Nifty’s Upward Surge Hammer Formation Sparks Optimism!

At the close, the Nifty 50 was at 19,545.75 up by 0.56%

In the dynamic world of equity markets, investors are vigilant for signs of recovery and positive sentiment. Recent developments suggest a promising turnaround, as equity benchmarks broke a two-day losing streak to finish on a positive note. This resurgence aligns with a global market rebound, illustrating the interconnectedness of financial markets worldwide.

One crucial factor contributing to this shift is the slight pullback in US Treasury yields. Bond yields significantly influence investment decisions, making this retreat a relief for investors. Additionally, the performance of the dollar index has boosted investor confidence.

The NSE Nifty 50, a leading index tracking the Indian stock market’s performance, mirrored this optimism. It started strong, rising by 0.56 percent and ultimately closing in positive territory. This milestone is notable as it pushed the Nifty above the critical 19,500 level, signaling potential for further gains.

When evaluating the recent NSE Nifty 50 rebound, it’s essential for participants not to read too much into a single day’s performance. Instead, patience is advised as we await the index’s return to the short-term moving average (20 EMA) for a sustained and robust recovery. Caution is wise in the ever-volatile equity market landscape.

In the current scenario, specific Information Technology (IT) giants have taken the lead, while others rotate into supportive roles. This sectoral rotation highlights the importance of diversification and adaptability in one’s investment strategy.

Positive signals from Purchasing Managers’ Index (PMI) data and a correction in crude oil prices have significantly boosted market sentiment. Furthermore, reduced selling by Foreign Institutional Investors (FIIs) has provided a much-needed boost to sectors like banking and IT shares, reinforcing market resilience.

Looking at the Reserve Bank of India (RBI) policy, the market anticipates interest rates to remain unchanged. This outlook is driven by concerns about subdued external demand trends, raising fears of future disinflationary pressures. Market participants should remain vigilant and closely monitor these factors as they navigate the intricate landscape of the Nifty.

Bank Nifty: Up by 0.57%

The Bank Nifty commenced its trading session on a positive note, opening in the green and displaying resilience with a notable 0.57 percent increase. Ultimately, it closed at 44,213.35, securing a green finish.

Similarly, the BSE Sensex showcased its vitality by opening with a gap up, signifying bullish sentiment. It continued to consolidate throughout the trading day, reflecting stability and confidence in the broader market. The Sensex recorded a commendable 0.62 percent increase, closing at a high of 65,631.57, further affirming its resilience.

On a technical note, the hourly momentum indicator revealed positive divergence and crossover, two key indicators of bullish market sentiment. This provides valuable insights for traders and investors, hinting at potential opportunities in the coming days.

Sectorial performance, In the media sector, there was a notable gain of 1.58%, reflecting robust investor interest and optimism. Within this sector, Network18 Media & Investments Ltd. surged impressively, registering a gain of 6.54%. Similarly, Nazara Technologies Ltd. displayed strong performance, with gains of 5.30%.

Conversely, the pharmaceutical sector faced headwinds, emerging as the top loser with a decrease of 0.30%. Within this sector, Glenmark Pharmaceuticals Ltd. experienced a decline of -1.69%, while GlaxoSmithKline Pharmaceuticals Ltd. saw a decrease of -1.53%.

Bank Nifty

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

The gainers included AU Bank with a 1.62% increase, ICICI Bank with a 1.00% increase, State Bank of India with a 0.98% increase, Axis Bank with a 0.82% increase, and Kotak Bank with a 0.65% increase. On the other hand, the biggest losers in the sector included Punjab National Bank with a 3.45% decline, Bandhan Bank with a 1.63% decline, Federal Bank with a 0.78% decline. These results suggest that some banking stocks performed better for the day.

Buzz

Rupee’s Stability Amidst Market Dynamics and RBI Policy Meeting

The Indian rupee exhibited a day of relative stability in the foreign exchange market, with its value fluctuating within a narrow range of 83.19 to 83.26 against the US dollar. This stability can be attributed to the consistent performance of the dollar index, which remained within a relatively stable range, thus preventing significant swings in the rupee’s valuation.

