Nifty 50 Rises to New Heights: Will the Fed Rate Cut Shape Future Trends?

At the close, the Nifty 50 was at 25,383.75 up by 0.11%

Nifty hits a fresh all-time high, but can it sustain the upward journey?
September 16, 2024. Today, NSE Nifty 50 opened on a positive note, climbing by 0.11%, and continued to close in the green. As the market opened, there was hope, but traders were already looking at something more significant—a potential U.S. Federal Reserve rate cut. A bigger-than-expected rate cut could ignite foreign investments, reshaping market trends for weeks to come.

The session was anything but smooth. Nifty began strong, closing the day above 25,350. Yet, despite climbing to a fresh record during the day, it couldn’t hold above 25,400 for the third straight session. Traders were left wondering: Is 25,400 an unbreakable barrier?

On Monday, Indian markets broke their three-day losing streak, reaching new highs. Banking, metal, and energy stocks led the charge, lifting Nifty to finish near 25,400. But even with this momentum, the index hovered in a narrow range, showing caution as traders awaited crucial market cues.

Bargain hunters jumped in,

Especially in energy, utility, and banking stocks, pushing Nifty to an intraday record. Yet, just as quickly, the gains were erased, forcing the index into range-bound trading. It was a day where every high seemed fragile, with buyers stepping in only at lower levels to keep the market afloat.

The technical charts tell a similar story—strong but with limited upward potential in the short term. Investors have their eyes set on the Fed’s Wednesday meeting, which could be a game changer. The real question remains: Will the market rally continue, or is it heading toward consolidation?

On the global front, equity markets are focused on one event—the Fed’s decision. With the first rate cut in four years almost certain, the suspense is about how big it will be. Will the cut be 25 basis points or a 50? The answer could very well define the market’s next move.

International markets are also in the spotlight. Hong Kong wrapped the day with slight gains, but Japan, China, and South Korea remained closed for holidays. Meanwhile, European markets traded mostly higher, following the positive momentum from U.S. markets on Friday.

As the market inches closer to another Fed decision, uncertainty hangs in the air. Will the anticipated rate cut be enough to sustain the global market rally, or will cautious traders hold back? The next few days will reveal whether this market has the legs to keep climbing or if consolidation is just around the corner.

Bank Nifty: Up by 0.41%

Bank Nifty started the day on a positive note, opening up by 0.41% and closing strong at 52,153.15. Meanwhile, the BSE Sensex mirrored this optimism, rising by 0.12% and ending at an impressive 82,988.78. Both indices closed in green, signaling a promising day for the markets. Will this upward trend continue, or are there storm clouds on the horizon?

In the sectorial front, the Media sector has emerged as a standout performer, showing a remarkable gain of 0.99%. This sector’s upward momentum is significantly fueled by TV18 Broadcast Ltd., which experienced an impressive surge of 4.64%. Additionally, Network18 Media & Investments Ltd. also contributed positively with a 2.94% increase.

On the flip side, the FMCG sector finds itself grappling with a decline of 0.72%. This downturn is particularly evident in the performance of Varun Beverages Ltd., which saw a notable drop of -3.49%. Similarly, Godrej Consumer Products Ltd. faced a setback, with its shares slipping by -2.35%.

Foreign Institutional Investors (FIIs) have shown a significant net selling position. Their total buy value amounted to Rs. 8,617.10 crore, while their sell value reached Rs. 10,252.08 crore. This results in a net outflow of Rs. 1,634.98 crore

Domestic Institutional Investors (DIIs) have been more active on the buying front. They recorded a total buy value of Rs. 10,025.07 crore against a sale value of Rs. 9,270.98 crore. This leads to a net inflow of Rs. 754.09 crore

Bank Nifty

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

The gainers included ICICI Bank with a 1.08% increase, Axis Bank with a 1.06% increase, Kotak Bank with a 0.50% increase, IDFC First Bank with a 0.38% increase, and IndusInd Bank with a 0.34% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 0.99% decline, Federal Bank with a 0.93% decline, AU Bank with a 0.68% decline, State Bank of India with a 0.54% decline, Punjab National Bank with a 0.15% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 16th September, 2024

Indian Rupee Holds Steady Amid Fed Rate Cut Speculations

On Monday, the Indian rupee remained unchanged, closing at 83.8875 against the U.S. dollar, mirroring its previous Friday’s level. This stability comes amidst rising dollar-rupee forward premiums, fueled by expectations of a potentially substantial 50-basis-point rate cut by the U.S. Federal Reserve this week.

