Nifty’s Silent Stance! Will the Rally Continue, or Is a Storm Brewing for Nifty?

At the close, the Nifty 50 was at 25,356.50 down by 0.13%

The market opened in green, only to close in red—what happened along the way?

September 13, 2024. The Nifty 50 index kicked off today with a positive spark but ended the session down by 0.13%, closing just above 25,350. After the thrilling rally to all-time highs in the previous session, investors were expecting consolidation, but what unfolded was a suspenseful swing between gains and losses.

What’s next for Nifty—another rally or a cautious pause?

Despite early gains, the index erased its momentum, settling into a range-bound movement throughout the day. As the dust settled, Nifty closed at 25,356.50, shedding 32.40 points. The consolidation after a sharp rise is a signal that traders might be taking a “wait-and-watch” approach ahead of next week’s key event—the US Fed policy meeting.

The FMCG and energy sectors dragged the market, while the sharp upsurge from Thursday seemed to fade into cautious trading. Power, oil & gas, and FMCG stocks saw selective profit-taking as the market cooled down, showing that investors might be waiting for a clear signal before their next move.

Is the market heading for a correction or preparing for a fresh breakout?

While global sentiment remained positive, especially with US data showing comfort on inflation management, the mood wasn’t strong enough to push Nifty back into the green. Adding to the uncertainty was the recent correction in global oil prices, sparking concern about global demand but providing some hope for the Indian economy.

Domestically, India’s CPI inflation remained steady at 3.7%, a level that gives the RBI room to maneuver, but with food prices on the rise, the central bank may still proceed with caution.

Technically, Nifty remained range-bound, encountering resistance at the rising trendline on the daily chart. And with the RSI showing signs of a bearish crossover, could we be seeing the first signs of a bearish momentum reversal?

As we look ahead to the upcoming US Fed meet, will the prospects of a FED rate cut bring a fresh wave of optimism, or is this the calm before the storm?

RBI’s Warning: Are We Heading for Trouble? ⚠️💥

In a recent statement, RBI Governor Shaktikanta Das warned about stretched valuations and the potential for sudden shocks to create stress in financial markets. Such shocks could lead to widespread sell-offs and market contagion.

Bank Nifty: Up by 0.32%

The Bank Nifty opened on a positive note, climbing 0.32% and closing in the green at 51,938.05, reflecting resilience in the banking sector. Investors seemed optimistic, pushing the index higher despite broader market uncertainties. In contrast, the BSE Sensex saw a minor slip, down 0.09%, closing at 82,890.94.

In the sectorial front, the Realty sector took the spotlight, posting a significant gain of 1.73%. Leading the charge were DLF Ltd., which soared by 3.60%, and Macrotech Developers Ltd., with an impressive 3.42% rise.

On the flip side, the FMCG sector found itself on shaky ground, emerging as the top loser with a decline of 0.69%. Balrampur Chini Mills Ltd. led the downward slide, dropping by 2.67%, followed by Godrej Consumer Products Ltd., which fell by 1.69%.

FIIs/FPIs recorded a substantial buy value of Rs. 15,982.99 crore, while their sales amounted to Rs. 13,618.17 crore, resulting in a net inflow of Rs. 2,364.82 crore.

Domestic Institutional Investors (DII) showed robust activity as well, with a buy value of Rs. 11,156.43 crore and a sale value of Rs. 8,624.25 crore, leading to a net inflow of Rs. 2,532.18 crore.

Bank Nifty

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

The gainers included Bandhan Bank with a 5.03% increase, Punjab National Bank with a 2.19% increase, Federal Bank with a 1.70% increase, IndusInd Bank with a 1.33% increase, and IDFC First Bank with a 1.03% increase.

On the other hand, the biggest losers in the sector included Kotak Bank with a 0.30% decline, ICICI Bank with a 0.29% decline, HDFC Bank with a 0.11% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 13th September, 2024

Rupee Rises Slightly – Is It a Sign of Stability or Just a Blip? 💹🧐

Early trade saw the rupee appreciating by 5 paise, reaching 83.91 against the US dollar. This modest rise reflects the weakening of the American currency and notable foreign fund inflows. Despite this uptick, the rupee remains within a tight trading range, with the Reserve Bank of India (RBI) keeping a firm grip on its movements.

