Nifty 50’s Thirteen Days of Dominance Continue.. or Is a Twist Ahead?

At the close, the Nifty 50 was at 25,278.70 up by 0.17%

On September 2, the NSE Nifty 50 continued its impressive ascent, kicking off the day on a high and closing stronger, marking its 13th straight session in the green. Starting the day at a record high of 25,333.60, the index settled at 25,278.70, up by 42.80 points, or 0.17%. This persistent upward movement underscores the market’s strength, driven by stellar performances in the banking, FMCG, and IT sectors.

Yet, despite the new record close, the Nifty 50 grappled with breaking past the morning’s peak. The day’s rise was accompanied by heavy call writing at the 25,300 strike, suggesting traders might be bracing for a potential pullback. This activity hints that while the Nifty 50 is still riding high, the immediate trend could turn sideways or negative if it fails to surge past 25,300.

Volatility crept up slightly, with the India VIX rising by 4.98% to 14.06 from 13.39. As long as the VIX stays below 15, the market might maintain its bullish mood. The recent rally has been fueled by foreign fund inflows and positive U.S. economic data, pushing Indian equity indices to unprecedented heights.

The Nifty 50’s recent chart shows a series of higher highs and positive momentum indicators like the RSI and MACD. However, the heavy call writing and the index’s struggle to hold its opening high suggest the near-term outlook might shift to a sideways or corrective phase. The lower end of this correction could hover around 25,000, where significant put writing has been noted.

As the market dances with these shifting dynamics, the burning question is: Will the Nifty 50 smash through its latest resistance and extend its historic run, or is a consolidation phase looming just around the corner?

Bank Nifty: Up by 0.17%

The Bank Nifty opened the day on a high note, up by 0.17%, and continued its ascent to close at 51,439.55. This upward movement underscores the strength in the banking sector, contributing positively to the overall market rally. Similarly, the BSE Sensex also showed strong performance, increasing by 0.24% to reach a new closing high of 82,559.84.

In the sectorial front, the FMCG sector managed to edge higher, posting a gain of 0.82%. Within this sector, Radico Khaitan Ltd. stood out with an impressive surge of 3.50%, signaling strong investor confidence. Varun Beverages Ltd. also contributed to the sector’s strength, recording a 1.86% increase.

On the flip side, the Metal sector faced headwinds, emerging as the day’s top loser with a decline of 1.04%. Jindal Stainless Ltd. led the downward slide, suffering a significant loss of 6.74%, reflecting concerns over the sector’s near-term outlook. Hindustan Copper Ltd. also struggled, with its shares dropping by 3.53%.

Foreign Institutional Investors (FIIs) demonstrated a net positive inflow, buying shares worth Rs. 13,772.63 crore while selling Rs. 12,037.17 crore, resulting in a net purchase value of Rs. 1,735.46 crore.

On the domestic front, Domestic Institutional Investors (DIIs) also showed a positive net inflow. They bought shares worth Rs. 12,538.52 crore and sold Rs. 12,182.15 crore, leading to a net investment of Rs. 356.37 crore.

Bank Nifty

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

The gainers included IndusInd Bank with a 1.70% increase, IDFC First Bank with a 1.56% increase, Bank of Baroda with a 1.46% increase, Axis Bank with a 1.17% increase, and State Bank of India with a 0.77% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 1.29% decline, HDFC Bank with a 0.67% decline, Punjab National Bank with a 0.15% decline, ICICI Bank with a 0.01% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 2nd September, 2024

Rupee Faces Pressure Amid Regional Weakness: What’s Next?

The Indian rupee started the week on a weak note, mirroring a broader decline in major Asian currencies. On Monday, the rupee slipped to 83.9175 against the US dollar, slightly below its previous close of 83.8625. This dip is in line with other Asian currencies, which fell between 0.2% and 0.7%, as global investors closely monitor economic indicators that could influence the Federal Reserve’s next policy move.

The dollar index, measuring the greenback’s strength against six major currencies, remained marginally lower at 101.65. Despite the rupee’s slide, expectations of the Reserve Bank of India (RBI) stepping in around the 84 mark have helped prevent further losses. The RBI has a track record of intervening to curb excessive volatility, often selling dollars from its reserves to support the rupee when it nears record lows.

Now, the focus shifts to the upcoming US jobs report, a critical indicator of the labor market’s health in the world’s largest economy. The non-farm payrolls data, due on Friday, could be a key factor in the rupee’s future direction. Fed Chair Jerome Powell recently noted that the slowdown in the US labor market is “unmistakable,” adding even more significance to this report. Currently, investors see less than a 30% chance of a 50 basis point rate cut by the Fed at its September 17-18 meeting.

With the rupee hovering near critical levels, the big question is: Will the RBI’s intervention be enough to stabilize the currency, or will global factors push it further down?

Stocks Highlights

Bajaj Finserv Ltd. is making waves with a 3.31% jump in its share price, closing at Rs 1,842.00. This isn’t just a fluke; it reflects the company’s solid growth. With annual revenue up by 34.5%, Bajaj Finserv is cruising past its 3-year CAGR of 21.89%.

Yet, while the stock has offered a decent 10.09% return over the last three years, it lags behind the Nifty 100’s impressive 54.68% return. The company’s careful financial management shows 16.67% of operating revenue going to interest expenses and 9.39% to employee costs as of March 31, 2024.

On the flip side, Hindalco Industries Ltd. is facing tougher times. Its share price slipped by 2.55%, closing at Rs 683.50. The company saw a 3.12% drop in sales, marking its first revenue decline in three years.

Even so, Hindalco managed to outpace the Nifty 100 with a 60.16% return over three years. But when stacked against the Nifty Metal index’s 70.59% return, it falls a bit short. Hindalco has kept a tight grip on costs, allocating just 1.79% of operating revenues to interest expenses and 6.84% to employee costs.

Advance Decline Ratio

Today, the advance-decline ratio was 0.67, and the market breadth was negative. The volatility index India Vix increased by 4.98 to settle at 14.06 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1104
Decliners – 1652
52Wk High – 183
52Wk Low – 22
High Band Hitters – 123
Low Band Hitters – 90
200d SMA – 22521
50d SMA – 24475
20d SMA – 24621

Top Gainers and Losers Stocks

The top gainers were Bajaj Finserv (+3.31%), Bajaj Finance (+3.05%), HCL Technologies (+2.67%), Hero MotoCorp (+2.19%), and SBI Life (+2.01%).

The top losers were Hindalco (-2.55%), Dr. Reddy (-2.32%), Tata Motors (-1.65%), NTPC (-1.45%), and ONGC (-1.35%).

Top Gainers and Losers Sectors

The top gainers sector were FMCG (+0.82%), IT (+0.44%), Financial Services (+0.38%), and Oil & Gas (+0.22%).

The top losers sector were Metal (-1.04%), Pharma (-0.99%), Media (-0.47%), Auto (-0.39%), and Consumer Durables (-0.33%).

SECTORS – NOTABLE ACTION
FMCG +0.82%
IT +0.44%
FINANCIAL SERVICES +0.38%
METAL -1.04%
PHARMA -0.99%
MEDIA -0.47%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN close at -591.85) 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.

BANDHANBNK, HINDCOPPER, and ABFRL stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 25150 to 25400 is the Nifty 50 trading range.

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