A notable factor contributing to the rupee’s stability was the recent decline in crude oil prices. This drop provided support to the rupee, helping it maintain a position above the crucial 83.30 mark. The relationship between crude oil prices and the rupee’s performance is well-established, making this development a key influence on its value.

Looking ahead, the next major event on the rupee’s horizon is the Reserve Bank of India’s policy meeting scheduled for October 6th. Market expectations lean heavily towards the central bank keeping interest rates unchanged, maintaining the current rate of 6.50%. This impending event is likely to have a considerable impact on the rupee’s short-term direction.

Considering the current market dynamics and the imminent RBI policy meeting, it is foreseeable that the rupee will continue to trade within a range of 83.05 to 83.35. Market participants should remain vigilant and adapt their strategies in response to these influential factors.

Buzzing

Bajaj Auto Ltd. has witnessed a noteworthy increase in its share price, rising by 2.15% from its previous close of Rs 4,918.60 to reach a last traded price of Rs 5,024.55. An intriguing development is the recent appearance of a 20-day moving average crossover signal, indicating a potential shift in trend. However, historical data reveals that an average price decline of -1.64% within 7 days of this signal has been observed over the last 5 years. Additionally, the company’s dividend payment strategy, linked to cash reserves, suggests the possibility of a significant rise in dividend payouts for FY23 and beyond, considering the current reserve levels.

Conversely, Power Grid Corporation of India Ltd. experienced a -1.21% decrease in its share price from the previous close of Rs 199.00, settling at a last traded price of Rs 196.60. A 5-day moving average crossover signal emerged on October 3, 2023, indicating potential downside pressure. Historical data shows an average price decline of -2.07% within 7 days of this signal over the last 5 years. Moreover, the company’s recent quarterly revenue decline of 10.35%, the lowest in the past 3 years, warrants attention. Remarkably, only 1.13% of trading sessions in the last 16 years saw intraday declines exceeding 5%.

Advance Decline Ratio

Today, the advance-decline ratio was 1.70, and the market breadth was positive. The volatility index India Vix decreased by 5.94 percent to settle at 10.96 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1497
Decliners – 879
52Wk High –  98
52Wk Low – 12
High Band Hitters – 104
Low Band Hitters – 28
200d SMA – 18512
50d SMA – 19608
20d SMA – 19785

Top Gainers and Losers Stocks

The top gainers were Bajaj Auto (+2.15%), Larsen & Toubro (+2.06%), M&M (+1.76%), Titan (+1.64%), and TCS  (+1.48%).

The top losers were Power Grid (-1.21%), Hindalco (-0.49%), NTPC (-0.40%), Cipla (-0.40%), and Nestle India (-0.38%).

Top Gainers and Losers Sector

The top gainers sector were Media (+1.58%), IT (+0.99%), Auto (+0.85%), Consumer Durables (+0.56%), and Financial Services (+0.51%).

The top losers were Pharma (-0.30%), Metal (-0.25%), FMCG (-0.10%).

SECTORS – NOTABLE ACTION
MEDIA +1.58%
IT +0.99%
AUTO +0.85%
PHARMA -0.30%
METAL -0.25%
FMCG -0.10%

Stocks Ban List

(SEBI) F&O ban list (DELTACORP open at +137.50 and close at +136.65), (MANAPPURAM open at -145.00 and close at -141.00), and (IBULHSGFIN open at -171.20 and close at +171.35) 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.

MCX, PNB, HINDCOPPER, and BALRAMCHIN stock has the possibilities of enterance in the ban list.

Daily Pivots

As per the above pivots data, 19480 to 19600 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Surviving the Market Meltdown Last-Hour Buying Rescues Nifty from Plummeting Below 19,350
Foreign Fund Outflows and Sluggish Asian Markets Drive Tuesday’s Equity Decline
Friday’s Market Rebound Global Trends Boost Equity Benchmark Indices
Market Rollercoaster From Negative to Near High in One Day

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