RBI MPC’s Cues Awaited as Nifty Loses Early Gains on Profit Booking

At the close, the Nifty 50 was at 21,930.50 up by 0.01%

In today’s trading session, the NSE Nifty 50 exhibited a promising start with a slight uptick of 0.01 percent. Despite intermittent fluctuations, the index managed to uphold its upward trend, closing positively. Surpassing the significant threshold of 21,900, the Nifty concluded the day at 21,930.50, marking a modest gain of 1.1 points.

Initial optimism was tempered as investors opted to secure profits, leading to a subdued performance by the day’s end. Despite briefly breaching the 22,000 level, sustaining momentum proved challenging, reflecting a sense of caution among market participants.

The impending Reserve Bank of India (RBI) monetary policy announcement scheduled for February 8 looms large, with investors eagerly awaiting guidance. While expectations lean towards a status quo, market sentiment hinges on the central bank’s forward-looking statements, especially regarding potential rate adjustments.

Amidst prevailing uncertainties, the enduring resilience of the bull market is noteworthy, with indices showcasing resilience amid fluctuations. This underscores the effectiveness of the ‘buy on dips’ strategy, reinforced by consistent positive sessions led by banking majors and Reliance Industries.

However, concerns persist regarding speculative activity in lower-tier stocks, where rapid price escalation has become prevalent. As new market leaders emerge, signaling continuity in the uptrend, caution is advised to mitigate risks associated with speculative fervor.

Bank Nifty: Up by 0.28%

The Bank Nifty maintained a positive trajectory, commencing the day with gains and recording a modest increase of 0.28 percent. This upward trend persisted, culminating in a green closure at 45,818.50. Conversely, the BSE Sensex faced a minor setback, experiencing a marginal decline of 0.05 percent and closing in the red at 72,152.00.

In the sectorial landscape, the real estate sector emerged as a frontrunner, witnessing a substantial gain of 1.84 percent. Notably, The Phoenix Mills Ltd. saw a significant surge of 4.14 percent, while DLF Ltd. also demonstrated a commendable increase of 3.46 percent. However, the IT sector encountered a downturn, experiencing a notable decline of 1.25 percent. Within this domain, Tech Mahindra Ltd. recorded a considerable loss of -2.67 percent, while Infosys Ltd. witnessed a downturn of -1.99 percent.

Foreign Institutional Investors (FIIs/FPIs) engaged in the Indian market with a buy value of Rs. 14,534.64 crore and a sale value of Rs. 16,225.66 crore, resulting in a net value of -Rs. 1,691.02 crore. Conversely, Domestic Institutional Investors (DIIs) witnessed a buy value of Rs. 12,012.32 crore and a sale value of Rs. 11,684.59 crore, yielding a net value of Rs. 327.73 crore.

Bank Nifty

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

The gainers included State Bank of India with a 4.19% increase, Axis Bank with a 2.09% increase, Punjab National Bank with a 2.05% increase, Federal Bank with a 1.63% increase, and Kotak Bank with a 0.78% increase. On the other hand, the biggest losers in the sector included Bank of Baroda with a 1.52% decline, HDFC Bank with a 0.98% decline, Bandhan Bank with a 0.66% decline, and ICICI Bank with a 0.35% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Appreciates Against US Dollar Amidst Correction and Foreign Inflows

On Wednesday, the Indian rupee exhibited resilience, appreciating by 9 paise to conclude at 82.96 (pro) against the US dollar. This positive movement was primarily attributed to a correction observed in the greenback against major currencies, coupled with fresh inflows of foreign capital into the Indian market.

Despite these gains, the appreciation of the domestic unit was tempered by a surge in crude oil prices and subdued performance in domestic markets. The rise in oil prices typically exerts pressure on the rupee due to India’s significant reliance on oil imports, while muted domestic market sentiment also contributed to limiting the rupee’s sharp ascent.

