NSE Nifty 50 Encounters Significant Decline Amidst Market Turbulence

At the close, the Nifty 50 was at 21,957.50 down by 1.55%

The NSE Nifty 50 index encountered a substantial decline, opening in the red and closing lower by 1.55%, below the critical level of 22,000. Investor sentiment was notably subdued, influenced by escalating volatility and foreign investors’ selling pressure.

Throughout the trading session, the market witnessed persistent corrective movements, marking the fifth consecutive day of sell-offs. Despite initially trading flat, the Nifty gradually declined, settling near the day’s lowest point at 21,957.50 levels.

Several factors contributed to this downturn, including uncertainties surrounding the ongoing Lok Sabha elections and lackluster Q4 results for the 2024 season. Additionally, rising crude oil prices added to the market’s concerns, exacerbating the sell-off.

The hawkish stance adopted by certain US Federal Reserve officials further weighed on Indian equities, intensifying market pressure. This, coupled with nervousness surrounding election outcomes, fueled volatility, as evidenced by the India VIX.

Looking ahead, caution prevails in the broader market, with investors adopting a wait-and-see approach amidst Q4 earnings and election uncertainties. As the market dipped below the psychological threshold of 22,000, continued volatility is expected in the short term.

International Variables Aggravate Market Ambiguity

Amidst the domestic market turmoil, global indices are trading with mixed cues, amplifying uncertainty. Recent hawkish rhetoric from the US Federal Reserve and upcoming events such as the BOE policy meeting and US inflation figures contribute to market apprehension.

Investors remain cautious as they await further developments both domestically and internationally. The evolving landscape underscores the importance of vigilance and strategic decision-making in navigating through turbulent market conditions.

Bank Nifty: Down by 1.11%

The Bank Nifty index encountered significant bearish pressure, leading to a breach of the crucial 50-day exponential moving average (EMA) on a closing basis. Opening in the red, the Bank Nifty declined by 1.11%, settling at 47,487.90 by the end of the trading session.

Similarly, the BSE Sensex, representing broader market sentiment, experienced a decline of 1.45%, closing in the red at a low of 72,404.17. The breach of the 50-day EMA on the Bank Nifty index suggests a potential shift in trend and heightened volatility in the banking sector.

In the sectorial front, the automotive sector has shown promising gains, with a notable increase of 0.78%. Among the key players in this sector, TVS Motor Company Ltd. registered a significant rise of 3.25%, followed closely by Hero Motocorp Ltd. with a gain of 3.19%.

Conversely, the oil and gas industry experienced a downturn, marking a decrease of 3.15%. Bharat Petroleum Corporation Ltd. faced a notable decline of -4.52%, while Hindustan Petroleum Corporation Ltd. saw a decrease of -4.08%.

Foreign Institutional Investors (FII/FPI) exhibited a net selling behavior, with a buy value of Rs. 11,353.03 crore and a sale value of Rs. 18,347.89 crore. Consequently, the net value stood at a deficit of Rs. 6,994.86 crore.

Conversely, Domestic Institutional Investors (DII) showcased a contrasting trend, recording a buy value of Rs. 16,351.32 crore and a sale value of Rs. 10,708.79 crore. As a result, the net value for DII activity amounted to a surplus of Rs. 5,642.53 crore.

Bank Nifty

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

The gainers included Bandhan Bank with a 1.50% increase, State Bank of India with a 1.13% increase, AU Bank with a 0.75% increase, and Federal Bank with a 0.16% increase.

On the other hand, the biggest losers in the sector included IndusInd Bank with a 2.69% decline, Punjab National Bank with a 2.52% decline, HDFC Bank with a 2.15% decline, IDFC First Bank with a 1.69% decline, and Axis Bank with a 0.86% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Consolidates, Settles Flat Against US Dollar Amid Market Dynamics

The Indian rupee displayed a narrow consolidation and closed the day on a relatively flat note, edging up by 2 paise to settle at 83.50 against the US dollar. This marginal increase can be attributed to subdued domestic markets and the strength of the American currency.

Trading within a limited range at the interbank foreign exchange market, the rupee commenced the session at 83.49, reaching an intraday high of 83.44 before concluding the day at 83.50. This performance indicates a minor uptick from its previous close, albeit maintaining a stable trajectory.

