Nifty 50 Surges as Global Weakness Sparks Buying—Is a Steady Rise on the Horizon?

At the close, the Nifty 50 was at 25,151.95 up by 0.40%

29 August 2024, The NSE Nifty 50 began the day with a cautious dip, but something remarkable happened. After opening with a red gap, the index rebounded with vigor, closing up by 0.40% at 25,151.95, breaking past the 25,100 mark and setting a fresh record high. For the twelfth consecutive session, the Nifty 50, driven by heavyweights like Reliance Industries, showed extraordinary resilience.

What fueled this surge? A mix of factors, from sector rotation into financial and IT stocks to savvy investors seizing opportunities amidst Nvidia’s cautious guidance. Reliance’s announcement of a potential bonus share issue on September 5 added even more momentum, making it a standout performer.

Despite initial market swings, the Nifty 50 held near its peak. The India VIX, reflecting market volatility, dropped by 1.16% to 13.79, favoring bullish sentiment. Momentum indicators like RSI and MACD remain strong, suggesting a continued upward trend.

Here’s the twist: The steady climb, without dramatic spikes, has kept large-cap valuations in check, paving the way for a sustainable rally. As IT stocks gain traction and the U.S. economy hints at a soft landing, investors are keenly watching.

So, as the Nifty 50 inches closer to 25,200, the big question is: Will this bull run keep roaring, or are we on the brink of a major shift?

Bank Nifty: Up by 0.02%

The Bank Nifty started the day on a cautious note, opening in the red. However, it managed to inch up by 0.02%, closing in green at 51,152.75. This slight uptick marks a positive shift despite the initial downturn. Similarly, the BSE Sensex demonstrated stronger performance, rising by 0.43% and ending the day at an impressive 82,134.61.

In the sectorial front, with Oil & Gas emerging as the top gainer, rising by 0.94%. Leading this charge, Gujarat State Petronet Ltd. surged by an impressive 6.09%, while Bharat Petroleum Corporation Ltd. followed with a 2.40% gain.

On the flip side, the Metals sector is struggling, recording a decline of 0.48%. Hindustan Zinc Ltd. bore the brunt of this downturn, losing 2.66%, while JSW Steel Ltd. saw a drop of 1.16%.

Foreign Institutional Investors (FII/FPI) are making waves with a buy value of Rs. 27,036.06 crore and a sale value of Rs. 23,776.50 crore, leaving a net value of Rs. 3,259.56 crore.

Domestic Institutional Investors (DII) aren’t far behind, with a buy value of Rs. 19,919.09 crore and a sale value of Rs. 17,228.24 crore, resulting in a net value of Rs. 2,690.85 crore.

Bank Nifty

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

The gainers included AU Bank with a 1.18% increase, Punjab National Bank with a 0.94% increase, State Bank of India with a 0.78% increase, Axis Bank with a 0.35% increase, and Federal Bank with a 0.22% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 1.24% decline, IDFC First Bank with a 1.08% decline, Kotak Bank with a 0.75% decline, ICICI Bank with a 0.09% decline, and IndusInd Bank with a 0.02% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 29th August, 2024

Rupee Strengthens Amidst Asian Currency Rally and MSCI Index Weightage

On Thursday, the Indian rupee edged up, closing at 83.8700 against the U.S. dollar, a slight 0.1% gain from the previous session. This rise aligns with gains in Asian currencies and expectations of MSCI-related inflows, as India’s increased weightage in the MSCI Emerging Market Index could attract around $3 billion in investments, boosting investor confidence.

Across Asia, currencies strengthened while the dollar index briefly dipped before rebounding. The anticipated inflows into Indian equities, starting Friday, have been a key factor behind the rupee’s recent resilience, supported by stronger regional currencies and robust domestic market activity.

However, traders remain cautious. While 83.70 acts as a support level for the USD/INR pair, resistance is seen at 84.00. The expected inflows might offer only short-term relief, with the rupee possibly facing renewed depreciation pressure in the coming weeks. The Reserve Bank of India (RBI) is likely to maintain a firm stance to stabilize the currency amid global uncertainties.

Market participants are now eyeing the release of the core Personal Consumption Expenditure (PCE) index data, a key U.S. inflation indicator, due after Indian market hours on Friday. The non-farm payroll data, set for release next Friday, could play a critical role in shaping U.S. rate cut decisions in September. Fed Chair Jerome Powell has signaled that any further cooling in the U.S. labor market could be a concern, even as the Fed prepares for potential rate cuts.

The rupee is showing strength now, but will upcoming U.S. economic data shift the tide?

Stocks Highlights

Tata Motors Ltd. has seen its share price climb by 3.57% from its previous close of Rs 1,074.55, with the latest trading price at Rs 1,112.90. This surge isn’t just a blip on the radar—it’s backed by the company’s strong financial performance. Tata Motors delivered an impressive Return on Equity (ROE) of 36.97% for the year ending March 31, 2024, significantly outperforming its 5-year average of -1.07%.

However, it’s not all rosy; the company reported a quarterly revenue decline of 9.74%, marking the lowest drop in the last three years. This mixed performance may have traders on edge, especially with a 14-day moving average crossover indicating a potential decline. Historically, such a signal has led to an average price drop of 3.2% within seven days. Could this be the start of a bearish trend for Tata Motors?

On the other hand, Grasim Industries Ltd. saw its share price dip by -1.50%, from Rs 2,715.55 to Rs 2,674.95. Despite this slight drop, the company has some promising signs on the horizon. A recent 5-day moving average crossover hints at a bullish trend, with an average price gain of 3.02% within seven days, based on historical data.

Furthermore, Grasim’s stock has outperformed the Nifty 100, delivering a 3-year return of 86.21% compared to the index’s 54.26%. Yet, the company also faced challenges, with a quarterly revenue decline of 10.47%, the steepest in the last three years.

Advance Decline Ratio

Today, the advance-decline ratio was 0.48, and the market breadth was negative. The volatility index India Vix decreased by 1.16 to settle at 13.79 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 869
Decliners – 1821
52Wk High – 115
52Wk Low – 22
High Band Hitters – 89
Low Band Hitters – 129
200d SMA – 22462
50d SMA – 24406
20d SMA – 24582

Top Gainers and Losers Stocks

The top gainers were Tata Motors (+3.57%), Bajaj Finserv (+2.61%), Britannia (+2.45%), Bajaj Finance (+2.42%), and BPCL (+2.40%).

The top losers were Grasim (-1.50%), M&M (-1.25%), JSW Steel (-1.16%), Eicher Motors (-0.89%), and Kotak Bank (-0.75%).

Top Gainers and Losers Sectors

The top gainers sector were Oil & Gas (+0.94%), FMCG (+0.72%), Auto (+0.54%), IT (+0.47%), and Financial Services (+0.26%).

The top losers sector were Metal (-0.48%), Pharma (-0.48%), Media (-0.31%), and Realty (-0.16%).

SECTORS – NOTABLE ACTION
OIL & GAS +0.94%
FMCG +0.72%
AUTO +0.54%
METAL -0.48%
PHARMA -0.48%
MEDIA -0.31%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at -703.85), (BANDHANBNK open at close at -193.93), (HINDCOPPER close at -328.60), and (INDIACEM close at -363.35) 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.

SAIL, ABFRL, PEL, IEX, BIOCON, IDFCFIRSTB, RBLBANK, LTF, MANAPPURAM, GMRINFRA, PNB, LICHSGFIN, IDEA, and GNFC stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 24900 to 25300 is the Nifty 50 trading range.

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