Mixed Global Cues Impact Market Opening, But Heavyweights Drive Mid-Session Recovery

At the close, the Nifty 50 was at 19,140.90 up by 0.49%

In the Indian stock markets, the NSE Nifty 50 showed impressive resilience by starting the day positively and ending with a 0.49 percent gain, pushing the Nifty above the 19,100 mark. This marked the second consecutive session of gains, highlighting the market’s recovery potential.

Despite a somewhat uncertain start due to mixed global cues, the market managed to bounce back from initial losses, mainly due to mid-session buying in prominent sectors such as oil & gas and real estate. The indices closed the day near their highest points, leaving investors with an optimistic outlook.

On the international front, the positive performance of European and Asian markets provided hope amid ongoing geopolitical risks in West Asia. The recent heavy selling witnessed last week has given way to a short-term rebound, thanks to a moderation in crude oil prices and reassuring Q2 results.

However, a sustained market recovery depends on a significant reduction in global geopolitical risks and stability in global bond yields. Investors are closely watching this week’s US Federal Reserve meeting, which is expected to maintain the status quo. The current level of elevated bond yields will likely continue to be a focal point for investors, underscoring the importance of a reasonable medium-term target for the Federal Reserve’s rate trajectory.

Bank Nifty: Up by 0.60%

The Bank Nifty, which initially started in the negative, displayed resilience by registering a 0.60 percent gain. This positive momentum led the index to close in the green at 43,039.15, signaling a favorable turn of events. Similarly, the BSE Sensex, one of India’s prominent stock indices, delivered a commendable performance. It began the day with a slight dip but rebounded to finish in positive territory with a 0.52 percent gain, reaching a high of 64,112.65.

In terms of sector performance, the Realty sector showed remarkable growth, surging by 2.14%. This upward trajectory was reflected in key players within the sector, such as Swan Energy Ltd., which recorded a significant gain of 5.23%, and Dlf Ltd., experiencing a substantial increase of 3.94%.

Conversely, the Auto sector faced a more challenging situation, with a decline of 0.90%. This downturn was led by Tata Motors Ltd., which saw a decrease of -1.85%, and Maruti Suzuki India Ltd., posting a loss of -1.53%.

FII/FPI activity revealed a total purchase value of Rs. 6,653.70 crore and a sale value of Rs. 8,415.56 crore. Consequently, the net value stood at -Rs. 1,761.86 crore. This indicates that foreign investors were net sellers during this period, with the outflow exceeding the inflow by the mentioned amount.

Conversely, DII investment activity showed a buy value of Rs. 7,523.60 crore and a sale value of Rs. 6,195.13 crore. As a result, the net value for DII stood at Rs. 1,328.47 crore. This signifies that domestic institutional investors were net buyers, with a net inflow of Rs. 1,328.47 crore during the period under consideration.

Bank Nifty

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

The gainers included HDFC Bank with a 1.27% increase, ICICI Bank with a 1.26% increase, Federal Bank with a 1.15% increase, Bank of Baroda with a 0.99% increase, and Kotak Bank with a 0.97% increase. On the other hand, the biggest losers in the sector included AU Bank with a 3.72% decline, IDFC First Bank with a 3.08% decline, and Axis Bank with a 1.31% decline. These results suggest that some banking stocks performed better for the day.

Buzz

Rupee Holds Steady Amidst External Pressures and Domestic Resilience

The Indian rupee demonstrated resilience in the face of external challenges, holding steady at 83.25 against the US dollar on Monday. This stability was achieved despite sustained foreign fund outflows and the continued strength of the American currency in the global market, factors that had been casting shadows on investor sentiments.

The rupee’s performance remained largely flat with a minor negative bias, primarily due to the robust US dollar and selling pressure exerted by foreign funds. Nevertheless, there were mitigating factors at play. A positive tone in the domestic equities market, along with a decrease in crude oil prices, acted as cushions against any significant decline. The strength of the US dollar, which gained due to safe-haven demand amid escalating tensions in the Middle East as Israel expanded its ground operations in Gaza, could not dent the rupee’s resilience.

In a range-bound trade, the rupee opened at 83.25 and settled at the same level against the US dollar, all the while the domestic equity market displayed a smart recovery and ended the day on a positive note. This stability follows the rupee’s performance on the previous Friday when it also held firm at 83.25 against the US dollar. Furthermore, global oil benchmark Brent crude recorded a 1.55 percent decline, falling to USD 89.18 per barrel, providing another layer of support for the rupee.

Buzzing

Bharat Petroleum Corporation Ltd. (BPCL) exhibited a positive trend, with its share price increasing by 3.45% from the previous closing price of Rs 334.95. The stock last traded at Rs 346.50. It’s worth noting that a sell signal has been triggered, suggesting the possibility of bearish movement. A weekly stochastic crossover occurred on the week ending October 27, 2023, and historical data indicates an average price decline of -6.12% within 7 weeks following such signals over the last decade.

On the brighter side, BPCL has outperformed its 3-year Revenue CAGR (Compound Annual Growth Rate) with an impressive annual revenue growth of 35.99%. Additionally, the company has maintained a prudent financial approach, allocating less than 1% of its operating revenues to interest expenses and only 0.59% towards employee costs for the year ending March 31, 2023.

On the other hand, UPL Ltd. experienced a decline in its share price, dropping by -4.59% from the previous closing price of Rs 558.65, with the stock last trading at Rs 533.00. A sell signal has also been generated, indicating a potential bearish phase. Historical data shows that, on average, prices have declined by -7.16% within 7 weeks following such signals over the past decade.

In terms of financial performance, UPL Ltd. faced challenges, witnessing a significant quarter-over-quarter revenue decline of 45.98%, the lowest in the last 3 years. Furthermore, the company allocated 5.53% of its operating revenues to interest expenses and 9.44% to employee costs for the year ending March 31, 2023.

Advance Decline Ratio

Today, the advance-decline ratio was 1.12, and the market breadth was positive. The volatility index India Vix increased by 5.36 percent to settle at 11.49 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1283
Decliners – 1143
52Wk High –  65
52Wk Low – 25
High Band Hitters – 125
Low Band Hitters – 82
200d SMA – 18619
50d SMA – 19582
20d SMA – 19510

Top Gainers and Losers Stocks

The top gainers were BPCL (+3.45%), UltraTech Cement (+2.24%), ONGC (+2.17%), Reliance (+1.91%), and SBI Life (+1.73%).

The top losers were UPL (-4.59%), Tata Motors (-1.85%), Maruti (-1.53%), Eicher Motors (-1.32%), and Axis Bank (-1.31%).

Top Gainers and Losers Sector

The top gainers sector were Realty (+2.14%), Oil & Gas (+1.34%), Financial Services (+0.59%), Pharma (+0.25%), and Metal (+0.23%).

The top losers sector were Auto (-0.90%), Consumer Durables (-0.51%), FMCG (-0.42%), and Media (-0.06%).

SECTORS – NOTABLE ACTION
REALTY +2.14%
OIL & GAS +1.34%
FINANCIAL SERVICES +0.59%
AUTO -0.90%
CONSUMER DURABLES -0.51%
FMCG -0.42%

Stocks Ban List

Today, the Securities and Exchange Board of India (SEBI) has not included any stock in the F&O ban list.

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.

Daily Pivots

As per the above pivots data, 18990 to 19230 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Nifty50 Ends Higher, Breaking Six-Day Losing Streak
Bears Tighten Grip on Dalal Street Sixth Session Plagued by US Bond Yields and Geopolitical Tensions
Market Edgy as West Asia Tensions Persist

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