Despite the rupee’s resilience, it hasn’t fully capitalized on the greenback’s recent weakness. This is partly due to sustained dollar demand from local importers, including oil companies, which have been actively purchasing dollars. As a result, the dollar index fell by 0.3% to 100.7, while most Asian currencies, including the rupee, showed mixed performance.

In September, the rupee has remained relatively flat, contrasting with the appreciation seen in many of its Asian counterparts, which have strengthened between 0.3% and 2.8%. The rupee is expected to trade within a range of 83.85 to 83.98 before the Federal Reserve’s policy announcement on Wednesday. The Reserve Bank of India’s actions to absorb inflows and the strong local dollar demand have helped to restrain the rupee’s appreciation.

As the Fed’s decision looms, will the rupee manage to break out of its narrow trading range, or will it continue to face pressure from domestic and international market forces? The next few days will be crucial in determining the rupee’s direction amidst the evolving economic landscape.

Stocks Highlights

NTPC Ltd. has been catching investor attention, with its share price moving up by 2.55%, taking the stock from Rs 401.40 to Rs 411.65. Over the past three years, NTPC has delivered a remarkable 250.41% return, significantly outperforming the Nifty 100’s 47.22%.

Additionally, NTPC has outpaced the BSE Power index, which provided a 165.22% return during the same period. This impressive performance indicates NTPC’s solid standing in the market, despite spending 6.75% of its operating revenues on interest expenses and 3.69% on employee costs for the fiscal year ending March 31, 2024.

In contrast, Bajaj Finance Ltd. has seen a decline, with its share price dropping by -3.38%, from Rs 7,598.50 to Rs 7,342.00. While its annual revenue growth of 32.79% beats its three-year CAGR of 26.95%, the stock’s three-year return stands at just 2.26%, a stark contrast to Nifty 100’s 47.22% gain.

Furthermore, Bajaj Finance underperformed compared to the Nifty Financial Services index, which posted a 29.86% return in the same period. The company’s operating expenses are another area of interest, with 34.06% allocated to interest and 11.64% to employee costs by the end of March 31, 2024.

Advance Decline Ratio

Today, the advance-decline ratio was 0.98, and the market breadth was negative. The volatility index India Vix decreased by 0.71 to settle at 12.46 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1374
Decliners – 1399
52Wk High – 200
52Wk Low – 29
High Band Hitters – 158
Low Band Hitters – 95
200d SMA – 22795
50d SMA – 24714
20d SMA – 25068

Top Gainers and Losers Stocks

The top gainers were NTPC (+2.55%), JSW Steel (+1.71%), Hindalco (+1.67%), Shriram Finance (+1.52%), and Larsen & Toubro (+1.24%).

The top losers were Bajaj Finance (-3.38%), Hindustan Unilever (-2.16%), Bajaj Finserv (-2.02%), SBI Life (-1.27%), and Britannia (-1.04%).

Top Gainers and Losers Sectors

The top gainers sector were Media (+0.99%), Metal (+0.61%), Realty (+0.57%), Consumer Durables (+0.51%), and Oil & Gas (+0.11%).

The top losers sector were FMCG (-0.72%), IT (-0.10%), and Pharma (-0.04%).

SECTORS – NOTABLE ACTION
MEDIA +0.99%
METAL +0.61%
REALTY +0.57%
FMCG -0.72%
IT -0.10%
PHARMA -0.04%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at -549.90), (AARTIIND close at +572.00), (BALRAMCHIN close at +568.75), (RBLBANK close at +214.92), (HINDCOPPER close at +322.95), (CHAMBLFERT close at +514.55), and (BANDHANBNK close at -205.28) 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, SAIL, GNFC, PNB, BIOCON, MANAPPURAM, NMDC, GMRINFRA, IDFCFIRSTB, BSOFT, CANBK, BANKBARODA, NATIONALUM, LICHSGFIN, TATACHEM, and IRCTC stocks has the possibilities of entrance in the ban list.

HINDCOPPER, CHAMBLFERT, and BANDHANBNK has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 25200 to 25500 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Nifty’s Silent Stance! Will the Rally Continue, or Is a Storm Brewing for Nifty?
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This article is only for educational purposes and is not an investment advice.