Nifty 50: Will bears hold, or will pressure persist from external and internal challenges?

At the close, the Nifty 50 was at 24,399.40 down by 0.15%

In a notable turn of events, the NSE Nifty 50 opened in the red, slipping 0.15% and closing at 24,399.40, below the crucial 24,400 mark. The Indian equity markets exhibited mixed signals in afternoon trading on Thursday, but the overall sentiment leaned towards negativity.

The day’s trading session ended with the Nifty50 down by 36.10 points, forming a small negative candle on the daily chart at new swing lows of 24,341. This candle pattern—while not a classical doji—indicates a potential reversal. Could this signal an imminent turnaround, or is the downward trend set to continue?

With the Nifty reaching a two-month low on October 24, falling for the third consecutive session, investor sentiment remained muted, driven by disappointing earnings reports. The Nifty traded within a 139-point range, with volumes dipping 17% from the previous session, indicating a lack of conviction among traders.

The Technical Landscape

A closer look at the technical indicators reveals a negative short-term trend for the Nifty, yet the current pattern hints at a possible upside bounce from these levels. The index has been in decline for four straight sessions and appears slightly oversold, raising questions about the potential for a rebound.

Despite these indicators, the broader market struggled, particularly the small-cap index, which experienced a sharper decline as retail investors continued to liquidate their holdings. As Asian markets mirrored Wall Street’s decline, European markets managed to rise, buoyed by unexpectedly positive corporate earnings despite disappointing macroeconomic indicators like PMI.

Market Sentiment and Future Outlook

With foreign institutional investors continuing their selling spree—pulling out ₹93,088 crore from Indian equities this month due to high valuations compared to other Asian markets—the market sentiment remains cautious. Analysts note a resistance level for the Nifty at 24,600, suggesting that overcoming this barrier could indicate a more bullish outlook.

What lies ahead for the Nifty? Will it find support in the 24,347-24,367 band, or will it continue to face downward pressure amid external and internal headwinds? The coming sessions will be crucial in determining the market’s trajectory, and investors are advised to stay vigilant as this drama unfolds!

Bank Nifty: Up by 0.57%

The Bank Nifty opened strong, showing a 0.57% gain and closing at 51,531.15, a bright spot in an otherwise murky market landscape. But not everything was rosy—the BSE Sensex struggled, down by 0.02% and settling at 80,065.16, casting shadows over investor confidence.

In the sectorial front, Pharma emerged as a surprising leader, rising by 0.44%. Among the top performers, Gland Pharma Ltd. led the charge with a 2.78% gain, closely followed by Lupin Ltd., which posted a 2.67% rise.

But while Pharma climbed, FMCG took a hard hit, emerging as the day’s biggest loser, dropping by 2.83%. The sharpest fall came from Hindustan Unilever Ltd., which tumbled by 5.81%, and Colgate Palmolive (India) Ltd., which lost 3.38%.

FII/FPI figures reveal a significant sell-off. While their Buy Value stands at Rs. 12,537.42 crore, the Sale Value has reached a notable Rs. 17,599.87 crore, resulting in a Net Value loss of Rs. 5,062.45 crore.

DII investors are showing resilience. With a Buy Value of Rs. 13,827.85 crore and a Sale Value of Rs. 10,207.38 crore, they have achieved a Net Value gain of Rs. 3,620.47 crore.

Bank Nifty

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

The gainers included Bank of Baroda with a 2.96% increase, IDFC First Bank with a 2.36% increase, Punjab National Bank with a 1.99% increase, State Bank of India with a 1.15% increase, and HDFC Bank with a 0.85% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 0.81% decline, Kotak Bank with a 0.16% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 24th October, 2024

Is the Rupee at a Standstill? The Fight Against Dollar Dominance

The Indian rupee remains stubbornly unchanged at 84.07 against the US dollar, clinging to its near-record low as turbulent market forces weigh heavily on its performance.

What’s fueling this stagnation? Rising crude oil prices and relentless foreign fund outflows are putting immense pressure on the local currency. Foreign investors are in a rush to capitalize on better gains from the Chinese market, leaving the rupee unable to mount a recovery. Compounding this issue, increasing US treasury yields have sparked fears of a slower pace in interest rate cuts by the Federal Reserve.

As we stand on the brink of uncertain geopolitical developments surrounding the upcoming US presidential election, investors are gravitating toward safe-haven assets. At the interbank foreign exchange market, the rupee opened slightly stronger at 84.06 against the greenback but quickly stalled, ultimately settling at the same level as the previous session, 84.07.

