Nifty Tumbles Below 21,850 in Face of Widespread Selling Activity

At the close, the Nifty 50 was at 21,817.45 down by 1.08%

The NSE Nifty 50 commenced the day in negative territory, experiencing a downturn of 1.08% and closing below the crucial 22,000 mark. Despite a mild recovery in the previous session, bearish sentiments prevailed on March 19, intensifying throughout the day. The index broke below the 21,800 level intraday, driven by widespread selling across sectors. Ultimately, the Nifty concluded the session at 21,817.45, down by 238.25 points, or 1.08%.

The decline was attributed to selling pressure, notably led by TCS in the IT sector, which pushed the index below its immediate support of 21,900. Subsequent selling in other heavyweight stocks exacerbated the downward trend, with the Nifty closing significantly lower. Technical analysis indicates a breakdown from the rising wedge pattern on the daily chart, signaling a potential reversal of the uptrend. Moreover, breaching critical short-term moving averages and a bearish crossover in the Relative Strength Index (RSI) underscore weakening momentum and increasing selling pressure, respectively.

Global Factors Exacerbate Market Downturn The pessimistic mood in Asian markets following the Bank of Japan’s decision to hike interest rates for the first time in 17 years contributed to the continued negativity in the Indian market. Concerns over premium valuations, delayed rate cuts by the US Federal Reserve due to inflationary pressures, as evidenced by the uptrend in the dollar index, added to investor caution. Furthermore, the gradual uptick in crude oil prices further dampened market sentiment. Investors are eagerly awaiting signals from the upcoming US Fed meeting regarding the potential timing of a reversal in the rate cycle. Additionally, regulatory warnings against market froth from SEBI kept overall sentiment subdued.

Bank Nifty: Down by 0.41%

The Bank Nifty commenced the trading day in negative territory, experiencing a decline of 0.41 percent and concluding in the red zone at 46,384.80. Similarly, the BSE Sensex witnessed a downturn of 1.01 percent, closing at a low of 72,012.05, also in the red. This trend reflects the prevailing bearish sentiment in the market, with both major indices facing selling pressure throughout the trading session.

Today’s market landscape paints a picture of sectorial struggle with no clear winners emerging. The Information Technology (IT) sector notably faces a downturn, marking a significant loss of 2.90%. Within this sector, leading companies such as Tata Consultancy Services Ltd., L&T Technology Services Ltd., and Mphasis Ltd. have experienced notable declines. Tata Consultancy Services Ltd. witnesses a significant decrease of -4.37%, followed by L&T Technology Services Ltd. with a loss of -3.84%, and Mphasis Ltd. with a decline of -3.32%.

Foreign Institutional Investors (FIIs/FPIs) engaged in a buying spree on the trading day, with a buy value totaling Rs. 16,839.13 crore. However, they also sold stocks worth Rs. 15,417.65 crore, resulting in a net value of Rs. 1,421.48 crore. Conversely, Domestic Institutional Investors (DIIs) displayed a robust buying activity, with a buy value of Rs. 16,886.74 crore. On the selling side, they disposed of stocks valued at Rs. 9,437.26 crore, leading to a substantial net value of Rs. 7,449.48 crore.

Bank Nifty

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

The gainers included Kotak Bank with a 0.73% increase, HDFC Bank with a 0.27% increase, Federal Bank with a 0.10% increase, ICICI Bank with a 0.02% increase.. On the other hand, the biggest losers in the sector included IndusInd Bank with a 3.23% decline, Punjab National Bank with a 2.88% decline, Bank of Baroda with a 2.22% decline, AU Bank with a 1.94% decline, and IDFC First Bank with a 1.73% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Depreciates Against US Dollar Amidst Market Volatility

The rupee faced a decline of 12 paise against the US dollar, settling at 83.02 (pro) on Tuesday. This depreciation was spurred by a substantial selloff in domestic equities and continued foreign capital outflows. Additionally, the rupee’s value was influenced by a robust performance of the US dollar against major global currencies, further weighing down the local currency.

Starting at 82.94, the rupee experienced fluctuations throughout the day, reaching a low of 83.05 and a high of 82.93 before closing at 83.02 (pro), marking a 12 paise loss compared to its previous close. This trend follows a slight drop of 4 paise on Monday, settling at 82.90 against the US dollar.

