Nifty Benchmark Slips Under Bears’ Grip with Hanging Man Pattern

At the close, the Nifty 50 was at 17,706.85 down by 0.68%

Nifty 50 index opened higher but eventually fell by 0.68 percent during the trading session, closing in the red. As of the market close, the Nifty 50 index was trading near 17710.

Indian shares broke their nine-day winning streak as Infosys plummeted by over 9%, triggering a sell-off in IT stocks. The weak quarterly results and forecast from the country’s second-largest services exporter caused the downward trend.

Infosys became the biggest setback for the Nifty when it predicted that revenue growth would hit a six-year low in fiscal 2024. The company cited US and European clients deferring spending as the reason for the low growth forecast.

The Nifty index was bearish as it continued to experience downward pressure after the formation of a hanging man pattern in the previous session. Additionally, the recent rally encountered resistance at the 50% retracement level of the previous decline, culminating in a bearish engulfing pattern at the close. In the short term, the trend is expected to remain sideways, as profit-taking is likely to occur among buyers at the 17000 level after a 900-point rally. On the downside, support is expected to be at 17550, and a breach of this level could lead to a further decline towards 17400. Conversely, 17800 is expected to provide resistance on the upside for the Nifty.

Bank Nifty: Up by 0.31%

The Bank Nifty index started the trading session on a positive note, opening higher and gaining 0.31 percent before closing in the green at 42,262.55. In contrast, the BSE Sensex, which consists of 30 stocks and is a benchmark index of the Bombay Stock Exchange, opened higher but eventually dropped by 0.86 percent during the day’s trading, leading to a close in the red at a low of 59,910.75.

Sectoral performance, the information technology index declined by 4.7%, while the pharma index fell by 0.6%. Conversely, the PSU Bank index increased by 3%. The oil & gas, realty, and FMCG indices all rose by 1%.

The information technology (IT) sector experienced a downturn, with the Nifty IT index declining by 8% in Monday’s intra-day trading session. This followed weaker-than-expected earnings reports from industry leaders Tata Consultancy Services (TCS) and Infosys for the January-March quarter (Q4FY23). As a result, shares of companies such as Infosys, Wipro, and Mphasis fell sharply by up to 15% in intra-day trading on the National Stock Exchange (NSE), with each hitting its respective 52-week low.

The shares of Infosys Ltd plummeted by almost 15% on Monday, exerting downward pressure on both its peers and the benchmark index. This was due to the company’s weak revenue outlook, which raised concerns about the demand for Indian IT services in light of global banking turmoil and recession fears. The outlook from Infosys followed a lackluster quarterly report from its larger competitor, Tata Consultancy Services, underscoring the concerns of the sector. Notably, over 25% of the industry’s revenue comes from the US and European banking, financial, services, and insurance sector.

Bank Nifty

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

The gainers included Band of Baroda with a 2.68% increase, Punjab National Bank with a 2.20% increase, State Bank of India with a 2.15% increase, IDFC First Bank with a 2.13% increase, and Federal Bank with a 1.99% increase. On the other hand, the biggest losers in the sector included HDFC Bank with a 1.62% decline, and Axis Bank with a 0.04% decline. These results suggest that some banking stocks performed better for the day.

Buzzing

On Monday, the Indian rupee depreciated by 25 paise to close at 82.10 (provisional) against the US dollar. This was attributed to the strength of the US dollar in global markets and a negative trend in domestic equities, which collectively dampened investor sentiments.

According to forex traders, the firm crude oil prices were another factor that contributed to the decline of the local unit. The domestic currency opened at 81.90 against the dollar at the interbank foreign exchange and closed the session at 82.10 (provisional), marking a decline of 25 paise from its previous close. Throughout the day, the rupee reached a high of 81.87 and a low of 82.10 against the greenback. In comparison, on Thursday, the rupee settled at 81.85 against the dollar.

Advance Decline Ratio

Today, the advance-decline ratio was 0.98, and the market breadth was negative. The volatility index India Vix increased by 3.21 percent to settle at 12.29 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1139
Decliners – 1158
52Wk High –  69
52Wk Low – 28
High Band Hitters – 69
Low Band Hitters – 65
200d SMA – 17558
50d SMA – 17509
20d SMA – 17298

Top Gainers and Losers Stocks

The top gainers were Nestle India (+3.90%), Power Grid (+2.16%), SBIN (+2.15%), Britannia (+1.98%), and Coal India (+1.66%).

The top losers were Infosys (-9.37%), Tech Mahindra (-5.18%), HCL Technologies (-2.76%), LT (-2.03%), and NTPC (-1.91%).

Top Gainers and Losers Sector

The top gainers sectors were FMCG (+1.03%), Realty (+0.99%), Oil & Gas (+0.95%), Auto (+0.60%), and Consumer Durables (+0.55%).

The top losers sectors were IT (-4.71%), Pharma (-0.60%), Media (-0.39%), and Financial Services (-0.14%).

The Nifty Midcap 50 was up by 0.25 percent, while the Nifty Small Cap 50 was up by 0.16 percent on the day.

The Nifty Midcap 50 index currently closed at 8,699.20, while the Nifty Small Cap 50 index currently closed at 4,276.70.

SECTORS – NOTABLE ACTION
FMCG +1.03%
REALTY +0.99%
OIL & GAS +0.95%
IT -4.71%
PHARMA -0.60%
MEDIA -0.39%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at 401.75 and close at 403.70) and (DELTACORP open at 190.25 and close at 191.35) is not currently on the stock exchange.

The Securities and Exchange Board of India (SEBI) has banned BALRAMCHIN and DELTACORP from trading in the futures and options (F&O) segment of 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.

IBULHSGFIN has the possiblities of enterance in the ban list.

Daily Pivots

As per the above pivots data, 17560 to 17870 is the Nifty 50 trading range.

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