During the trading session, the rupee fluctuated within a range, opening at 83.03 against the US dollar, reaching an intraday high of 82.94, and touching a low of 83.09. Ultimately, it settled at 82.96 (pro), marking a 9-paise increase from its previous close of 83.05.

In global currency markets, the dollar index, measuring the greenback’s strength against a basket of six currencies, experienced a slight decline, trading 0.17 percent lower at 104.04. Concurrently, Brent crude futures, the international oil benchmark, registered a modest uptick of 0.52 percent, reaching $79 per barrel.

As the rupee continues to navigate fluctuating global trends and domestic economic indicators, market participants remain attentive to developments impacting currency valuations, including geopolitical dynamics, monetary policies, and commodity price movements.

Stocks Highlights

State Bank of India Shows Strong Performance Amidst Loan Book Growth

The share price of State Bank of India (SBI) surged by 4.19%, reaching Rs 677.50 from its previous close of Rs 650.25. Notably, SBI reported a significant year-on-year increase of 16.96% in its advances, surpassing its five-year compounded annual growth rate (CAGR) of 7.97% in loan book expansion. Moreover, the net profit per employee has demonstrated a consistent uptrend, experiencing a notable growth of 64.22% over the past year.

Contrastingly, Tech Mahindra Ltd. witnessed a decline in its share price, dropping by -2.67% to Rs 1,315.00 from its previous close of Rs 1,351.05. Despite this, the company’s performance metrics reveal some notable aspects. For instance, Tech Mahindra Ltd. experienced intraday gains exceeding 5% in only 2.15% of trading sessions over the last 17 years. Furthermore, the company’s annual revenue growth of 18.57% has outpaced its three-year CAGR of 12.41%, showcasing robust revenue expansion. Additionally, Tech Mahindra Ltd. allocated less than 1% of its operating revenues towards interest expenses, while 51.96% was directed towards employee costs for the fiscal year ending on March 31, 2023.

Advance Decline Ratio

Today, the advance-decline ratio was 1.30, and the market breadth was positive. The volatility index India Vix decreased by 1.77 percent to settle at 15.51 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1436
Decliners – 1102
52Wk High –  293
52Wk Low – 12
High Band Hitters – 189
Low Band Hitters – 48
200d SMA – 19727
50d SMA – 21370
20d SMA – 21687

Top Gainers and Losers Stocks

The top gainers were SBIN (+4.19%), Grasim (+2.38%), HDFC Life (+2.24%), JSW Steel (+2.17%), and Axis Bank (+2.09%).

The top losers were Tech Mahindra (-2.67%), Power Grid (-2.50%), Infosys (-1.99%), Adani Ports (-1.32%), and TCS (-1.23%).

Top Gainers and Losers Sector

The top gainers sector were Realty (+1.84%), Media (+1.20%), Metal (+0.47%), Pharma (+0.42%), and Financial Services (+0.38%).

The top losers sector were IT (-1.25%).

SECTORS – NOTABLE ACTION
REALTY +1.84%
MEDIA +1.20%
METAL +0.47%
IT -1.25%

Stocks Ban List

(SEBI) F&O ban list (INDUSTOWER open at +224.00 and close at +225.65), (ASHOKLEY open at -182.95 and close at -177.80), (INDIACEM open at +243.00 and close at -239.70), (HINDCOPPER open at +301.10 and close at -295.95), (UPL open at +484.00 and close at -477.80), (NATIONALUM open at +165.00 and close at -161.15), and (ZEEL open at +178.15 and close at +182.35) 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.

TATACHEM, SAIL, BALRAMCHIN, PNB, RBLBANK, PEL, and GMRINFRA stocks has the possibilities of entrance in the ban list.

ZEEL stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21800 to 22100 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Indian Equity Benchmarks Finish Strong Despite Fed Rate Cut Delay
Nifty Dips Below 21,800, Market Fails to Sustain Gains
Nifty Hits All-Time High as Oil & Gas Sector Shines, Banks Lag Behind

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