Nifty Pulls Back from Peak Levels Due to Global Market Weakness

At the close, the Nifty 50 was at 22,957.10 down by 0.05%

The Nifty 50 commenced the trading session in the red, experiencing a marginal decline of 0.05% before closing with little change. Despite initially hitting fresh record highs, the index retreated from its peak levels amidst weak global cues, marking a day of volatility in the equity markets.

During the session, the Nifty 50 surged to an intraday record high of 23,026 before settling at 22,957, down by 11 points. The trading session witnessed fluctuations, reflected in the formation of a small bullish candlestick pattern with a long upper shadow, indicating selling pressure at higher levels. However, the index continued its upward trajectory, forming higher highs for the tenth consecutive session.

While the benchmark indices reached new milestones, they struggled to maintain higher levels throughout the session. Various sectors exhibited mixed trends, with auto, banking, and financial sectors performing strongly, while FMCG and realty sectors experienced profit-taking activities. Despite Thursday’s surge, the markets traded quietly and ended nearly unchanged, highlighting the cautious sentiment among traders amidst prevailing volatility.

The Nifty 50’s journey to record highs amidst volatility underscores the resilience of Indian equity markets. Traders should remain vigilant in navigating fluctuations and monitor sector-specific trends to capitalize on opportunities while managing risks effectively in the current market environment.

Bank Nifty: Up by 0.42%

The Bank Nifty commenced the trading session with a decline, opening in the red. However, it managed to reverse its trajectory, closing in the green with a gain of 0.42% at 48,971.65. Conversely, the BSE Sensex experienced a marginal dip of 0.01%, opening in the red and concluding the day at a low of 75,410.39.

In the sectoral area, the media sector has shown significant growth, appreciating by 1.04%. Leading the charge is Tips Industries Ltd., which surged by an impressive 3.12%. TV18 Broadcast Ltd. also contributed positively with a 2.05% increase.

Conversely, the Fast-Moving Consumer Goods (FMCG) sector experienced a downturn, declining by 0.80%. Within this sector, Radico Khaitan Ltd. saw a notable decrease of 2.46%, while ITC Ltd. dropped by 1.09%.

Foreign Institutional Investors (FII/FPI) recorded a buy value of Rs. 11,564.19 crore, while their sale value stood at Rs. 12,509.02 crore, resulting in a net value of -Rs. 944.83 crore.

Conversely, Domestic Institutional Investors (DII) exhibited robust activity, with a buy value of Rs. 13,475.70 crore and a sale value of Rs. 11,155.38 crore, leading to a net value of Rs. 2,320.32 crore.

Bank Nifty

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

The gainers included HDFC Bank with a 1.60% increase, Axis Bank with a 0.66% increase, IndusInd Bank with a 0.19% increase, and Federal Bank with a 0.12% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 1.54% decline, State Bank of India with a 0.49% decline, IDFC First Bank with a 0.45% decline, Kotak Bank with a 0.41% decline, and Punjab National Bank with a 0.36% decline. These results suggest that some of the banking stocks not performed better for the day.

Rupee Strengthens Against US Dollar Amidst RBI Intervention

The Indian rupee extended its upward trajectory for the fourth consecutive trading session, appreciating by 18 paise to settle at 83.11 (pro) against the US dollar. This surge was propelled by fresh foreign fund inflows and suspected intervention by the Reserve Bank of India (RBI), indicating market confidence in the domestic currency.

The rupee’s rally was further supported by the record dividend of Rs. 2.11 lakh crore transferred by the RBI to the government for the fiscal year ended March 31. This amount exceeded expectations, significantly bolstering government revenue and instilling optimism ahead of a new government assuming office.

Trading within a range of 83.03 to 83.26 against the greenback, the rupee settled at 83.11 (pro), marking a notable increase from its previous close. Over the past four trading sessions, the rupee has strengthened by 39 paise against the US dollar, reflecting consistent gains and positive market sentiment.

The rupee’s appreciation was also influenced by suspected RBI intervention and favorable global trends. The dollar index, measuring the dollar’s strength against a basket of currencies, declined by 0.22%, while Brent crude futures slipped to $80.79 per barrel, contributing to a conducive environment for the rupee’s strength.

