Nifty Hits Record Highs as Fed’s Dovish Stance Boosts Investor Wealth by Rs 4 Lakh Crore

At the close, the Nifty 50 was at 21,182.70 up by 1.23%

The NSE Nifty 50 showcased a remarkable surge, initiating trade on a high note with a substantial 1.23% increase, closing above 21,150. This surge was primarily propelled by the unexpectedly dovish stance adopted by the US Federal Reserve, which triggered a global equity rally, significantly impacting Indian equity benchmarks on December 14. Most sectoral indices displayed positive closures, reflecting a bullish market sentiment.

The US Fed’s surprising indication of potential rate cuts as early as March 2024 contrasted market expectations, fostering an optimistic outlook. Speculation emerged that the Reserve Bank of India might follow suit shortly, enhancing positive sentiment within the market landscape.

The climb to unprecedented highs was further catalyzed by a notable decline in US bond yields, elevating investor confidence. India’s revised GDP forecast, coupled with a global reduction in oil prices and proactive measures by the RBI to manage inflation, fostered a widespread rally. Notably, the realty and IT sectors showcased exceptional outperformance during this rally.

The Fed’s decision to maintain rates, alongside the global surge in equity markets, particularly India’s record-breaking indices, received added impetus from declining crude prices and substantial foreign investments in domestic equities, further fortifying market sentiment.

With India’s consistent robust growth and the potential for forthcoming rate cuts in the upcoming year, a prevailing sense of optimism envelops equity markets, paving the way for sustained positivity in the medium term.

Bank Nifty: Up by 1.36%

The Bank Nifty commenced trading on a positive note, opening with an upward momentum and surging by 1.36% throughout the trading session, concluding at 47,732.30, firmly in the green zone. Simultaneously, the BSE Sensex also demonstrated substantial growth, marking an impressive rise of 1.34% and culminating at a robust high of 70,514.20, mirroring the bullish sentiment in the market.

In the sectorial front, the real estate sector has seen a notable surge, marking a significant uptick of 3.88% in recent market movements. Swan Energy Ltd. notably surged, boasting an impressive gain of 8.77%, positioning itself as a standout performer within this thriving sector. Likewise, Godrej Properties Ltd. showcased robust growth, securing a commendable uptrend of 6.27%. Conversely, the media sector experienced a slight downturn, registering a decrease of 0.38%. Within this segment, Zee Entertainment Enterprises Ltd. faced a decline of -2.30%, while D.B.Corp Ltd. observed a dip of -2.07%. This contrasting performance underlines the varied dynamics within the current market landscape.

The Foreign Institutional Investors/Foreign Portfolio Investors (FII/FPI) activity in the market showcased an evident bullish trend, with a notable Buy Value amounting to Rs. 21,080.40 crores and a Sale Value of Rs. 17,510.33 crores. The resulting Net Value stood at Rs. 3,570.07 crores, indicating a substantial positive inflow into the market from these entities.

Conversely, the Domestic Institutional Investors (DII) demonstrated a slightly more conservative approach with a Buy Value of Rs. 12,118.30 crores and a Sale Value of Rs. 11,565.13 crores. The Net Value for DIIs amounted to Rs. 553.17 crores, representing a modest but positive net investment in the market.

Bank Nifty

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

The gainers included AU Bank with a 3.46% increase, IndusInd Bank with a 2.99% increase, ICICI Bank with a 1.99% increase, Bandhan Bank with a 1.67% increase, and Kotak Bank with a 1.52% increase. On the other hand, the biggest losers in the sector included Bank of Baroda with a 0.38% decline. These results suggest that banking stocks performed better for the day.

Indian Rupee Shows Resilience Despite Dollar Demand

Amidst a backdrop of global market shifts, the Indian rupee exhibited strength, albeit slightly trailing its Asian counterparts post the US Federal Reserve’s accommodative stance on policy rates. Closing at 83.33 against the US dollar, the rupee marked a modest uptick of 0.08% from its previous session’s close at 83.40.

