Nifty 50 Stumbles Amid RBI Stance and Global Uncertainty: What Lies Ahead?

At the close, the Nifty 50 was at 24,117.00 down by 0.74%

On August 8, 2024, the NSE Nifty 50 began the day in the red, falling by 0.74% to close at 24,117. This drop came after the Indian equity indices struggled to hold onto previous session gains.

The Reserve Bank of India’s (RBI) decision to keep the key repo rate steady at 6.5%—the ninth consecutive hold—contributed to the market’s volatility. While the RBI’s move was anticipated, its continued “cancellation of lodging”. stance, amid high food inflation, set a cautious tone for investors.

The Nifty 50 experienced a seesaw of gains and losses throughout the day, ultimately closing near its lows. Sectors such as IT, metals, and energy were particularly hard hit, while broader indices posted only slight declines. The market’s struggle to sustain Wednesday’s recovery reflects underlying global uncertainties, including concerns over potential US economic slowdowns and the Federal Reserve’s response.

The RBI’s firm stance contrasts with easing trends among major global central banks, emphasizing a strategic focus on controlling inflation. This approach aims to balance economic resilience against inflationary pressures, given the volatile impact of food prices on India’s Consumer Price Index (CPI). Despite some market disappointment over unchanged rates, the outlook remains nuanced with potential for ongoing volatility.

As the global economic landscape evolves, will the Nifty 50 find stability within its current range, or are more turbulent days ahead? The interplay of domestic policies and international cues will be critical in shaping the market’s next moves.

Bank Nifty: Up by 0.08%

The Bank Nifty presented a modest rally, opening in red but ending in green with a gain of 0.08%, closing at 50,156.70. This subtle upward shift highlights a cautious rebound despite broader market trends. In contrast, the BSE Sensex faced a steeper decline, down by 0.73%, and ended in the red at 78,886.22.

In the sectorial front, the pharmaceutical sector emerged as the star performer, with a gain of 0.35%. Leading the charge was Alkem Laboratories Ltd., which surged by an impressive 3.46%, closely followed by Lupin Ltd., climbing 3.24%.

However, not all sectors shared in this success. The IT sector faced a tough day, losing 1.90% overall. LTIMindtree Ltd. suffered the most significant setback, dropping by a sharp 4.09%, while Mphasis Ltd. followed with a decline of 3.15%.

Foreign Institutional Investors FIIs recorded a significant net outflow of Rs. 2,626.73 crore. They bought securities worth Rs. 15,490.67 crore but sold off Rs. 18,117.40 crore, reflecting a cautious stance amid market volatility.

In contrast, DIIs showed a net inflow of Rs. 577.30 crore. Their buying activity totaled Rs. 11,738.64 crore, while sales amounted to Rs. 11,161.34 crore.

Bank Nifty

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

The gainers included HDFC Bank with a 1.03% increase, Federal Bank with a 0.67% increase, and IndusInd Bank with a 0.27% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 2.40% decline, Punjab National Bank with a 1.66% decline, Bank of Baroda with a 1.07% decline, AU Bank with a 0.75% decline, and ICICI Bank with a 0.66% decline. These results suggest that some of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 08th August, 2024

Indian Rupee Hits Record Low Amid Global Uncertainty

On August 8, the Indian rupee closed at a record low, settling at 83.9625 against the U.S. dollar, slightly down from 83.9550. This decline reflects ongoing global risk aversion and market volatility. Despite the rupee’s fall, state-run banks intervened, likely acting on behalf of the Reserve Bank of India (RBI), to limit further losses.

India’s benchmark equity indices, the BSE Sensex and Nifty 50, both closed lower by 0.7%, mirroring the weakness in global stock markets. Investors are reacting to deteriorating global risk sentiment, driven by unwinding carry trades funded by the Japanese yen and concerns over a potential economic slowdown in the U.S.

The dollar index edged up to 103.1, while most Asian currencies strengthened, with the Indonesian rupiah leading the gains with a 0.9% increase. However, the rupee diverged from this trend, constrained within a narrow range despite intermittent dollar sales by state-run banks.

Additionally, dollar-rupee forward premiums increased, supported by the RBI’s decision to maintain its ‘withdrawal of accommodation’ monetary policy stance. The 1-year implied yield rose by 4 basis points to 2.05%, reflecting market adjustments to the RBI’s policy.

As global uncertainties continue to weigh on market sentiment, will the rupee stabilize, or are more turbulent times ahead? The interplay between domestic policies and international factors will be key in determining the rupee’s trajectory.

Stocks Highlights

Tata Motors Ltd. shares saw a 1.63% uptick, closing at Rs. 1,042.00 from its previous Rs. 1,025.30. This gain is noteworthy, given that only 2.45% of trading sessions in the past 19 years have seen intraday gains above 5%.

The company also posted an impressive Return on Equity (ROE) of 36.97% for the fiscal year ending March 31, 2024, far surpassing its five-year average of -1.07%. However, despite this, the company faced a quarterly revenue dip of 9.74%, marking its lowest in three years.

Meanwhile, LTIMindtree Ltd. shares declined by 4.09%, closing at Rs. 5,339.80. Interestingly, a 20-day moving crossover appeared yesterday, often signaling a bullish trend. With an average price gain of 3.65% within seven days of this signal over the past five years, could this be the start of a rebound? Will LTIMindtree regain its footing, or will Tata Motors continue its upward trajectory?

Advance Decline Ratio

Today, the advance-decline ratio was 0.71, and the market breadth was negative. The volatility index India Vix increased by 2.67 to settle at 16.60 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1108
Decliners – 1569
52Wk High – 122
52Wk Low – 27
High Band Hitters – 115
Low Band Hitters – 57
200d SMA – 22085
50d SMA – 23935
20d SMA – 24541

Top Gainers and Losers Stocks

The top gainers were Tata Motors (+1.63%), HDFC Life (+1.57%), SBI Life (+1.22%), Cipla (+1.06%), and HDFC Bank (+1.03%).

The top losers were LTIM (-4.09%), Grasim (-3.60%), Asian Paint (-3.37%), Apollo Hospitals (-3.09%), and Infosys (-2.94%).

Top Gainers and Losers Sectors

The top gainers sector were Pharma (+0.35%), Media (+0.24%), and Financial Services (+0.15%).

The top losers sector were IT (-1.90%), Metal (-1.74%), Oil & Gas (-1.32%), Realty (-1.21%), and Consumer Durables (-0.83%).

SECTORS – NOTABLE ACTION
PHARMA +0.35%
MEDIA +0.24%
FINANCIAL SERVICES +0.15%
IT -1.90%
METAL -1.74%
OIL & GAS -1.32%

Stocks Ban List

(SEBI) F&O ban list (INDIACEM open at +368.00 and close at +368.10), (LICHSGFIN open at +323.25 and close at -316.00), (ABFRL open at +323.25 and close at -316.00), (MANAPPURAM open at -200.90 and close at -198.30), (INDIAMART open at +2750.00 and close at +2800.40), (HINDCOPPER open at +296.00 and close at -295.45), (BSOFT open at -577.80 and close at -571.45), (RBLBANK open at -215.15 and close at +215.14), (ABCAPITAL open at +209.81 and close at -210.59), and (GNFC open at +669.85 and close at -662.90) 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.

PNB, BANDHANBNK, EXIDEIND, IDFCFIRSTB, IEX, and BIOCON stocks has the possibilities of entrance in the ban list.

GNFC stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 23900 to 24350 is the Nifty 50 trading range.

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