Nifty Ascending Channel Bullish Trend with Corrective Phase

At the close, the Nifty 50 was at 22,332.65 down by 0.72%

The NSE Nifty 50 commenced the day with a brief surge before plummeting by 0.72% and concluding in the red, closing below 22,350. Monday marked the end of a two-day winning streak for Indian markets, as investors exercised caution ahead of the impending US inflation data release.

Despite initially hitting a fresh all-time high of 22,526.60, the market lost momentum swiftly amidst weak global cues, eventually succumbing to selling pressures across sectors. As Asian peers displayed muted cues, domestic benchmark indices, particularly the Nifty, remained subdued throughout the trading session.

Monday’s session witnessed sharp losses, as investors braced for pivotal CPI inflation data releases in both India and the US on Tuesday. On the technical front, Nifty’s lack of sustained buying interest post-breakout and the prevailing selling pressure at higher levels suggest an ongoing corrective phase within an overall bullish trend.

Global market sell-offs, fueled by uncertainty over potential rate cuts, contributed to subdued domestic sentiment. Additionally, the unexpectedly robust US nonfarm payroll data and apprehension surrounding tomorrow’s US inflation data release added to investor jitters.

Against this backdrop, the broader market struggled to perform, primarily due to valuation concerns, prompting investors to diversify portfolios with safe-haven assets like gold amidst the prevailing uncertainty. As market participants await further cues from economic indicators and global developments, caution prevails in the trading arena.

Bank Nifty: Down by 1.06%

The Bank Nifty commenced the trading session on a negative note, experiencing a decline of 1.06% before closing in the red at 47,327.85. Likewise, the BSE Sensex recorded a downturn of 0.83%, concluding at a low of 73,502.64.

Monday’s trading saw both indices struggling against prevailing market weaknesses, with selling pressures evident across the banking and broader stock sectors. Despite initial hopes for positive movements, the session ended with both benchmarks in negative territory.

In the sectorial front, the pharmaceutical sector has witnessed a notable increase, with a gain of 0.05%. Notably, Zydus Lifesciences Ltd. recorded a significant surge of 2.18%, while Cipla Ltd. also saw a respectable rise of 1.47%. Conversely, the media sector faced a downturn, experiencing a decline of 2.91%. Within this segment, D.B.Corp Ltd. recorded a substantial loss of -4.99%, while Dish TV India Ltd. also saw a notable decline of -4.71%.

Foreign Institutional Investors (FIIs/FPIs) exhibited a net buying activity, with a buy value of Rs. 23,691.23 crore and a sale value of Rs. 19,478.47 crore, resulting in a net value of Rs. 4,212.76 crore.

Conversely, Domestic Institutional Investors (DIIs) also demonstrated a net buying trend, with a buy value of Rs. 10,787.26 crore and a sale value of Rs. 7,548.87 crore, leading to a net value of Rs. 3,238.39 crore.

Bank Nifty

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

The gainers included AU Bank with a 2.41% increase. On the other hand, the biggest losers in the sector included State Bank of India with a 1.79% decline, IndusInd Bank with a 1.65% decline, Bandhan Bank with a 1.59% decline, Bank of Baroda with a 1.40% decline, and HDFC Bank with a 1.32% decline. These results suggest that most of the banking stocks not performed better for the day.

Rupee Weakens Against US Dollar Amidst Bearish Equities

The Indian rupee witnessed a marginal decline, shedding 8 paise to settle at 82.75 (pro) against the US dollar on Monday, in tandem with bearish equity markets. However, the currency found some support from the weakness in the US dollar and a decrease in crude oil prices.

Starting at 82.74, the rupee touched an intra-day low of 82.76 before closing at 82.75 (pro), marking a loss from its previous close. Despite this, Thursday saw a positive uptick for the rupee, gaining 16 paise to settle at 82.67 against the US dollar.

Meanwhile, the dollar index remained steady at 104.21, maintaining its strength against a basket of six currencies. Market analysts anticipate the rupee to face a slight negative bias amidst global risk aversion and concerns over potential Foreign Institutional Investor (FII) outflows. Factors such as any recovery in the US dollar and fluctuations in crude oil prices may further influence the rupee’s performance.

Traders are advised to exercise caution ahead of inflation data releases from India and the US. The USD-INR spot price is expected to fluctuate within the range of Rs. 82.50 to Rs. 83. Additionally, Brent crude futures saw a modest rise, reaching $82.27 per barrel.

Stocks Highlights

Nestle India Ltd. Shows Resilience Amidst Revenue Decline

Nestle India Ltd. exhibited a positive trajectory in its share price, rising by 1.92% to Rs 2,610.00 from its previous close of Rs 2,560.95. However, the company faced a quarterly revenue decline of 8.67%, marking its lowest performance in the past three years.

Despite the revenue setback, Nestle India Ltd. maintained a prudent financial approach. With less than 1% of operating revenues allocated towards interest expenses and 9.67% towards employee costs for the year ending 31 Dec, 2023, the company demonstrates efficient cost management strategies.

Bajaj Auto Ltd. Adapts Dividend Policy Amidst Share Price Dip

Bajaj Auto Ltd. experienced a decline of -2.53% in its share price, dropping to Rs 8,654.20 from its previous close of Rs 8,879.05. However, the company introduced a new dividend policy tied to cash reserves, potentially leading to increased dividend payouts for FY23 and beyond, given the current reserve levels.

Furthermore, Bajaj Auto Ltd. stands out for its zero debt burden over the last five years. With less than 1% of operating revenues directed towards interest expenses and 4.07% towards employee costs for the year ending 31 Mar, 2023, the company showcases strong financial stability and efficient resource allocation strategies.

Advance Decline Ratio

Today, the advance-decline ratio was 0.25, and the market breadth was negative. The volatility index India Vix increased by 2.80 percent to settle at 14.00 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 523
Decliners – 2082
52Wk High –  90
52Wk Low – 70
High Band Hitters – 68
Low Band Hitters – 262
200d SMA – 20187
50d SMA – 21871
20d SMA – 22169

Top Gainers and Losers Stocks

The top gainers were Apollo Hospitals (+2.66%), Nestle India (+1.92%), SBI Life (+1.56%), Cipla (+1.47%), and Dr. Reddy (+1.04%).

The top losers were Tata Consumer (-3.06%), Power Grid (-2.67%), Bajaj Auto (-2.53%), Tata Steel (-2.23%), and SBIN (-1.79%).

Top Gainers and Losers Sector

The top gainers sector were Pharma (+0.04%).

The top losers sector were Media (-2.91%), Metal (-1.44%), Realty (-1.09%), Oil & Gas (-1.06%), and Consumer Durables (-0.74%),.

SECTORS – NOTABLE ACTION
PHARMA +0.04%
MEDIA -2.91%
METAL -1.44%
REALTY -1.09%

Stocks Ban List

(SEBI) F&O ban list (TATACHEM open at +1220.00 and close at -1175.40), (SAIL open at +139.75 and close at -134.30), (MANAPPURAM open at -173.75 and close at -169.25), (MGL open at -1329.05 and close at -1275.95), and (ZEEL open at +161.10 and close at -156.05) 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.

HINDCOPPER, ABFRL, GNFC, PEL, RBLBANK, NATIONALUM, BHEL, BALRAMCHIN, and IDEA stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 22200 to 22500 is the Nifty 50 trading range.

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