Nifty’s Soaring Journey Takes a Sudden Plunge A 2.80% Drop from All-Time High

At the close, the Nifty 50 was at 19,674.25 down by 0.34%

In the most recent trading sessions, the Nifty 50 has exhibited a discernible bearish trend, characterized by an opening on a low note and closing with a 0.34 percent decline. The index’s descent below the crucial 19,700 level has triggered apprehensions among investors, reflecting a nuanced understanding of market sentiment.

One significant event that had been anticipated to infuse optimism into the market was the inclusion of Indian bonds in the JP Morgan index. However, contrary to expectations, benchmark indices have extended their losses for a fourth consecutive day. This protracted downward spiral can be attributed to a confluence of factors, including the persistent issue of lofty market valuations, the relentless surge in crude oil prices, the strength of the US Dollar index, and the upward trajectory of treasury yields. Moreover, the continuous selling pressure exerted by foreign institutional investors (FIIs) has compounded the existing bearish sentiment.

India’s long-awaited inclusion in global bond indices has finally materialized, heralding the potential to fortify the nation’s external fundamental factors. The mere inclusion of India in JP Morgan’s index is projected to attract an influx of more than USD 25 billion over the next two years, leading to a reduction in market yields and offering substantial support to the Indian currency.

Amid these formidable challenges, it is noteworthy that PSU (Public Sector Undertaking) bank stocks have exhibited remarkable resilience. This resilience stems from India’s inclusion in JP Morgan’s Government Bond Index, which has led to a discernible decline in bond yields. However, the market remains cautiously optimistic, as the ascent of US bond yields persists, and concerns about higher rates loom large on the horizon.

Bank Nifty: Down by 0.03%

The Bank Nifty initially showed promise but concluded with a slight dip of 0.03 percent, closing at 44,612.05. In parallel, the BSE Sensex experienced a more substantial decline, dropping by 0.33 percent and closing at 66,009.15.

A notable development within the Bank Nifty index was the emergence of a significant double top breakdown pattern, a reliable indicator of potential trend reversal. This bearish sentiment was primarily fueled by selling pressure observed in HDFC Bank, a prominent player in the Indian banking sector.

The market’s overall sentiment remains fragile, grappling with weak global cues and selling pressure on select heavyweight stocks. The forthcoming days hold substantial importance, as the potential for a recovery in the banking and financial sectors will be instrumental in any meaningful market rebound. In the absence of such a resurgence, the corrective tone witnessed in recent trading sessions is likely to persist.

In the sectorial landscape, the auto sector managed a modest gain of 0.21% during the session. Particularly, Maruti Suzuki India Ltd. displayed a robust performance, recording a gain of 2.61%, while Mahindra & Mahindra Ltd. also registered a notable increase of 1.69%.

Conversely, the pharmaceutical sector faced challenges during the same period, emerging as the top loser with a decline of 1.55%. Within this sector, Zydus Lifesciences Ltd. experienced a substantial loss of -3.18%, closely followed by Glenmark Pharmaceuticals Ltd. with a loss of -2.98%.

Bank Nifty

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

The gainers included Bank of Baroda with a 3.89% increase, Punjab National Bank with a 3.47% increase, IndusInd Bank with a 2.86% increase, State Bank of India with a 1.79% increase, and Bandhan Bank with a 1.45% increase. On the other hand, the biggest losers in the sector included HDFC Bank with a 1.49% decline, and ICICI Bank with a 0.81% decline. These results suggest that some banking stocks performed better for the day.

FII/FPI activity indicates a Buy Value of Rs. 10,840.20 Crores and a Sale Value of Rs. 12,166.94 Crores, resulting in a Net Value of -Rs. 1,326.74 Crores. This negative net value suggests that FIIs/FPIs have been net sellers in the market during this period.

Conversely, DII activity showcases a Buy Value of Rs. 7,902.06 Crores and a Sale Value of Rs. 7,100.79 Crores, resulting in a positive Net Value of Rs. 801.27 Crores. This indicates that DIIs have been net buyers in the market, demonstrating their confidence in the Indian stock market.

Buzz

Rupee Gains Ground as India’s Bond Inclusion Resonates

The Indian rupee showcased resilience in the forex market, appreciating by 19 paise to reach 82.94 (pro) against the US dollar on Friday. This uptick in the rupee’s value can be largely attributed to the significant development of India’s inclusion in the JPMorgan bond index, which resonated positively with investors.

