Nifty Takes a Breather from Highs, Focus Shifts to Fed Meeting and US Inflation

At the close, the Nifty 50 was at 23,322.95 up by 0.25%

Indian stock markets experienced a thrill ride on Wednesday. The Nifty 50 index soared to a record high of 23,441.95 early in the trading session, only to relinquish those gains and close with a modest 0.25% increase at 23,323. This volatile pattern reflects a cautious investor sentiment, as market participants awaited crucial data releases.

Two key events loom large on the horizon: India’s May inflation data and the US Federal Reserve’s interest rate decision, both scheduled for later today. The Fed’s stance on potential rate cuts is of particular interest, as initial expectations of three cuts have been scaled back to potentially just two. This shift in sentiment could significantly impact global markets.

While some foreign investors are adopting a wait-and-see approach, domestic retail investors continue to be a driving force behind the rise of the broader market. This optimism likely stems from hopes for a budget that prioritizes economic growth, further fueled by the Reserve Bank of India’s (RBI) recent upward revisions to India’s GDP growth forecast.

In a nutshell, the Indian market is currently in a wait-and-see mode. Investors are keenly awaiting the outcome of these critical events, which will play a pivotal role in shaping the future trajectory of the economy.

Bank Nifty: Up by 0.38%

Indian stock markets witnessed positive movement on Wednesday, but caution prevailed as investors awaited key economic releases. The broader Nifty Bank index mirrored the Nifty 50’s trend, opening higher by 0.38% and settling comfortably in the green at 49,895.10. Similarly, the BSE Sensex, a gauge of the wider Indian stock market, edged up 0.20% to close at a new peak of 76,606.57.

In the realm of sectors, the media sector has seen notable growth, surging by 1.89%. Among the standout performers, Dish TV India Ltd. experienced a remarkable gain of 12.43%, reflecting strong investor confidence. Network18 Media & Investments Ltd. also contributed to the sector’s upward trajectory with a significant increase of 4.39%.

Conversely, the FMCG sector emerged as the top loser, experiencing a decline of 0.51%. Within this sector, Marico Ltd. recorded a substantial loss of 2.72%, signaling challenges in maintaining its market position. United Spirits Ltd. also faced a downturn, with its stock falling by 1.81%.

Foreign Institutional Investors (FIIs/FPIs) exhibited net buying activity with a buy value of Rs. 15,273.41 crore and a sale value of Rs. 14,846.78 crore, resulting in a net value of Rs. 426.63 crore.

Conversely, Domestic Institutional Investors (DIIs) also participated actively in the market, with a buy value of Rs. 13,651.65 crore and a sale value of Rs. 13,417.90 crore, culminating in a net value of Rs. 233.75 crore.

Bank Nifty

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

The gainers included Federal Bank with a 3.53% increase, Bank of Baroda with a 2.98% increase, Punjab National Bank with a 1.05% increase, State Bank of India with a 0.39% increase, and IDFC First Bank with a 0.34% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 0.83% decline, Bandhan Bank with a 0.73% decline, Axis Bank with a 0.72% decline, Kotak Bank with a 0.20% decline, and ICICI Bank with a 0.13% decline. These results suggest that some of the banking stocks performed better for the day.

Indian Rupee Sees Modest Gain Despite Global Headwinds

On Wednesday, the Indian rupee appreciated by 3 paise, closing at 83.56 against the US dollar, buoyed by positive domestic markets. The benchmark Nifty index reached a new all-time high, contributing to the rupee’s strength. Despite this appreciation, the local unit traded within a narrow range, reflecting cautious market sentiment ahead of key economic indicators.

The rupee’s movement was influenced by several factors. Globally, market participants were closely watching the US Consumer Price Index (CPI) data and the Federal Reserve’s upcoming interest rate decision. Domestically, India’s own CPI figures were in focus. Additionally, the strength of the US dollar in international markets and rising crude oil prices applied downward pressure on the rupee, limiting its gains.

