Nifty’s Wild Ride: Will It Soar to New Heights or Crash Under Pressure?

At the close, the Nifty 50 was at 24,213.30 up by 0.91%

Today’s stock market drama unfolded with the NSE Nifty 50 starting in the red, but by day’s end, it painted a different picture. Closing above 24,200, the Nifty50 managed to defy the odds, rebounding from early losses. But what sparked this unexpected recovery?

As the morning trading commenced, investors were gripped by a sense of uncertainty, fueled by ongoing foreign fund outflows and a cautious mood ahead of the nail-biting U.S. presidential election and the Federal Reserve’s interest rate decision. The benchmark indices seemed to be spiraling downward, reflecting a tumultuous atmosphere as market participants braced for turbulence.

But wait—what’s this? A dramatic twist! By afternoon, Indian equity markets turned the tide, propelled by strong gains in the metal and banking sectors, as global cues began to shine positively. The Nifty50 index didn’t just recover; it surged, erasing previous session losses and closing on a high note. With a remarkable leap of 386.30 points (1.62%), the index soared to an intra-day high of 24,229.05, ultimately finishing at 24,213.30.

What led to this electrifying turnaround? Despite the early bearish sentiment, late-session buying—particularly in undervalued heavyweight financial stocks—sparked a significant market rally. Metal stocks joined the party, providing crucial support as mid and small-cap stocks managed to gain traction, albeit at a slower pace.

Intriguingly, Nifty has found support around a historical swing low for the second consecutive day. Technical analysts are buzzing about a Piercing Line candlestick pattern appearing on the daily chart, hinting at a potential bullish reversal. Coupled with a positive divergence on the daily RSI, the case for an upward move seems to strengthen.

What’s Next? A Critical Crossroad Awaits!

As Wall Street prepares for U.S. election day, U.S. stock index futures have steadied, setting the stage for potentially volatile trading sessions ahead. With both Republican Donald Trump and Democrat Kamala Harris predicting victory in a fiercely contested race, the outcome in crucial swing states remains anyone’s guess. Could this uncertainty keep investors on edge?

Amidst this backdrop, Indian benchmark indices Sensex and Nifty closed higher in a volatile session, driven by interest in undervalued financial shares. The market capitalization of all listed companies on the BSE soared by ₹2.5 lakh crore, reaching ₹444.6 lakh crore. However, the specter of a potential downgrade in Q2 GDP forecast looms large, leaving investors questioning the market’s stability.

The U.S. presidential election is a decisive moment, with polling showing Trump and Harris neck and neck in pivotal swing states. The outcome will not just determine the next President but may also set the tone for Federal Reserve interest rate decisions—with a 98% chance of a 25 basis points cut anticipated this Thursday.

What Lies Ahead? A Market to Watch!

In summary, today’s trading session was a thrilling mix of tension and triumph, leaving investors eager for more. As global dynamics shift, with recent rebounds in domestic manufacturing data and anticipated stimulus from China, all eyes will be on how the U.S. election results unfold. Will the markets continue to rise, or will they plunge back into uncertainty? Stay tuned as this captivating market saga unfolds!

Bank Nifty: Up by 1.94%

The Bank Nifty opened lower but quickly turned around, finishing the day with a notable increase of 1.94%, closing at 52,207.25. Similarly, the BSE Sensex followed suit, climbing 0.88% to reach a robust closing high of 79,476.63.

In the sectorial front, the metal sector surged dramatically, climbing by an impressive 2.84%. Among the front-runners, JSW Steel Ltd. led the charge with a 4.57% gain, while Steel Authority of India Ltd. followed closely behind, appreciating by 4.06%.

On the flip side. The FMCG sector, usually a bastion of stability, found itself at the bottom of the barrel, slipping down by 0.34%. A closer look reveals that Varun Beverages Ltd. suffered a notable setback, losing 1.31%, and ITC Ltd. was not far behind, with a decline of 0.75%.

Foreign Institutional Investors (FII) revealed a buy value of ₹11,851.47 crore, but with a sale value of ₹14,420.88 crore, resulting in a net outflow of ₹2,569.41 crore. Is this a cause for concern?

Domestic Institutional Investors (DII) showcased a more optimistic picture, recording a buy value of ₹12,616.72 crore and a sale value of ₹9,585.76 crore, leading to a net inflow of ₹3,030.96 crore.

Bank Nifty

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

The gainers included Axis Bank with a 2.71% increase, HDFC Bank with a 2.30% increase, IndusInd Bank with a 2.27% increase, State Bank of India with a 2.17% increase, and Bank of Baroda with a 1.92% increase.