Interestingly, just a day prior, the rupee managed to close with a marginal gain of 1 paisa at 84.07, but since October 11, when it plummeted to its lowest level of 84.10, recovery has been elusive. The currency’s recent flat trading pattern aligns with a backdrop of weak domestic markets and rising crude oil prices.

What does the future hold for the rupee? Experts suggest a continued negative bias, driven by overall dollar strength and persistent foreign institutional investor (FII) outflows. Traders are advised to monitor upcoming data, including weekly unemployment claims, PMI figures, and new home sales from the US, as these could serve as critical indicators for market movement.

In the broader context, the dollar index, which measures the greenback’s strength against a basket of six currencies, dipped slightly by 0.21%, settling at 104.05, yet it remains at elevated levels. Meanwhile, Brent crude, the international benchmark, soared 2.03% to $76.43 per barrel in futures trade.

As the rupee struggles to regain its footing, one pressing question remains: Will it break free from these shackles, or is it destined to linger in this precarious position?

Stocks Highlights

UltraTech Cement Ltd.‘s share price surged by 2.66%, climbing from its previous close of Rs. 10,753.05 to a new high of Rs. 11,039.00.

But is this rise sustainable?
With a quarterly revenue decline of 13.05%, the company faces its lowest performance in the past three years. Despite this, UltraTech’s long-term resilience is evident, as it posted a 50.4% return over the last three years, outpacing Nifty 100’s 38.63% return.

However, there’s a twist. Intraday fluctuations reveal that only 1.46% of trading sessions in the last 19 years have seen intraday declines higher than 5%. Could this recent spike signal a volatile road ahead?

Hindustan Unilever Ltd.‘s stock took a significant hit, plummeting by 5.81%, dropping from Rs. 2,659.30 to Rs. 2,504.75.

What’s behind this fall?
Despite the company’s 8.36% three-year return, it significantly trails behind both the Nifty 100’s 38.63% and the Nifty FMCG index, which soared by 54.34% over the same period.

With less than 1% of its revenue spent on interest and 4.86% allocated to employee costs as of March 31, 2024, has Hindustan Unilever kept its operations too lean? Or is this decline a harbinger of more challenges ahead?

Advance Decline Ratio

Today, the advance-decline ratio was 0.55, and the market breadth was negative. The volatility index India Vix decreased by 4.46 to settle at 13.97 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 966
Decliners – 1771
52Wk High – 30
52Wk Low – 88
High Band Hitters – 81
Low Band Hitters – 101
200d SMA – 23363
50d SMA – 25127
20d SMA – 25093

Top Gainers and Losers Stocks

The top gainers were UltraTech Cement (+2.66%), Shriram Finance (+1.82%), M&M (+1.48%), Titan (+1.45%), and Grasim (+1.40%).

The top losers were Hindustan Unilever (-5.81%), SBI Life (-4.67%), Hindalco (-3.71%), Nestle India (-2.76%), and Bajaj Auto (-2.69%).

Top Gainers and Losers Sectors

The top gainers sector were Pharma (+0.44%), Financial Services (+0.43%), and Oil & Gas (+0.07%).

The top losers sector were FMCG (-2.83%), Realty (-1.13%), Auto (-0.52%), Consumer Durables (-0.39%), and Metal (-0.23%).

SECTORS – NOTABLE ACTION
PHARMA +0.44%
FINANCIAL SERVICES +0.43%
OIL & GAS +0.07%
FMCG -2.83%
REALTY -1.13%
AUTO -0.52%

Stocks Ban List

(SEBI) F&O ban list (INDIAMART close at +2494.40), (RBLBANK close at +165.92), (NMDC close at -215.85), (MANAPPURAM close at +148.20), (PEL close at +1052.25), (AARTIIND close at +504.85), (BANDHANBNK close at -180.66), (IEX close at +184.42), (BSOFT close at -569.05), and (GNFC close at +632.40) 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.

ABFRL, IDFCFIRSTB, GMRINFRA, SAIL, HINDCOPPER, EXIDEIND, CANBK, GRANULES, ESCORTS, BHEL, LICHSGFIN, PVRINOX, and NATIONALUM stocks has the possibilities of entrance in the ban list.

BSOFT, and GNFC stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 24200 to 24600 is the Nifty 50 trading range.

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Market Volatility: Nifty Struggles as Investors Contemplate Gloomy Sentiment. What Lies Ahead for Indian Markets?
Is the Nifty on the verge of a major downturn after breaking below the 20-week EMA? What are the potential consequences if it falls below 24,500?

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