Initially opening stronger at 83.2725, the rupee’s ascent faced resistance owing to increased dollar demand from importers and oil companies. This demand curbed the local unit’s potential gains, leading to a somewhat tempered performance.

Analysts anticipated a more pronounced surge, but the rupee currently appears to be consolidating within a narrow range, oscillating between 83.25 and 83.40. Despite the restraint imposed by local dollar demand, optimistic market cues suggest a gradual upward trend, potentially pushing the rupee towards the 83.20 mark if the current supportive factors persist.

This resilience showcased by the rupee, amidst fluctuating demand dynamics, underscores its adaptability in navigating global monetary shifts. The coming sessions may witness a potential breakout from this consolidation, as market forces and external cues continue to influence the rupee’s trajectory. Investors and stakeholders keen on currency movements should closely monitor these evolving patterns for informed decision-making.

Stocks Highlights

Infosys Ltd. exhibited a notable upswing, with its share price surging by 3.93%, closing at Rs 1,506.00 from the previous Rs 1,449.00. However, a sell signal emerged due to a 20-day moving crossover, suggesting a historical average decline of -2.22% within seven days post this signal over the last five years. Despite this, Infosys showcased robust financials, surpassing its three-year Revenue CAGR with an annual revenue growth of 20.6%. Intraday data revealed minimal instances (0.74%) of trading sessions witnessing declines exceeding 5%. Additionally, the company allocated less than 1% of its operating revenues to interest expenses and 53.39% to employee costs in the year ending March 31, 2023.

Conversely, HDFC Life Insurance Company Ltd. observed a dip of -1.75%, closing at Rs 686.00 from its previous Rs 698.20. However, multiple buy signals emerged, indicating a potential bullish trend. Historical data showed an average gain of 2.62% within seven days post the 5-day moving crossover and 2.74% post the 10-day moving crossover over the last five years. Similarly, intraday analysis indicated minimal instances (0.67%) of sessions experiencing declines exceeding 5%. Notably, the company allocated less than 1% of its operating revenues to interest expenses and 4.37% to employee costs in the year ending March 31, 2023.

Advance Decline Ratio

Today, the advance-decline ratio was 1.23, and the market breadth was positive. The volatility index India Vix increased by 2.11 percent to settle at 12.32 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1371
Decliners – 1112
52Wk High –  249
52Wk Low – 6
High Band Hitters – 104
Low Band Hitters – 43
200d SMA – 18944
50d SMA – 19806
20d SMA – 20357

Top Gainers and Losers Stocks

The top gainers were Infosys (+3.93%), Tech Mahindra (+3.67%), LTIM (+3.54%), Wipro (+3.42%), and HCL Technologies (+3.24%).

The top losers were Power Grid (-1.90%), HDFC Life (-1.75%), Nestle India (-0.98%), Cipla (-0.95%), and JSW Steel (-0.63%).

Top Gainers and Losers Sector

The top gainers sector were Realty (+3.88%), IT (+3.50%), Oil & Gas (+1.39%), Financial Services (+1.37%), and Auto (+0.71%).

The top losers sector were Media (-0.38%), and Consumer Durables (-0.11%).

SECTORS – NOTABLE ACTION
REALTY +3.88%
IT +3.50%
OIL & GAS +1.39%
MEDIA -0.38%
CONSUMER DURABLES -0.11%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at -381.80 and close at +386.50), (HINDCOPPER open at +183.00 and close at +184.35), (ZEEL open at -286.95 and close at -277.90), (INDIACEM open at +272.00 and close at -271.40), (DELTACORP open at -138.45 and close at +137.90), (IBULHSGFIN open at +209.50 and close at +213.40), and (NATIONALUM open at +100.50 and close at +104.25) 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.

ASHOKLEY, MANAPPURAM, RBLBANK, GMRINFRA, CHAMBLFERT, ABCAPITAL, BIOCON, PEL, TATACHEM, CANFINHOME and GRANULES stocks has the possibilities of entrance in the ban list.

DELTACORP, IBULHSGFIN, and NATIONALUM has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21050 to 21250 is the Nifty 50 trading range.

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