Nifty Recovers After Intraday Pullback, U.S. Rate Cut Talk Buoys Market

At the close, the Nifty 50 was at 23,398.90 up by 0.33%

The NSE Nifty 50 commenced trading on a positive note, marking a 0.33% increase and closing near 23,400, close to its all-time high. Despite the initial upward momentum, the index remained largely flat for four consecutive days, signaling a temporary pause before a potential significant move.

Potential Directional Breakout A decisive breach above the 23,500 mark could trigger a covering of call writing, potentially propelling the index towards 23,800. On June 13, the Nifty50 reached a new peak at 23,481.05, propelled by favorable global and domestic data points. Although it retreated from this high, it managed to close in positive territory.

Global Factors Influence Markets The market’s behavior was influenced by global trends, particularly driven by a favorable US inflation report. However, despite hitting record highs, benchmark indices experienced subdued trading later in the session.

Mixed Effects of Inflation Data Both US and Indian CPI data indicated a gradual decline in inflation rates, leading to mixed market expectations. The anticipation of two rate cuts in CY24 was revised to one, impacting global markets differently.

Sectoral Performance and Fed’s Decision In the domestic market, sectors like realty and consumer durables flourished, supported by government initiatives to revive affordable housing. The US Federal Reserve’s decision to maintain the policy rate aligned with industry expectations, postponing the possibility of multiple rate cuts until next year, contingent upon inflation trends meeting expectations.

Bank Nifty: Down by 0.10%

Despite opening in the green, the Bank Nifty experienced a slight decline of 0.10%, closing in the red at 49,846.70. Conversely, the BSE Sensex showed resilience, recording a 0.27% increase and closing positively at a high of 76,810.90.

In the sectorial front, the realty sector experienced notable growth, surging by 2.24%. Among the top performers, Sobha Ltd. led with a remarkable gain of 4.97%, demonstrating strong investor confidence and robust market performance. Similarly, Macrotech Developers Ltd. recorded a substantial increase of 4.78%, contributing to the overall upward trend in real estate.

In contrast, the media sector faced a downturn, emerging as the top loser with a decline of 1.09%. Within this sector, Tips Industries Ltd. saw a significant drop of 2.58%, indicating challenges in maintaining its market position. Additionally, Sun TV Network Ltd. experienced a decrease of 2.41%, reflecting broader difficulties within the media landscape.

Foreign Institutional Investors (FII/FPI) engaged in buying equities valued at Rs. 19,191.08 crore while selling equities worth Rs. 22,224.08 crore, resulting in a net value of -Rs. 3,033.00 crore.

Similarly, Domestic Institutional Investors (DII) purchased equities valued at Rs. 12,374.17 crore and sold equities worth Rs. 12,928.05 crore, leading to a net value of -Rs. 553.88 crore.

Bank Nifty

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

The gainers included IndusInd Bank with a 1.43% increase, State Bank of India with a 0.70% increase, Kotak Bank with a 0.54% increase, HDFC Bank with a 0.45% increase, and AU Bank with a 0.25% increase.

On the other hand, the biggest losers in the sector included Bandhan Bank with a 1.32% decline, Axis Bank with a 1.04% decline, ICICI Bank with a 0.83% decline, Federal Bank with a 0.67% decline, and Punjab National Bank with a 0.61% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Holds Steady Despite Global Wobbles

The rupee fell by 7 paise to close at 83.55 against the US dollar, showing resilience despite volatility in the dollar index due to the latest CPI data and the US Federal Reserve’s policy decisions. At the interbank foreign exchange, the rupee opened at 83.52 and settled at 83.55. This drop followed an 11 paise appreciation on Wednesday when the rupee closed at 83.48 against the US dollar.

The rupee traded within a narrow range of 83.52-83.57, demonstrating stability despite fluctuations in the dollar index. The market’s current trend suggests that the rupee will remain range-bound, with an underlying weak tone as it consolidates near its all-time low. A significant decline in the dollar, falling below $103, would be necessary to trigger strong rupee buying above the 83.00 mark. Until then, the rupee is expected to trade within the range of 83.20-83.75.

Simultaneously, the dollar index, which measures the greenback’s strength against a basket of six major currencies, was trading at 104.81, up by 0.17%. In global markets, Brent crude futures, the benchmark for oil prices, declined by 0.84% to $81.91 per barrel.

Stocks Highlights

Shriram Finance Ltd. witnessed a notable share price increase of 4.92%, moving from its previous close of Rs 2,566.95 to a last traded price of Rs 2,693.25. Intraday analysis reveals that in the past 19 years, only 3.4% of trading sessions saw intraday gains exceeding 5%, underscoring the significance of this movement.

In terms of financial allocation, Shriram Finance Ltd. spent 42.67% of its operating revenues on interest expenses and 9.54% on employee costs for the year ending March 31, 2024. Over the past three years, the stock has provided a return of 78.63%, outperforming the Nifty 100’s return of 52.57%. Additionally, it outpaced the Nifty Financial Services, which returned 34.6% over the same period.

Conversely, Hindustan Unilever Ltd. experienced a decrease of 1.57% in its share price, dropping from Rs 2,528.70 to Rs 2,489.00. Intraday declines greater than 5% occurred in only 0.66% of trading sessions over the past 19 years.

The company’s financial structure shows it spent less than 1% of its operating revenues on interest expenses and 4.86% on employee costs for the year ending March 31, 2024. A bearish trend has been signaled with a 5-day moving crossover, typically leading to an average price decline of 1.8% within seven days. Over the past three years, Hindustan Unilever Ltd. delivered a return of 7.33%, significantly lagging behind the Nifty 100’s 52.57% return.

Advance Decline Ratio

Today, the advance-decline ratio was 1.53, and the market breadth was positive. The volatility index India Vix decreased by 6.25 to settle at 13.49 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1594
Decliners – 1041
52Wk High – 190
52Wk Low – 9
High Band Hitters – 160
Low Band Hitters – 33
200d SMA – 21210
50d SMA – 22563
20d SMA – 22830

Top Gainers and Losers Stocks

The top gainers were Shriram Finance (+4.92%), M&M (+3.21%), HDFC Life (+3.20%), Divi’s Laboratories (+3.16%), and Titan (+2.68%).

The top losers were Hindustan Unilever (-1.57%), Eicher Motors (-1.06%), Axis Bank (-1.04%), Power Grid (-1.03%), and Britannia (-1.03%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+2.24%), Consumer Durables (+1.73%), IT (+1.03%), Auto (+0.70%), and Oil & Gas (+0.69%).

The top losers sector were Media (-1.09%), and FMCG (-0.66%).

SECTORS – NOTABLE ACTION
REALTY +2.24%
CONSUMER DURABLES +1.73%
IT +1.03%
MEDIA -1.09%
FMCG-0.66%

Stocks Ban List

(SEBI) F&O ban list (HINDCOPPER open at +337.00 and close at +335.90), (INDIACEM open at +220.90 and close at -218.73), (GMRINFRA open at -91.30 and close at +91.73), (SAIL open at +151.80 and close at -149.63), and (BALRAMCHIN open at +426.00 and close at +439.15) 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.

SUNTV, BANDHANBNK, PEL, PNB, IEX, LICHSGFIN, and GNFC stocks has the possibilities of entrance in the ban list.

BALRAMCHIN stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 23250 to 23600 is the Nifty 50 trading range.

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