NSE Nifty 50 Sees Decline Amidst Market Volatility

At the close, the Nifty 50 was at 21,616.05 down by 0.76%

The NSE Nifty 50 commenced trading on a negative note, experiencing a decrease of 0.76 percent, eventually closing in the red zone. With the Nifty falling below 21,650, the Indian market initially showed marginal gains but failed to maintain momentum as selling pressure intensified throughout the session. Both the Sensex and the Nifty concluded near the day’s lowest points, just ahead of the CPI inflation data announcement. The Nifty closed at 21,616.05, marking a decline of 166.45 points, or 0.76 percent, reflecting the prevailing bearish sentiment.

Despite the overall market downturn, certain sectors such as IT and pharmaceuticals managed to withstand the selling pressure. However, the Nifty’s decline was exacerbated by a consolidation breakdown on the hourly chart, indicating increased pessimism among investors. Furthermore, the formation of a lower top on the daily chart signaled diminishing bullish sentiment, corroborated by the bearish crossover observed in the momentum indicator.

Although initial optimism stemming from rate cuts in both the US and India has waned, the market has exhibited resilience, buoyed by sustained flows from mutual funds and positive economic indicators. However, heightened margin requirements led to a decrease in positions, particularly impacting mid and small-cap stocks. Notable struggles were observed in PSU banks, while the premium valuation gap between mid to large caps reached its all-time high.

Looking ahead, while large caps are expected to outperform amid consolidation, challenges persist for the broader market, particularly in sustaining premium valuations amidst moderated corporate earnings and operating margins. As investors navigate through market volatility, staying informed and agile remains imperative for making sound investment decisions.

Bank Nifty: Down by 1.65%

The Bank Nifty started the day on a downward trend, opening in the red and experiencing a significant decline of 1.65 percent. The day concluded with the Bank Nifty closing at 44,882.25, reflecting continued negative sentiment in the market. Similarly, the BSE Sensex also faced a challenging trading session, registering a decrease of 0.73 percent. The Sensex closed at a low of 71,072.49, indicating a bearish trend in the market.

In the sectorial front, the IT sector witnessed a notable surge, gaining 0.79%. Among the top performers in this sector were Coforge Ltd., which saw a remarkable increase of 2.82%, and Wipro Ltd. with a significant gain of 2.18%. Conversely, the media sector experienced a substantial decline, with a loss of 4.46%. Leading the downturn were Dish TV India Ltd., which plummeted by -10.71%, and Zee Entertainment Enterprises Ltd., which saw a significant decrease of -8.24%.

Foreign Institutional Investors (FII/FPI) exhibited a net buy value of Rs. 126.60 crore. While their buy value stood at Rs. 9,156.97 crore, the sale value amounted to Rs. 9,030.37 crore. Conversely, Domestic Institutional Investors (DII) demonstrated robust activity, recording a net buy value of Rs. 1,711.75 crore. DIIs bought shares worth Rs. 11,183.90 crore and sold shares amounting to Rs. 9,472.15 crore.

Bank Nifty

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

Today, there were no gainers observed in the Bank Nifty. On the other hand, the biggest losers in the sector included Bandhan Bank with a 7.68% decline, Punjab National Bank with a 5.17% decline, Bank of Baroda with a 3.45% decline, State Bank of India with a 2.52% decline, and IDFC First Bank with a 2.46% decline. These results suggest that most of the banking stocks not performed better for the day.

Rupee Strengthens Against US Dollar Amidst Mixed Market Sentiment

The Indian rupee showcased resilience against the US dollar, appreciating by 7 paise to close at 83 (pro) on Monday. This upward movement was attributed to the weakness observed in the American currency and a decline in crude oil prices. However, the rupee’s gains were tempered by subdued domestic markets and continued foreign fund outflows.

In the interbank foreign exchange market, the rupee opened at 83.01 against the dollar, reaching an intraday high of 82.98 and a low of 83.02 before settling at 83 (pro) at day’s end, marking a marginal increase from its previous close.

