Nifty’s Bearish Signal Market Sentiment Wavers

At the close, the Nifty 50 was at 22,023.35 down by 0.56%

Amidst global economic concerns, the NSE Nifty 50 index faced a challenging start on March 15, with a 0.56% decline, closing below the key threshold of 22050. This downward trend persisted throughout the trading session, reflecting prevailing market sentiment. The inability to maintain above the upward trendline indicates looming market weakness, supported by bearish momentum indicators in the short term.

The market’s downturn was influenced by global factors, including Asian markets experiencing similar declines due to US inflation data surpassing expectations. This raised worries about potential delays in interest rate cuts, impacting investor sentiment. Furthermore, widespread selling pressure on major indices was aggravated by mutual fund liquidity stress test results, highlighting persistent market volatility, particularly affecting small and mid-cap sectors.

Despite these challenges, fund houses remain confident in their portfolio resilience, reassuring investors of their ability to navigate adverse conditions. Attention now turns to the US Federal Reserve’s forthcoming monetary policy announcement on March 20, with expectations leaning towards unchanged interest rates initially, potentially followed by rate cuts from June or July onwards.

Domestically, upcoming data releases on loan and deposit growth will offer insights into the banking sector’s performance, crucial for market evaluation. While caution prevails regarding mid and small caps, expectations of moderated global commodity prices and upward revisions in India’s GDP forecast for FY25 suggest robust domestic demand, laying the foundation for potential market recovery once stability is achieved.

Amidst these dynamics, investors may identify opportunities in mid- and small-cap stocks with solid fundamentals, offering potential bargains amidst market volatility. Strategic positioning and vigilant monitoring of both domestic and global developments will be key to navigating the evolving market landscape effectively.

Bank Nifty: Down by 0.42%

The Bank Nifty commenced trading on a negative note, reflecting a 0.42% decline and closing at 46,594.10, indicating a day of losses for the banking sector. Similarly, the BSE Sensex experienced downward pressure, declining by 0.62% to close at 72,643.43, mirroring the prevailing bearish sentiment.

In contrast, the metal sector exhibited promising gains, with a 0.03% rise. Hindustan Copper Ltd. surged significantly by 2.63%, while Vedanta Ltd. followed suit with a gain of 1.48%. Conversely, the oil and gas sector encountered challenges, witnessing a notable decline of 1.98%. Hindustan Petroleum Corporation Limited incurred a substantial loss of -6.36%, while Indian Oil Corporation Ltd. also faced a downturn with a loss of -5.25%.

Amidst these fluctuations, investors are observing sectoral performances closely, with the metal sector showing resilience amid broader market downturns. Strategic analysis and timely adjustments are crucial for navigating the market’s dynamic landscape effectively.

Foreign Institutional Investors (FII/FPI) demonstrated a positive stance with a buy value of Rs. 49,504.55 Cr and a sale value of Rs. 48,655.99 Cr, resulting in a net value of Rs. 848.56 Cr. Conversely, Domestic Institutional Investors (DII) showcased a contrasting trend, with a buy value of Rs. 15,254.61 Cr and a sale value of Rs. 15,936.87 Cr, leading to a net value deficit of Rs. -682.26 Cr.

Bank Nifty

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

The gainers included Federal Bank with a 2.81% increase, Bandhan Bank with a 2.42% increase, IDFC First Bank with a 0.32% increase, and IndusInd Bank with a 0.26% increase. On the other hand, the biggest losers in the sector included Punjab National Bank with a 2.28% decline, Bank of Baroda with a 1.66% decline, State Bank of India with a 1.13% decline, Axis Bank with a 0.97% decline, and ICICI Bank with a 0.90% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Slips Against US Dollar Amidst Foreign Outflows

The Indian rupee faced downward pressure against the US dollar, declining by 4 paise to close at 82.88 (pro) on Friday. This dip was primarily attributed to continued foreign fund outflows and a negative trend in domestic equities, which dampened investor sentiment.

Factors contributing to the rupee’s depreciation included the elevated value of the American currency in global markets and rising crude oil prices internationally. At the interbank foreign exchange market, the rupee opened at 82.95, touching an intraday low of 82.96 and reaching a high of 82.85 against the dollar before settling at 82.88 (pro). This marked a loss of 4 paise from its previous close of 82.84 on Thursday.

