Nifty Soars to New Heights – But at What Cost for Retail Traders?  Is the 26,000 Mark the Next Milestone?

At the close, the Nifty 50 was at 25,939.05 up by 0.57%

September 23, 2024. In a thrilling display of market resilience, NSE Nifty 50 kicked off the day in the green, climbing 0.57% to close at a historic 25,939.05. The record rally continues, with the index hitting fresh highs, crossing 25,950 amidst widespread buying across sectors—except for the beleaguered IT stocks.

The excitement didn’t stop there! The Nifty formed a bullish candle on the daily chart, marking its third consecutive day of gains. After an initial gap-up opening of 80 points, it soared to an all-time high of 25,956 before settling at 25,939.05, up by 148.10 points. All sectors advanced, with PSU Banks and Realty leading the charge.

As enthusiasm swelled, midcaps advanced 0.92% and small caps skyrocketed over 1%, outperforming the frontline index. However, caution is warranted—after two strong trading sessions, the Nifty appears to be nearing an overheated state. It’s moving steadily towards the 26,000 mark, but divergence in momentum indicators suggests a need for vigilance.

The bullish trend has been buoyed by the Fed’s rate cut, which continues to invigorate the domestic market. Benign input costs and anticipated shifts in the RBI’s stance amid global monetary easing provide further support for valuations. Despite some moderation in India’s PMI data, investors are optimistic about the wave of liquidity from foreign institutional investors stabilizing sentiment.

Yet, amid this euphoria lies a sobering statistic from the Securities and Exchange Board of India (SEBI): a staggering 93% of over 1 crore individual traders in the equity futures and options segment incurred losses, averaging around Rs 2 lakh each over the past three years. Only 1% managed to make profits exceeding Rs 1 lakh after transaction costs.

So, while the market celebrates its new highs, are retail traders paying the price for this rally? What does this mean for future investments?

Bank Nifty: Up by 0.58%

The Bank Nifty opened the trading session with a gain of 0.58%, ultimately closing at 54,105.80. This upward movement reflects a robust sentiment among investors, contributing to the overall optimism in the market. Similarly, the BSE Sensex also enjoyed a fruitful day, rising by 0.45% to close at an impressive 84,928.61.

In the sectorial front, the Realty sector climbed by a remarkable 2.23%, fueled by investor optimism. Leading the charge, Godrej Properties Ltd. saw an impressive 7.10% rise, a testament to the strong demand for real estate assets. DLF Ltd. also followed suit, recording a solid 3.58% gain.

But while real estate stocks soared, the Information Technology (IT) sector wasn’t as fortunate. IT emerged as the top loser of the day, dipping by 0.51%. Wipro Ltd. faced a challenging session, falling by 1.13%, while Coforge Ltd. saw a slight decline of 1.08%.

Foreign Institutional Investors (FII/FPI) recorded a buy value of Rs. 12,094.89 Cr. against a sale value of Rs. 11,690.47 Cr., resulting in a net buy value of Rs. 404.42 Cr..

Meanwhile, Domestic Institutional Investors (DII) showed strong confidence with a buy value of Rs. 11,666.36 Cr. and a sale value of Rs. 10,643.72 Cr., leading to a robust net buy value of Rs. 1,022.64 Cr..

Bank Nifty

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

The gainers included Bank of Baroda with a 3.67% increase, Punjab National Bank with a 2.84% increase, State Bank of India with a 2.42% increase, IDFC First Bank with a 1.66% increase, and Kotak Bank with a 1.66% increase.

On the other hand, the biggest losers in the sector included ICICI Bank with a 1.23% decline, and IndusInd Bank with a 1.01% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 23th September, 2024

Rupee Rallies, but Will the Surge Last?

The Indian rupee is making waves again! In early Monday trade, it rose by 6 paise to 83.46 against the US dollar, marking its third consecutive week of gains. What’s behind this rally?

It seems the domestic equity markets are thriving, buoyed by a massive inflow of foreign funds, pushing the rupee upwards. But that’s not the whole story.

