Nifty Closes in the Red ! What’s Going On with Nifty 50? Will Market Bounce Back or Stay in the Doldrums?

At the close, the Nifty 50 was at 24,340.85 down by 0.51%

On October 30, the NSE Nifty 50 opened the day in the red, starting down by 0.51%, and closed below the crucial 24,350 mark. After a brief two-day winning streak, the benchmark equity indices took a hit, settling lower as the market was influenced by mixed global cues.

Despite some recovery attempts, Nifty faced heavy pressure from banking and financial stocks, coupled with weak global trends. The index struggled to maintain momentum, dragged down by a cocktail of disappointing earnings and persistent foreign fund outflows, which negatively impacted investor sentiment.

Even though Nifty ended the day off its lows, it still closed in negative territory, down 126 points at 24,340.85. The market was engulfed in volatility, oscillating within a range of 24,300 to 24,500, and ultimately closed near the lower end of this range. Most sectors experienced declines, with banking, pharma, and IT leading the losses, while small-cap indices showed resilience with gains exceeding 1%.

A Closer Look at Resistance and Volatility: Nifty has struggled to breach the 24,500 resistance level for the last three sessions, with market heavyweights showing mixed trends. Analysts suggest that as long as Nifty remains confined within the 24,250 to 24,500 range, sentiment is likely to stay sideways. A decisive breakout from this range could give Nifty a new direction. Traders are advised to adopt a hedged approach and focus on selective stock picking, especially in banking and IT.

Concerns Over Valuations and Foreign Selling: Over the past month, both Sensex and Nifty indices have seen a drop of up to 6%, raising concerns among experts about high valuations. Meanwhile, the India VIX, a measure of market volatility, surged nearly 7%, hovering around the 15.5-mark, indicating heightened anxiety in the market. The domestic market remains cautious amid aggressive selling by Foreign Institutional Investors (FIIs), though strong domestic inflows are providing some support.

Looking Ahead: Global Influences at Play On the global front, stock indices have shown a mixed response. The Nasdaq recently achieved a record closing high as investors prepare for key earnings reports this week, while US Treasury yields reached multi-month highs ahead of the upcoming US presidential election.

With key economic data releases and election outcomes just around the corner, market participants are bracing for further volatility. The US Labor Department’s JOLTS survey indicated job openings of 7.44 million in September, falling short of estimates, adding to the market’s uncertainty.

As the Nifty battles resistance and external pressures, what strategy will you adopt? Will you buy on dips or sell on rallies? Keep your eyes on the market as it navigates these turbulent waters!

Bank Nifty: Down by 0.98%

Today marked a challenging session for the Bank Nifty, which opened in the red, down by 0.98%, and closed at 51,807.50. Meanwhile, the BSE Sensex followed suit, experiencing a decline of 0.53%, closing at a low of 79,942.18.

In the sectorial front, the Media sector has emerged as a surprising winner, surging by an impressive 2.34%. But what’s driving this sudden rise? Den Networks Ltd. is leading the charge with a staggering gain of 6.36%, while Tips Music Ltd. follows closely behind, boasting a 3.57% increase.

But just as we celebrate these gains, the Financial Services sector reveals a darker tale. It has been marked as the top loser, dropping by 1.32%. Here, the figures are alarming: Multi Commodity Exchange of India Ltd. has plummeted by a striking 6.24%, and REC Ltd. isn’t far behind, experiencing a loss of 2.60%.

FIIs recorded a buy value of ₹14,908.59 crore and a sale value of ₹19,522.24 crore, resulting in a net value of -₹4,613.65 crore, indicating they have been net sellers in the market.

DIIs showed a more positive outlook with a buy value of ₹13,594.06 crore and a sale value of ₹9,075.78 crore, achieving a net value of +₹4,518.28 crore.

Bank Nifty

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

The gainers included IndusInd Bank with a 1.72% increase, IDFC First Bank with a 1.67% increase, and Federal Bank with a 1.35% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 2.04% decline, Punjab National Bank with a 1.46% decline, ICICI Bank with a 1.42% decline, Kotak Bank with a 1.37% decline, and Bank of Baroda with a 1.30% decline. These results suggest that some of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 30th October, 2024

Stocks Highlights

Adani Enterprises Ltd. has made headlines today with a notable share price increase of 3.74%, rising from its previous close of Rs 2,848.60 to a last traded price of Rs 2,955.00. However, it’s not all smooth sailing; the company is grappling with a 28.87% contraction in Topline Sales, marking its first revenue decline in the last three years. But wait—there’s a silver lining! A bullish trend seems to be on the horizon, as a 5-day moving average crossover flashed a buy signal just yesterday. Historically, this signal has led to an average price gain of 4.69% within seven days over the last five years. In comparison to the Nifty 100, Adani has delivered impressive returns, boasting a three-year return of 100.1%, outpacing the Nifty’s 40.79%.

In stark contrast, Cipla Ltd. has taken a tumble, with its share price declining by 4.03% from a previous close of Rs 1,477.55 to a last traded price of Rs 1,418.00. Despite this downturn, the company’s Return on Equity (ROE) is performing above expectations, registering 15.43% for the year ending March 31, 2024, outshining its 5-year average of 11.98%. Furthermore, Cipla has outperformed its 3-year Revenue CAGR of 10.82% with an annual growth of 14.17%.

But caution is advised: a sell signal has emerged, with a 200-day moving average crossover appearing just yesterday, signaling that bears are on the prowl. Historically, this has resulted in an average price decline of 1.69% within the following 30 days over the last five years.

Advance Decline Ratio

Today, the advance-decline ratio was 3.01, and the market breadth was positive. The volatility index India Vix increased by 6.54 to settle at 15.47 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 2062
Decliners – 685
52Wk High – 56
52Wk Low – 22
High Band Hitters – 234
Low Band Hitters – 37
200d SMA – 23418
50d SMA – 25115
20d SMA – 24760

Top Gainers and Losers Stocks

The top gainers were Adani Enterprises (+3.74%), Hero MotoCorp (+3.18%), Tata Consumer (+3.04%), Britannia (+2.25%), and Maruti (+1.98%).

The top losers were Cipla (-4.03%), Shriram Finance (-2.35%), HDFC Life (-2.34%), Trent (-2.27%), and Infosys (-2.20%).

Top Gainers and Losers Sectors

The top gainers sector were Media (+2.34%), FMCG (+0.92%), Metal (+0.04%), and Auto (+0.02%).

The top losers sector were Financial Services (-1.32%), Consumer Durables (-1.17%), Pharma (-1.00%), IT (-0.86%), and Oil & Gas (-0.37%).

SECTORS – NOTABLE ACTION
MEDIA +2.34%
FMCG +0.92%
METAL +0.04%
FINANCIAL SERVICES -1.32%
CONSUMER DURABLES -1.17%
PHARMA –1.00%

Stocks Ban List

(SEBI) F&O ban list (IDFCFIRSTB close at +68.79), (INDIAMART close at -2550.00), (RBLBANK close at +175.61), (PNB close at -99.96), (LTF close at +146.49), and (MANAPPURAM close at +161.29) 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, CANBK, INDUSINDBK, SAIL, ABFRL, HINDCOPPER, GMRINFRA, GRANULES, BHEL, LICHSGFIN, IEX, ADANIENT, SBICARD, NATIONALUM, EXIDEIND, and BIOCON stocks has the possibilities of entrance in the ban list.

MANAPPURAM stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 24100 to 24600 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Bears Tighten Their Grip: What’s Next for the Nifty 50? Is the Index Heading for a Breakdown?
Nifty 50: Will bears hold, or will pressure persist from external and internal challenges?

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