Simultaneously, the dollar index, measuring the dollar’s strength against a basket of six major currencies, saw a slight decline of 0.05%, reaching 103.31. This movement followed hotter-than-expected inflation data from the US.

In the energy markets, Brent crude futures, a key global oil benchmark, experienced a decrease of 0.50%, reaching $84.99 per barrel. This decline may have contributed to easing concerns about inflationary pressures and provided some relief to investors amidst broader market volatility.

Stocks Highlights

UPL Ltd.: A Mixed Bag of Performance Metrics

UPL Ltd. witnessed a notable increase in its share price, rising by 3.18% to reach Rs 476.80 from its previous close of Rs 462.10. However, despite this positive movement, data indicates that only a small fraction, 2.94%, of trading sessions over the past 19 years saw intraday gains higher than 5%.

Analyzing its financial health, the company allocated 5.53% of its operating revenues towards interest expenses and 9.44% towards employee costs in the fiscal year ending March 31, 2023.

Comparing stock returns with the Nifty Midcap 100, UPL Ltd. delivered a negative 3-year return of -25.63%, contrasting sharply with Nifty Midcap 100’s robust return of 95.81%. Furthermore, the company reported a decline in quarterly revenue growth, with total income for the quarter ending December 31, 2023, decreasing by -2.31% quarter-on-quarter and -27.23% year-on-year.

Mahindra & Mahindra Ltd.: Navigating Market Volatility

In contrast, Mahindra & Mahindra Ltd. experienced a decline in its share price, dropping by -4.99% to Rs 1,796.30 from its previous close of Rs 1,890.55. Similar to UPL Ltd., only a minimal 1.76% of trading sessions over the past 19 years witnessed intraday gains higher than 5%.

Despite this setback, Mahindra & Mahindra Ltd. demonstrated strong performance metrics in other areas. The company outperformed its 5-year average ROE, delivering a robust return of 18.24% in the fiscal year ending March 31, 2023. Additionally, its annual revenue growth of 34.43% surpassed its 3-year CAGR of 16.85%.

Moreover, recent market signals suggest a potential buy opportunity, with a 20-day moving crossover indicating bullish sentiment. Historically, such signals have resulted in an average price gain of 2.95% within 7 days.

Advance Decline Ratio

Today, the advance-decline ratio was 0.78, and the market breadth was negative. The volatility index India Vix increased by 0.49 percent to settle at 13.69 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1112
Decliners – 1426
52Wk High –  19
52Wk Low – 27
High Band Hitters – 124
Low Band Hitters – 149
200d SMA – 20261
50d SMA – 21910
20d SMA – 22217

Top Gainers and Losers Stocks

The top gainers were UPL (+3.18%), Bharti Airtel (+1.62%), HDFC Life (+1.53%), Bajaj Finance (+1.37%), and Adani Ports (+1.27%).

The top losers were M&M (-4.99%), BPCL (-4.15%), Coal India (-2.85%), Tata Motors (-2.46%), and Hero MotoCorp (-2.23%).

Top Gainers and Losers Sector

The top gainers sector were Metal (+0.03%), and FMCG (+0.02%).

The top losers sector were Oil & Gas (-1.98%), Auto (-1.57%), Pharma (-0.95%), IT (-0.47%), and Financial Services (-0.39%).

SECTORS – NOTABLE ACTION
METAL +0.03%
FMCG +0.09%
OIL & GAS -1.98%
AUTO -1.57%
PHARMA -0.95%

Stocks Ban List

(SEBI) F&O ban list (BHEL open at +225.50 and close at -216.75), (RBLBANK open at +227.00 and close at -224.15), (PEL open at +831.00 and close at -819.25), (SAIL open at +121.10 and close at +121.70), (NATIONALUM open at +141.30 and close at -136.40), (ZEEL open at +146.95 and close at -141.70), (ABFRL open at +201.00 and close at +207.35), (MANAPPURAM open at +166.00 and close at +165.75), and (TATACHEM open at +1136.70 and close at -1128.75) 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.

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

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

Daily Pivots

As per the above pivots data, 21900 to 22200 is the Nifty 50 trading range.

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Nifty Ends 149 Points Higher with Inside Bar Candle Formation
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This article is only for educational purposes and is not an investment advice.