Wednesday witnessed the rupee maintaining its range-bound movement, ending the day marginally lower at 83.52 against the US dollar. Market sentiments remained influenced by weak domestic indicators and the robustness of the US dollar, compounded by escalating crude oil prices.

Notably, the dollar index, measuring the greenback’s strength against a basket of currencies, stood at 105.70, registering a 0.15% increase. This upward movement stems from hawkish statements by the Federal Reserve and geopolitical tensions in the Middle East.

Amidst these developments, Brent crude futures, the global oil benchmark, observed a modest uptick of 0.57%, reaching $84.06 per barrel. The overnight surge in crude prices added pressure on the rupee, underscoring the currency’s sensitivity to global market dynamics.

Despite prevailing challenges, potential dollar inflows provided some support to the rupee earlier in the day, reflecting a nuanced interplay of factors shaping currency movements.

Stocks Highlights

Hero MotoCorp Ltd. Shows Positive Momentum

Hero MotoCorp Ltd. witnessed a notable uptick in its share price, rising by 3.19% from its previous close of Rs 4,613.90 to reach Rs 4,761.00. The company’s financial health is underscored by its prudent management of expenses, with less than 1% of operating revenues allocated towards interest expenses and 6.59% towards employee costs in the fiscal year ending March 31, 2023.

Investors have received a bullish signal, as indicated by a 50-day moving crossover observed recently. Historical data reveals an average price gain of 4.21% within 30 days following this signal over the past five years. Moreover, the stock has outperformed the Nifty 100 index, delivering a 3-year return of 61.28% compared to the index’s 53.88% return.

Larsen & Toubro Ltd. Faces Downward Pressure

Conversely, Larsen & Toubro Ltd. experienced a decline in its share price, dropping by -5.65% from its previous close of Rs 3,486.85 to Rs 3,289.95. The company’s financial metrics reveal higher expenditure, with 1.75% of operating revenues allocated towards interest expenses and 20.3% towards employee costs in the fiscal year ending March 31, 2023.

Despite its strong historical performance, with a 3-year return of 159.69%, outperforming the Nifty 100 index, the recent downturn reflects ongoing challenges and market dynamics impacting Larsen & Toubro Ltd.’s stock performance. Investors may closely monitor further developments and market trends in assessing investment decisions.

Advance Decline Ratio

Today, the advance-decline ratio was 0.19, and the market breadth was negative. The volatility index India Vix increased by 6.55 percent to settle at 18.20 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 413
Decliners – 2156
52Wk High – 73
52Wk Low – 29
High Band Hitters – 68
Low Band Hitters – 126
200d SMA – 20836
50d SMA – 22300
20d SMA – 22398

Top Gainers and Losers Stocks

The top gainers were Hero MotoCorp (+3.19%), Tata Motors (+1.77%), M&M (+1.52%), SBIN (+1.13%), and Bajaj Auto (+1.04%).

The top losers were Larsen & Toubro (-5.65%), BPCL (-4.52%), Asian Paint (-4.48%), Coal India (-4.40%), and ONGC (-3.85%).

Top Gainers and Losers Sector

The top gainers sector were Auto (+0.78%).

The top losers sector were Oil & Gas (-3.15%), Metal (-2.87%), FMCG (-2.47%), Realty (-2.23%), and Pharma (-2.20%).

SECTORS – NOTABLE ACTION
AUTO +0.78%
OIL & GAS -3.15%
METAL -2.87%
FMCG -2.47%

Stocks Ban List

(SEBI) F&O ban list (ZEEL open at +134.95 and close at -132.15), (BALRAMCHIN open at +381.55 and close at -371.70), (PNB open at +125.95 and close at -122.15), (GMRINFRA open at +80.70 and close at -78.55), (SAIL open at +161.00 and close at -153.05), (IDEA open at +12.75 and close at -12.65), (ABFRL open at -253.75 and close at -247.15), and (BIOCON open at +308.05 and close at -298.65) 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.

HINDCOPPER, INDIACEM, CANBK, COFORGE, LICHSGFIN, BSOFT, IDFCFIRSTB, PEL, BANDHANBNK, and IEX stocks has the possibilities of entrance in the ban list.

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

Daily Pivots

As per the above pivots data, 21750 to 22250 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Selling Pressure Weighs on India’s Nifty 50 Amid Disappointing Q4 Earnings
Indian Equity Markets Start Strong, But Financial Sector Weighs Them Down
The Impact of IPOs on India’s Economy

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