JPMorgan Chase & Co’s decision to include Indian government bonds in its benchmark emerging market index carries substantial implications for both India’s debt market and global investors. This move is expected to open up new avenues for investment in Indian bonds, drawing increased foreign capital into the country.

In the interbank foreign exchange market, the rupee kicked off the trading session at 82.75 against the US dollar, briefly touching a low of 82.97 during the day. However, it ultimately settled 19 paise higher at 82.94 (pro), marking a favorable shift from the previous day’s closing rate of 83.13 against the US dollar.

Buzzing

IndusInd Bank Ltd. experienced a positive momentum in its share price, surging by 2.86% from its previous close of Rs 1,411.30 to reach Rs 1,451.65. Notably, a 20-day moving crossover signal emerged recently. However, historical data shows an average price decline of -3.47% within 7 days of this signal over the past 5 years. Despite this short-term volatility, the bank has demonstrated robust annual revenue growth of 16.51%, outperforming its 3-year CAGR of 7.54%. Additionally, IndusInd Bank reported a YoY increase of 21.28% in its advances, surpassing its 5-year CAGR of 9.24%. It’s noteworthy that only 3.59% of trading sessions in the last 18 years saw intraday declines higher than 5%.

On the other hand, Wipro Ltd. witnessed a decline in its share price, falling by -2.44% from its previous close of Rs 428.95 to Rs 418.50. A daily MACD crossover signal appeared recently, with historical data showing an average price decline of -2.7% within 10 days of this signal over the past decade. Furthermore, the company reported a QoQ revenue decline of 1.5%, marking the lowest figure in the last 3 years. Interestingly, only 1.06% of trading sessions in the last 18 years saw intraday declines higher than 5%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.85, and the market breadth was negative. The volatility index India Vix decreased by 1.45 percent to settle at 10.66 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1084
Decliners – 1280
52Wk High –  40
52Wk Low – 10
High Band Hitters – 53
Low Band Hitters – 33
200d SMA – 18472
50d SMA – 19627
20d SMA – 19701

Top Gainers and Losers Stocks

The top gainers were IndusInd Bank (+2.86%), Maruti (+2.61%), SBIN (+1.79%), M&M (+1.69%), and Asian Paint  (+1.12%).

The top losers were Wipro (-2.44%), Dr. Reddy (-2.32%), UPL (-1.83%), Cipla (-1.66%), and Bajaj Auto (-1.58%).

Top Gainers and Losers Sector

The top gainers sector were Auto (+0.21%).

The top losers were Pharma (-1.55%), Consumer Durables (-0.81%), Metal (-0.66%), Realty (-0.66%), and Financial Services (-0.41%).

The Nifty Midcap 50 was down by 0.07 percent, while the Nifty Small Cap 50 up by 0.10 percent on the day.

The Nifty Midcap 50 index currently closed at 11,494.90, while the Nifty Small Cap 50 index currently closed at 5,734.20.

SECTORS – NOTABLE ACTION
AUTO +0.21%
PHARMA-1.55%
CONSUMER DURABLES -0.81%
METAL -0.66%

Stocks Ban List

(SEBI) F&O ban list  (HINDCOPPER open at -154.50 and close at -153.15), (DELTACORP open at -176.25 and close at -175.40), (BALRAMCHIN open at -419.75 and close at -414.30), (IBULHSGFIN open at -190.00 and close at -184.45), (MANAPPURAM open at -138.15 and close at +140.80), (ZEEL open at +267.10 and close at -265.50), (BHEL open at +125.00 and close at +124.40), and (PNB open at -75.80 and close at +77.50) 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.

RBLBANK, CANBK, INDUSTOWER, NMDC, NATIONALUM, SAIL, INDIACEM, GNFC, GRANULES, RECLTD, IRCTC, BSOFT, L&TFH, and IEX stocks has the possibilities of enterance in the ban list.

MANAPPURAM, ZEEL, BHEL, and PNB stocks has the possibilities of exit from ban list.

Daily Pivots

As per the above pivots data, 19610 to 19770 is the Nifty 50 trading range.

Read previous -Daily Insights- here
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Day of Losses and Selling Pressure Market Plunges
Market Reacts to Weak Global Cues, Ends Near Daily Low
Nifty Takes the Lead as Markets Keep Climbing

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