The rupee’s recent downturn can be attributed to the significant strengthening of the dollar index, which surged by USD 0.70 to USD 103.70. This surge reflects evolving expectations regarding the US Federal Reserve’s interest rate policy. Market sentiment now suggests a potential delay in interest rate cuts until June or July, prompting a broad-based strengthening of the dollar and consequent weakening of other currencies, including the rupee.

Amidst these developments, the dollar index, measuring the greenback’s performance against a basket of six currencies, observed a 0.41% increase, trading at 103.66. This underscores the current challenges faced by the rupee amidst global market dynamics.

Stocks Highlights

Bajaj Auto Ltd.: Steady Growth and Promising Dividend Policy

Bajaj Auto Ltd. witnessed a 1.47% increase in its share price, closing at Rs 8,647.15, reflecting positive market sentiment. The company’s new dividend policy, tethered to its cash reserves, indicates potential for substantial dividend payouts in FY23 and beyond, promising a boon for investors. Moreover, Bajaj Auto stands out as a zero-debt entity for the past five years, offering financial stability and confidence to stakeholders. With minimal spending on interest and employee expenses, the company maintains efficient cost management, further bolstering investor confidence.

Additionally, a bullish signal emerged with a 14-day moving average crossover, historically resulting in an average price gain of 2.46% within seven days, signaling a favorable trajectory for the stock.

Tata Consultancy Services Ltd.: Challenges Amidst Market Fluctuations

Tata Consultancy Services Ltd. faced a notable decline of -4.37% in its share price, closing at Rs 3,971.00. Despite robust revenue growth outpacing its three-year compounded annual growth rate (CAGR), the stock witnessed a sell signal with a bearish trend predicted due to a five-day moving average crossover. Historical data indicates an average price decline of -1.92% within seven days following this signal, underscoring potential challenges ahead.

Moreover, while Tata Consultancy Services Ltd. boasts a commendable revenue growth rate, its stock returns lag behind Nifty 100, signaling comparative underperformance against broader market indices. Investors are advised to tread cautiously amidst these market dynamics, considering both the company’s strengths and the prevailing market trends.

Advance Decline Ratio

Today, the advance-decline ratio was 0.38, and the market breadth was negative. The volatility index India Vix increased by 1.56 percent to settle at 14.11 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 713
Decliners – 1857
52Wk High –  18
52Wk Low – 31
High Band Hitters – 106
Low Band Hitters – 124
200d SMA – 20294
50d SMA – 21923
20d SMA – 22195

Top Gainers and Losers Stocks

The top gainers were Bajaj Auto (+1.47%), Bajaj Finance (+1.25%), Eicher Motors (+0.82%), Kotak Bank (+0.73%), and HDFC Bank (+0.27%).

The top losers were TCS (-4.37%), BPCL (-4.15%), Cipla (-3.59%), Britannia (-3.33%), and IndusInd Bank (-3.23%).

Top Gainers and Losers Sector

The top losers sector were IT (-2.90%), Media (-2.45%), Pharma (-2.17%), FMCG (-2.16%), and Oil & Gas (-1.69%).

SECTORS – NOTABLE ACTION
IT -2.90%
MEDIA -2.45%
PHARMA -2.17%

Stocks Ban List

(SEBI) F&O ban list (BALRAMCHIN open at -357.25 and close at +363.25), (BIOCON open at -250.80 and close at -245.75), (HINDCOPPER open at -270.00 and close at -260.55), (PEL open at +818.95 and close at -815.90), (RBLBANK open at -224.30 and close at +228.05), (BHEL open at +224.25 and close at -218.80), (ZEEL open at +143.30 and close at -140.70), (SAIL open at +126.75 and close at -122.55), (NATIONALUM open at +139.55 and close at -137.10), (TATACHEM open at +1134.70 and close at -1120.90), (ABFRL open at +207.85 and close at -206.70), and (MANAPPURAM open at -165.70 and close at -166.35) 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.

PVRINOX, BANDHANBNK, NMDC, INDIACEM, GNFC, PNB, INDUSTOWER, CANBK, and IDEA stocks has the possibilities of entrance in the ban list.

BHEL, ZEEL, SAIL, NATIONALUM, TATACHEM, ABFRL, and MANAPPURAM stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21700 to 22000 is the Nifty 50 trading range.

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