stocks

The top gainers were Bajaj Auto (+4.03%), Asian Paint (+2.23%), Bajaj Finance (+1.65%), Shriram Finance (+0.86%), and Britannia (+0.80%).

The top losers were Tata Motors (-5.73%), ONGC (-2.94%), Wipro (-1.85%), Larsen & Toubro (-1.56%), and Adani Enterprises (-1.55%).

Top Gainers and Losers Sectors

The top gainers sector were FMCG (+0.28%), and Consumer Durables (+0.10%).

The top losers sector were Oil & Gas (-1.92%), Media (-1.50%), Metal (-1.40%), Auto (-1.24%), and Realty (-1.16%).

SECTORS – NOTABLE ACTION
FMCG +0.28%
CONSUMER DURABLES +0.10%
OIL & GAS -1.92%
MEDIA -1.50%
METAL -1.40%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN close at -551.55), (CHAMBLFERT close at -502.30), (ABFRL close at +317.35), (BANDHANBNK close at -195.69), (HINDCOPPER close at -307.00), (RBLBANK close at -209.69), and (BIOCON close at -385.30) 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, NMDC, PNB, SAIL, GMRINFRA, CANBK, LICHSGFIN, BANKBARODA, DIXON, GNFC, LTF, IDFCFIRSTB, and NATIONALUM stocks has the possibilities of entrance in the ban list.

BIOCON, stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 24700 to 25100 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Can Nifty Break Through the 25,200 Barrier? What Lies Ahead for All-Time Highs?
Did Nifty Just Hint at a Market Rebound or More Uncertainty?

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