At the interbank foreign exchange market, the rupee opened at 83.56. Throughout the trading session, it reached an intraday high of 83.51 and a low of 83.56, ultimately settling at 83.56, marking a slight improvement from its previous close. This performance contrasted with Tuesday’s session, where the rupee had depreciated by 9 paise to 83.59 against the dollar.

The dollar index, which measures the greenback’s strength against a basket of six currencies, traded slightly lower at 105.20, down by 0.03%. Expectations of a delay in the US Federal Reserve’s first interest rate cut contributed to the dollar’s firmness. Concurrently, Brent crude futures, the global oil benchmark, rose by 1.11% to $82.83 per barrel, adding to the complexity of the rupee’s trading environment.

The rupee’s modest appreciation was supported by robust domestic market performance, yet tempered by strong external pressures from the US dollar and crude oil prices. Investors remain watchful of upcoming economic data and policy decisions, which are expected to further influence currency movements.

Stocks Highlights

Coal India Ltd. witnessed a positive movement in its share price, rising by 2.78% to Rs 489.60 from its previous close of Rs 476.35. Notably, only 0.59% of trading sessions in the last 13 years saw intraday declines higher than 5%, indicating the stock’s stability. However, a recent sell signal emerged with a 14-day moving crossover, historically resulting in an average price decline of -2.89% within 7 days. Despite this, Coal India Ltd. outperformed Nifty 100, delivering a 3-year return of 204.57%.

In contrast, Mahindra & Mahindra Ltd. experienced a decline of -1.37% in its share price, trading at Rs 2,796.65 from its previous close of Rs 2,835.55. Despite this downturn, the company’s return on equity (ROE) of 17.02% for the year ending 31 Mar, 2024, outperformed its 5-year average of 11.97%. Additionally, Mahindra & Mahindra Ltd. demonstrated prudent expense management, allocating 5.38% of operating revenues towards interest expenses and 7.64% towards employee costs.

Advance Decline Ratio

Today, the advance-decline ratio was 2.04, and the market breadth was positive. The volatility index India Vix decreased by 2.55 to settle at 14.39 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1758
Decliners – 861
52Wk High – 168
52Wk Low – 10
High Band Hitters – 176
Low Band Hitters – 29
200d SMA – 21190
50d SMA – 22542
20d SMA – 22770

Top Gainers and Losers Stocks

The top gainers were Coal India (+2.78%), Power Grid (+2.43%), Eicher Motors (+1.81%), SBI Life (+1.74%), and Tech Mahindra (+1.65%).

The top losers were M&M (-1.37%), Britannia (-1.26%), Hindustan Unilever (-0.97%), Tata Consumer (-0.91%), and Titan (-0.75%).

Top Gainers and Losers Sectors

The top gainers sector were Media (+1.89%), Oil & Gas (+0.83%), Metal (+0.50%), Financial Services (+0.48%), and Consumer Durables (+0.43%).

The top losers sector were FMCG (-0.51%), Auto (-0.05%), and Realty (-0.04%).

SECTORS – NOTABLE ACTION
MEDIA +1.89%
OIL & GAS +0.83%
METAL +0.50%
FMCG -0.51%
AUTO -0.05%
REALTY -0.04%

Stocks Ban List

(SEBI) F&O ban list (HINDCOPPER open at -329.50 and close at +335.40), (GMRINFRA open at +92.25 and close at -90.13), (INDIACEM open at -217.19 and close at +219.56), (BALRAMCHIN open at +409.10 and close at +419.55), (SAIL open at +151.30 and close at -151.01), and (ZEEL open at +165.80 and close at +166.80) 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, PNB, and PEL stocks has the possibilities of entrance in the ban list.

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

Daily Pivots

As per the above pivots data, 23150 to 23600 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Time to Accept Crypto? Why More and More Businesses Are Taking Bitcoin and Other Cryptocurrencies
NSE Nifty 50 Edges Closer to All-Time High Amid Flat-to-Positive Trading
Nifty’s Winning Streak Cut Short by Market Volatility After Ministerial Reshuffle

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