Crude oil prices are creeping up, and the US dollar is gaining strength against major currencies. These factors are keeping the rupee’s rise in check.

At the interbank forex market, the rupee opened at 83.44, dropped slightly to 83.49, and then climbed to 83.46, gaining 6 paise over its previous close. Last Friday, it had gained 13 paise, settling at 83.52, continuing its recovery path since September 11, when it touched 83.99, not far from its August 5 low of 84.09.

But what’s driving this recovery? The US Federal Reserve’s decision to cut its benchmark interest rate by 0.50% seems to have provided a boost, along with positive remarks from the Fed Chair about the American economy.

Will the rupee keep up its winning streak, or will rising oil prices and a stronger dollar derail its momentum?

Stocks Highlights

Bajaj Auto Ltd. saw its share price surge by 3.66%, climbing from Rs 11,941.70 to Rs 12,378.55. This rise comes as the company takes on new debt for the first time in five years. Despite this new financial responsibility, Bajaj Auto’s performance remains impressive, particularly in terms of revenue growth.

The company’s annual revenue growth of 23.02% outpaced its 3-year CAGR of 16.68%, demonstrating strong operational efficiency. Even more impressive, the stock delivered a staggering 217.84% return over the last three years, significantly outperforming the Nifty 100, which yielded a 50.53% return during the same period. In terms of expenses, Bajaj Auto managed to keep interest expenses below 1% of its operating revenue, while employee costs were maintained at 3.63%.

On the flip side, Eicher Motors Ltd. had a more challenging day, with its share price dipping by 1.64%, moving from Rs 4,963.15 to Rs 4,882.00. However, the company’s return on equity (ROE) of 22.17% in FY24 was notably higher than its 5-year average of 17.54%, indicating a strong performance despite the stock’s decline.

Over the last three years, Eicher Motors has delivered a 74.58% return, lagging behind the Nifty Auto index, which gave a remarkable 156.64% return in the same period. In terms of expenses, the company managed its interest costs well, keeping them under 1%, but its employee expenses were higher, accounting for 7.47% of its operating revenue.

Advance Decline Ratio

Today, the advance-decline ratio was 1.62, and the market breadth was positive. The volatility index India Vix increased by 7.77 to settle at 13.79 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1723
Decliners – 1061
52Wk High – 176
52Wk Low – 38
High Band Hitters – 155
Low Band Hitters – 67
200d SMA – 22934
50d SMA – 24838
20d SMA – 25259

Top Gainers and Losers Stocks

The top gainers were Bajaj Auto (+3.66%), M&M (+3.26%), ONGC (+3.06%), Hero MotoCorp (+2.94%), and SBI Life (+2.66%).

The top losers were Eicher Motors (-1.64%), ICICI Bank (-1.23%), Divi’s Laboratories (-1.19%), Wipro (-1.13%), and IndusInd Bank (-1.01%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+2.23%), Oil & Gas (+1.89%), Auto (+1.56%), Consumer Durables (+1.18%), and Media (+0.72%).

The top losers sector were IT (-0.51%).

SECTORS – NOTABLE ACTION
REALTY +2.23%
OIL & GAS +1.89%
AUTO +1.56%
IT -0.51%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at +560.20), (OFSS close at +11430.90), (CHAMBLFERT close at +491.70), (BIOCON close at +370.35), (GNFC close at +60.80), (SAIL close at +129.68), (NATIONALUM close at -180.24), (PNB close at +111.51), (LICHSGFIN close at +680.75), (AARTIIND close at +574.95), and (RBLBANK close at +214.24) 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.

PEL, IDEA, IDFCFIRSTB, NMDC, ABFRL, CONCOR, HAL, DIXON, HINDCOPPER, TATACHEM, MANAPPURAM, BANDHANBNK, CANBK, IRCTC, BANKBARODA, and BALRAMCHIN stocks has the possibilities of entrance in the ban list.

AARTIIND, and RBLBANK has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 25700 to 26100 is the Nifty 50 trading range.

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