At the interbank foreign exchange market, the rupee opened at 83.92, and edged lower to 83.91, marking a rise of 5 paise from the previous close. On Thursday, the rupee had settled 3 paise higher at 83.96 against the greenback.

Despite these fluctuations, the rupee continues to trade within a narrow band. In the short term, it’s expected to hover between 83.80 and 84.05, while the medium-term outlook slightly extends this range to 83.70 to 84.05.

What’s Driving These Movements? 🌐💡

The dollar index—which measures the greenback’s strength against a basket of six major currencies—has dipped by 0.30% to 101.06 points. Additionally, Brent crude prices have risen by 0.49% to USD 72.34 per barrel in futures trade, adding a layer of complexity to the forex market dynamics.

Will the rupee find a new equilibrium, or is it just a pause in its ongoing tight range? Keep an eye on these indicators as they could offer clues about future movements in the currency markets.

Stocks Highlights

Wipro Ltd.’s stock recently surged by 3.78%, closing at Rs 550.10 compared to its previous close of Rs 530.05. This uptick is notable, but it’s essential to delve deeper into the numbers to understand its significance. Historically, Wipro has shown impressive resilience, with only 1.33% of trading sessions over the past 19 years recording intraday gains exceeding 5%.

Yet, the recent price movement might hint at a bullish phase, especially with a 50-day moving average crossover signaling potential gains. Historically, this signal has led to an average price increase of 4.27% within 30 days over the past five years.

However, when comparing Wipro’s 3-year returns of -19.97% with the Nifty 100’s 47.22% return, the contrast is stark. Investors should stay alert as Wipro’s recent performance could either mark a turnaround or a short-lived spike.

Meanwhile, SBI Life Insurance Company Ltd. has faced a slight dip of -1.65%, with its stock recently trading at Rs 1,845.00, down from Rs 1,875.95. Despite this drop, SBI Life is managing its finances prudently, maintaining ample cash reserves to handle contingent liabilities.

Over the past 7 years, only 0.63% of trading sessions saw gains surpassing 5%, underscoring the stock’s stability in turbulent times. On a more positive note, SBI Life’s annual revenue growth has outpaced its 3-year compound annual growth rate (CAGR), with a remarkable 62.23% growth rate compared to the 17.13% CAGR.

Recent technical indicators are also favorable, with a 10-day moving average crossover appearing yesterday, historically correlating with an average price gain of 2.63% within 7 days.

Advance Decline Ratio

Today, the advance-decline ratio was 1.63, and the market breadth was positive. The volatility index India Vix decreased by 4.79 to settle at 12.55 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1700
Decliners – 1043
52Wk High – 188
52Wk Low – 17
High Band Hitters – 146
Low Band Hitters – 43
200d SMA – 22768
50d SMA – 24692
20d SMA – 25027

Top Gainers and Losers Stocks

The top gainers were Wipro (+3.78%), Bajaj Finsev (+2.33%), Bajaj Finance (+2.26%), Grasim (+1.34%), and IndusInd Bank (+1.33%).

The top losers were SBI Life (-1.65%), Adani Ports (-1.43%), HDFC Life (-1.34%), ITC (-1.13%), and Coal India (-1.08%).

Top Gainers and Losers Sectors

The top gainers sector were Realty (+1.73%), Media (+1.68%), Consumer Durables (+0.91%), Metal (+0.86%), and IT (+0.56%).

The top losers sector were FMCG (-0.69%), and Oil & Gas (-0.67%).

SECTORS – NOTABLE ACTION
REALTY +1.73%
MEDIA +1.68%
CONSUMER DURABLES +0.91%
FMCG -0.69%
OIL & GAS -0.67%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at -555.00), (AARTIIND close at +569.00), (BALRAMCHIN close at -557.30), (BANDHANBNK close at +207.10), (RBLBANK close at +214.22), (HINDCOPPER close at +314.90), (CHAMBLFERT close at -507.65), and (ABFRL close at +328.55) 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.

IDEA, PNB, SAIL, NMDC, GNFC, GMRINFRA, BIOCON, CANBK, IDFCFIRSTB, BANKBARODA, BSOFT, NATIONALUM, LICHSGFIN, and TATACHEM stocks has the possibilities of entrance in the ban list.

CHAMBLFERT, and ABFRL has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 25100 to 25500 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Nifty Hits Record High Amidst Global Surge! Is This the Start of a New Bull Run?
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This article is only for educational purposes and is not an investment advice.