Nifty Time Correction Despite Banking Underperformance

At the close, the Nifty 50 was at 19,694.00 down by 0.19%

The trading session today commenced with NSE Nifty 50 experiencing a modest 0.19 percent decline, ultimately closing in the red, marking the second consecutive day of losses. Amidst a blend of global cues, the Indian benchmark indices struggled, remaining rangebound throughout the day’s trading activities.

The prevailing market sentiment reflects the influence of persistent upward trends in long-term interest rates alongside a delicate global economic landscape. These factors have created a challenging environment, impacting investment inflows and shaping market dynamics. Nonetheless, recent favorable developments, including the decline in inflation rates in both the US and India, coupled with the downward trend in crude prices, offer a ray of hope for the short-term prospects of global equity and the Indian market.

Despite the positive momentum generated by these developments, challenges endure due to India’s elevated valuation in comparison to its global peers. Although Foreign Institutional Investors (FIIs) have reduced their selling, providing some relief to domestic markets, the prevalent consolidation emphasizes the cautious stance that investors continue to adopt.

Amidst this scenario, the Information Technology sector emerges as a beneficiary. However, prudence is advised due to its present higher valuation, signaling the necessity for a cautious approach in the medium term. As uncertainties persist, strategic decision-making in line with evolving market trends becomes pivotal for investors navigating this intricate landscape.

Bank Nifty: Up by 0.00%

The Bank Nifty starting in negative territory, maintaining a neutral position with a 0.00 percent change before closing positively at 43,584.95. Conversely, the BSE Sensex encountered a 0.21 percent decline, concluding at 65,655.15. Despite underwhelming performance in the banking sector, the Nifty continues to undergo a corrective phase, partly influenced by the subdued state of the US markets, limiting substantial market shifts.

Amid these fluctuations, maintaining an optimistic outlook on the index remains pivotal. Encouraging a strategy of “Buying during market declines,” we advocate continued investment, advising traders to focus on sectors exhibiting robust performance and gradually integrate high-quality stocks into their portfolios.

Sectorial insights reveal the IT sector’s commendable gains, marking a significant upsurge of 0.60%. L&T Technology Services Ltd. surged by 1.67%, and Wipro Ltd. experienced a notable rise of 1.20%. Conversely, the Auto sector witnessed a downturn, emerging as the top loser with a 0.76% decline. Balkrishna Industries Ltd. plummeted by -5.71%, while Mahindra & Mahindra Ltd. faced a -1.99% decline within this segment.

Foreign Institutional Investors/FPIs showcased higher sales than purchases, recording a sale value of Rs. 9,421.90 crore against a buy value of Rs. 8,776.18 crore, resulting in a net deficit of Rs. -645.72 crore, signifying a selling stance in this investor category.

Contrastingly, Domestic Institutional Investors/DIIs exhibited a positive trend, with higher buy values than sales. DIIs registered a net surplus of Rs. 77.77 crore, indicating a buying stance in recent market activities with a buy value of Rs. 6,446.83 crore against a sale value of Rs. 6,369.06 crore.

Bank Nifty

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

The gainers included Punjab National Bank with a 0.71% increase, AU Bank with a 0.63% increase, Kotak Bank with a 0.31% increase, IndusInd Bank with a 0.22% increase, and Bank of Baroda with a 0.18% increase. On the other hand, the biggest losers in the sector included Bandhan Bank with a 1.34% decline, IDFC First Bank with a 0.76% decline, Axis Bank with a 0.64% decline, Federal Bank with a 0.57% decline, and ICICI Bank with a 0.10% decline. These results suggest that some banking stocks performed better for the day.

Buzz

Rupee Hits Lifetime Low at 83.35 Against US Dollar Amidst Equity Downturn

On Monday, the Indian rupee experienced a significant decline, dropping by 9 paise to settle at 83.35 against the US dollar. This decline was in tandem with the negative trajectory witnessed in the domestic equities market, further amplifying the pressure on the local currency.

The rupee commenced trading at 83.25 at the interbank foreign exchange market and eventually settled at its all-time low of 83.35 against the dollar, marking a 9 paise decrease from its previous close. Notably, this fall in value brings attention to the rupee’s vulnerability in recent trading sessions.