Amidst evolving market dynamics and external factors, the Indian rupee’s recent rally underscores its resilience and attractiveness to investors. Continued monitoring of economic indicators and policy developments will be crucial in gauging the currency’s future trajectory and navigating currency markets effectively.

Stocks Highlights

HDFC Bank Ltd.’s stock price demonstrated a notable increase, rising by 1.60% to reach Rs 1,516.50 from its previous close of Rs 1,492.60. Notably, only 0.99% of trading sessions in the last 19 years have witnessed intraday gains surpassing 5%, emphasizing the significance of this uptrend. Furthermore, the bank’s loan book growth remains impressive, with a YoY increase of 54.39%, surpassing its 5-year Compound Annual Growth Rate (CAGR) of 19.71%. Additionally, its annual revenue growth of 99.35% outperformed its 3-year CAGR of 37.37%, indicating robust financial performance. Moreover, a recent buy signal was triggered by a 50-day moving average crossover, historically resulting in an average price gain of 3.93% within 30 days, further bolstering investor confidence in HDFC Bank Ltd.

Conversely, Adani Ports & Special Economic Zone Ltd. experienced a decrease in its share price, dropping by -1.83% to Rs 1,416.90 from its previous close of Rs 1,443.35. While the company announced a dividend of Rs 6.0 per share, indicating shareholder rewards, its expenditure remains a concern. Adani Ports allocated 10.65% of its operating revenues towards interest expenses and 7.1% towards employee costs in the fiscal year ending 31 Mar, 2024. Additionally, despite a commendable 3-year return of 88.29%, outperforming the Nifty 100’s return of 55.27%, the recent decline warrants careful observation by investors.

Advance Decline Ratio

Today, the advance-decline ratio was 0.65, and the market breadth was negative. The volatility index India Vix increased by 1.54 percent to settle at 21.71 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1020
Decliners – 1573
52Wk High – 129
52Wk Low – 17
High Band Hitters – 90
Low Band Hitters – 83
200d SMA – 20971
50d SMA – 22342
20d SMA – 22443

Top Gainers and Losers Stocks

The top gainers were HDFC Bank (+1.60%), Bharti Airtel (+1.12%), BPCL (+1.12%), Larsen & Toubro (+0.99%), and Ultratech Cement  (+0.66%).

The top losers were Adani Ports (-1.83%), Tech Mahindra (-1.42%), M&M (-1.26%), JSW Steel (-1.19%), and Titan (-1.19%).

Top Gainers and Losers Sectors

The top gainers sector were Media (+1.04%), Financial Services (+0.56%), Oil & Gas (+0.51%), and Auto (+0.18%).

The top losers sector were FMCG (-0.80%), Realty (-0.66%), IT (-0.64%), Pharma (-0.50%), and Metal (-0.31%).

SECTORS – NOTABLE ACTION
MEDIA +1.04%
FINANCIAL SERVICES +0.56%
OIL & GAS +0.51%
FMCG -0.80%
REALTY -0.66%
IT -0.64%

Stocks Ban List

(SEBI) F&O ban list (HINDCOPPER open at -375.00 and close at -371.60), (PEL open at +821.95 and close at +819.35), (PNB open at +126.65 and close at -126.45), (INDIACEM open at +210.00 and close at -208.90), (METROPOLIS open at -1940.00 and close at +1970.75), (BANDHANBNK open at +189.00 and close at -186.30), (NATIONALUM open at -191.65 and close at +193.15), (IEX open at +155.75 and close at +157.75), (BALRAMCHIN open at +377.10 and close at +388.45), (ZEEL open at -149.50 and close at +151.65), and (ABCAPITAL open at +227.40 and close at +228.55) 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.

IDFCFIRSTB, ABFRL, SAIL, JUBLFOOD, GMRINFRA, CANBK, BSOFT, GNFC, CHAMBLFERT, TATACHEM, and NMDC stocks has the possibilities of entrance in the ban list.

METROPOLIS, BANDHANBNK, NATIONALUM, IEX, BALRAMCHIN, ZEEL, and ABCAPITAL stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 22850 to 23100 is the Nifty 50 trading range.

Read previous -Daily Insights- here
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Domestic Equity Indices Overcome Weak Start to Surge Higher
Indian Indices Recover in Second Half Amid Sectoral Buying

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