On the other hand, the biggest losers in the sector included AU Bank with a 1.83% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 5th November, 2024

Can the RBI Rescue the Rupee? A Closer Look at the Currency Crisis 🌍💸

In a dramatic turn of events, the Reserve Bank of India (RBI) has stepped in to combat the alarming decline of the Indian rupee against the US dollar, which recently plummeted to an all-time low of 84.11 on November 4. What does this mean for the future of the rupee?

Currency experts warn that the RBI’s routine interventions in the forex market are crucial as the rupee faces significant pressure. The depreciation has been linked to a series of troubling factors, including a sharp slide in Indian equities over the past month, driven by massive outflows from foreign portfolio investors (FPIs) and escalating crude oil prices amidst ongoing geopolitical tensions in the Middle East.

Why is this happening? As FPIs continue their relentless sell-off in equities, they are simultaneously purchasing dollars to repatriate their investments. The rupee has remained precariously above the 84 mark for over a month, influenced by external factors such as the high-stakes US presidential election on November 5 and more attractive equity returns in competing markets.

What Will Happen Next? Can the RBI Turn the Tide?

The RBI’s intervention aims to shield the rupee from further depreciation, but the underlying challenges remain. As the global landscape shifts, with significant market volatility ahead, the question on everyone’s lips is: Can the RBI successfully stabilize the rupee, or are we witnessing the beginning of a more extended struggle?

Stocks Highlights

JSW Steel Ltd. is turning heads with a 4.57% jump, pushing its share price from Rs 954.90 to Rs 998.50. But before you jump on the bandwagon, let’s dive into some intriguing statistics. In the past 19 years, only a mere 3.13% of trading sessions witnessed intraday declines exceeding 5%. This suggests a robust trend, yet a sell signal has emerged: a 50-day moving average crossover was triggered yesterday. Historically, this has led to an average price decline of -4.21% within 30 days over the last five years.

When it comes to performance, JSW Steel outshines the Nifty 100, boasting a 3-year return of 40.71% compared to the index’s 38.71%. However, it’s essential to consider the company’s financials—4.63% of its operating revenues went towards interest expenses, and 2.62% was allocated to employee costs for the fiscal year ending March 31, 2024.

Meanwhile, the situation at Infosys Ltd. is more sobering, with shares declining by -0.60%, from Rs 1,763.65 to Rs 1,753.00. A quick look at the intraday data reveals that in the last 20 years, only 0.79% of sessions saw gains over 5%. When compared to the Nifty 100, Infosys’s 3-year return of 3.22% lags far behind.

On the positive side, the company reported an impressive total income growth for the quarter ending September 30, 2024, reaching Rs 41,698.0 cr, reflecting a 3.85% increase quarter-over-quarter and 5.23% year-over-year.

Yet, with financials to scrutinize, Infosys spent less than 1% of its operating revenues on interest expenses, but a staggering 53.76% on employee costs in the same fiscal year.

Advance Decline Ratio

Today, the advance-decline ratio was 1.74, and the market breadth was positive. The volatility index India Vix decreased by 4.08 to settle at 16.01 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1759
Decliners – 1012
52Wk High – 77
52Wk Low – 22
High Band Hitters – 153
Low Band Hitters – 37
200d SMA – 23465
50d SMA – 25061
20d SMA – 24592

Top Gainers and Losers Stocks

The top gainers were JSW Steel (+4.57%), Tata Steel (+3.74%), Hindalco (+3.51%), Bajaj Auto (+3.35%), and Axis Bank (+2.71%).

The top losers were Trent (-1.71%), Adani Ports (-1.50%), Asian Paint (-0.87%), ITC (-0.75%), and Infosys (-0.60%).

Top Gainers and Losers Sectors

The top gainer sectors were Metal (+2.84%), Financial Services (+1.98%), Auto (+1.13%), Oil & Gas (+0.78%), and Realty (+0.62%).

The top loser sectors were FMCG (-0.34%), and Media (-0.23%).

SECTORS – NOTABLE ACTION
METAL +2.84%
FINANCIAL SERVICES +1.98%
AUTO +1.13%
FMCG -0.34%
MEDIA -0.23%

Stocks Ban List

The Securities and Exchange Board of India (SEBI) has not included any stocks on the F&O ban list.

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.

Daily Pivots

As per the above pivots data, 23800 to 24400 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Will the Nifty 50 Rebound or Continue Its Decline? Is This the Start of a Financial Crisis?
Nifty Closes in the Red ! What’s Going On with Nifty 50? Will Market Bounce Back or Stay in the Doldrums?

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