Foreign fund outflows exerted additional downward pressure on the local unit, exacerbating its depreciation against the dollar. The previous week saw the rupee settling at 83.26 against the American currency, with its lowest point recorded on November 13 at 83.33, marking a continued downtrend for the rupee.

Concurrently, the dollar index, measuring the greenback’s strength against a basket of major currencies, observed a 0.42 percent decline, standing at 103.48, indicating a comparative weakness of the dollar against its counterparts.

Meanwhile, Brent crude futures, the global oil benchmark, displayed a 0.66 percent increase, reaching USD 81.14 per barrel. This rise in oil prices could potentially add further strain to India’s import bills, contributing to the challenges faced by the domestic economy amidst the rupee’s depreciation against the US dollar.

Buzzing

Divi’s Laboratories Ltd. witnessed a positive trajectory in its share price, experiencing a 1.99% increase from its previous close of Rs 3,600.85, reaching Rs 3,672.50 in the latest trading session. However, amidst this upward movement, the company faced a sales decline of 10.6%, marking its first revenue contraction in the past three years. Notably, the company’s expenditure structure reveals a minimal allocation, with less than 1% dedicated to interest expenses and 12.55% towards employee costs for the year ending on March 31, 2023.

In contrast, Adani Enterprises Ltd. observed a -2.62% drop in its share price, falling from the previous close of Rs 2,208.80 to Rs 2,151.00 in the most recent trading session. Despite this decline, the company showcased impressive annual revenue growth, boasting a remarkable 96.18% increase, surpassing its 3-year Compound Annual Growth Rate (CAGR) of 45.79%. Adani Enterprises allocated 2.9% of its operating revenues towards interest expenses and a mere 1.37% towards employee costs for the fiscal year ending on March 31, 2023.

Advance Decline Ratio

Today, the advance-decline ratio was 0.87, and the market breadth was negative. The volatility index India Vix increased by 2.70 percent to settle at 12.15 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1156
Decliners – 1326
52Wk High –  217
52Wk Low – 9
High Band Hitters – 147
Low Band Hitters – 65
200d SMA – 18718
50d SMA – 19591
20d SMA – 19341

Top Gainers and Losers Stocks

The top gainers were Divi’s Laboratories (+1.99%), Bharti Airtel (+1.74%), Wipro (+1.20%), HCL Technologies (+1.05%), and Coal India (+0.87%).

The top losers were Adani Enterprises (-2.62%), Bajaj Finance (-2.15%), M&M (-1.99%), SBI Life (-1.91%), and UltrTech Cement (-1.43%).

Top Gainers and Losers Sector

The top gainers sector were IT (+0.60%), and Pharma (+0.01%).

The top losers sector were Auto (-0.76%), Media (-0.60%), Metal (-0.48%), FMCG (-0.39%), and Realty (-0.25%).

SECTORS – NOTABLE ACTION
IT +0.60%
PHARMA +0.01%
AUTO -0.76%
MEDIA -0.60%
METAL -0.48%

Stocks Ban List

(SEBI) F&O ban list (RBLBANK open at -235.85 and close at -229.10), (HINDCOPPER open at -158.80 and close at -156.95), (INDIACEM open at -218.85 and close at +218.75), (MCX open at -2871.35 and close at +2878.65), (MANAPPURAM open at -155.30 and close at -154.30), (CHAMBLFERT open at -308.00 and close at -304.65), (ZEEL open at -247.35 and close at -243.60), and (DELTACORP open at -138.75 and close at -137.00) 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.

BHEL, IBULHSGFIN, NMDC, HINDPETRO, PNB, METROPOLIS, BIOCON, GNFC, NATIONALUM, and TATACHEM stocks has the possibilities of enterance in the ban list.

DELTACORP stock has the possibilities of exit from ban list.

Daily Pivots

As per the above pivots data, 19630 to 19770 is the Nifty 50 trading range.

Read previous -Daily Insights- here
RBI’s Latest Move Puts Pressure on Financials in India
Market Continues Gains Despite Late-Day Selling
Nifty Soars Over 19,600 in a Remarkable Comeback

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