Moving forward, the rupee is expected to maintain a slight positive bias, supported by positive global equities and a corrective trend in the greenback. However, potential fluctuations in crude oil prices, spurred by geopolitical tensions in the Middle East and selling pressure from foreign investors, could pose challenges for the rupee’s upward trajectory.

Meanwhile, the dollar index, measuring the greenback’s strength against a basket of six currencies, recorded a modest increase, trading at 104.15. In contrast, Brent crude futures, the global oil benchmark, witnessed a slight decline, falling to $81.77 per barrel.

As market dynamics continue to evolve, monitoring both domestic and international factors will be crucial in assessing the rupee’s performance and navigating currency fluctuations effectively. Investors and traders alike must remain vigilant and adaptable to capitalize on emerging opportunities in the foreign exchange market.

Stocks Highlights

Dr. Reddy’s Laboratories Ltd. witnessed a positive movement in its share price, increasing by 2.68% to reach Rs 6,321.00, outperforming its previous close. The company delivered a remarkable Return on Equity (ROE) of 19.35% in the fiscal year ending March 31, 2023, surpassing its 5-year average of 14.06%. Furthermore, its annual revenue growth of 16.78% exceeded its 3-year Compound Annual Growth Rate (CAGR) of 12.22%. Notably, the company has managed its expenses efficiently, allocating less than 1% of its operating revenues towards interest expenses and 18.84% towards employee costs.

In contrast, Coal India Ltd. experienced a decline in its share price, decreasing by -4.80% to Rs 434.30, compared to its previous close. Despite showing strong revenue growth with an annual revenue increase of 27.45%, surpassing its 3-year CAGR of 12.19%, the company faced challenges in managing its expenses. Similar to Dr. Reddy’s Laboratories Ltd., Coal India Ltd. allocated less than 1% of its operating revenues towards interest expenses. However, a higher percentage of 35.74% was allocated towards employee costs, indicating potential areas for optimization.

Advance Decline Ratio

Today, the advance-decline ratio was 0.22, and the market breadth was negative. The volatility index India Vix increased by 3.98 percent to settle at 16.06 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 472
Decliners – 2110
52Wk High –  132
52Wk Low – 40
High Band Hitters – 83
Low Band Hitters – 263
200d SMA – 19787
50d SMA – 21470
20d SMA – 21684

Top Gainers and Losers Stocks

The top gainers were Dr. Reddy (+2.68%), Apollo Hospitals (+2.60%), Divi’s Laboratories (+2.28%), Wipro (+2.18%), and HCL Technologies (+1.77%).

The top losers were Coal India (-4.80%), Hero MotoCorp (-4.27%), BPCL (-3.89%), ONGC (-3.66%), and Tata Steel (-2.69%).

Top Gainers and Losers Sector

The top gainers sector were IT (+0.79%), and Pharma (+0.28%).

The top losers sector were Media (-4.46%), Realty (-2.97%), Oil & Gas (-2.62%), Metal (-2.40%), and Financial Services (-1.41%).

SECTORS – NOTABLE ACTION
IT +0.79%
PHARMA +0.28%
MEDIA -4.46%
REALTY -2.97%
OIL & GAS -2.62%

Stocks Ban List

(SEBI) F&O ban list (INDUSTOWER open at -226.40 and close at -213.55), (ZEEL open at +206.00 and close at -187.90), (SAIL open at -134.25 and close at -122.75), (AUROPHARMA open at +1035.90 and close at +1018.65), (INDIACEM open at +247.45 and close at -235.15), (DELTACORP open at -141.65 and close at -137.85), (BALRAMCHIN open at -382.75 and close at -372.75), (ASHOKLEY open at -174.35 and close at -171.35), (BIOCON open at -275.10 and close at -266.70), (PNB open at +124.85 and close at -118.25), (HINDCOPPER open at -272.50 and close at -240.95), and (UPL open at -461.80 and close at +458.40) 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.

CANBK, ABFRL, PEL, BANDHANBNK, RBLBANK, TATACHEM, GMRINFRA, GNFC, ESCORTS, PVRINOX, and MANAPPURAM stocks has the possibilities of entrance in the ban list.

HINDCOPPER, and UPL stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21500 to 21800 is the Nifty 50 trading range.

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