Selling Pressure Ends Three-Day Winning Streak, Nifty Drops Below 22,000

At the close, the Nifty 50 was at 22,004.70 down by 0.42%

The NSE Nifty 50 commenced its trading day on a negative note, declining by 0.42% and maintaining a downward trend till closing. With the index hovering below the 22,050 mark, the market’s three-day winning streak was disrupted, primarily influenced by selling pressure in the Media, Information Technology, and Banking sectors. Amidst heightened volatility, the benchmark indices witnessed a decline, with the Nifty closing at 22,004.70, down by 92.05 points or 0.42%.

Despite an initial intraday recovery driven by buying interest in Realty, Oil & Gas, Consumer Durables, and Metal stocks, the market sentiment remained subdued, eventually settling near the day’s low due to continued selling pressure in major Media, IT, and Banking stocks. The sideways movement observed throughout the trading session reflected investor perplexity during the holiday-shortened week.

However, amidst this consolidation, the short-term trend remained positive as the index closed above critical moving averages on the daily chart. The tepid performance of domestic benchmark indices aligned with global market trends, as investors booked profits amid a weak global market sentiment. Asian markets, in particular, reversed early gains, mirroring a pause in the global rally driven by optimism over Fed rate cut outlook.

Looking ahead, market participants are poised to navigate through volatility, with key data releases such as US GDP and inflation providing insights into future rate cut trajectories. Additionally, the truncated fiscal year-end week, combined with reduced trading volumes and monthly expiry, are anticipated to contribute to market fluctuations.

While midcaps exhibit resilience following a consolidation period, the IT sector continues to grapple with sluggishness attributed to weak global IT spending forecasts. These dynamics underscore the importance of vigilance and strategic decision-making amidst evolving market conditions.

Bank Nifty: Down by 0.56%

The Bank Nifty and BSE Sensex both began the trading session on a downward trajectory, with the Bank Nifty opening in the red and declining by 0.56%. This downward trend persisted throughout the day, with the Bank Nifty closing at 46,600.20, maintaining its position in the red. Similarly, the BSE Sensex followed suit, experiencing a decline of 0.50% and settling at a low of 72,470.30, also closing in the red.

In the sectorial front, the real estate sector has surged by 1.57%, showcasing a notable upward trend. Leading this growth are key players such as The Phoenix Mills Ltd., witnessing a substantial gain of 5.89%, followed closely by Prestige Estates Projects Ltd. with a commendable 4.13% increase in their stock value. However, on the flip side, the media sector has experienced a downturn, recording a decline of 1.66%. Among the notable losers in this sector are Dish TV India Ltd., marking a significant loss of -3.64%, and Nazara Technologies Ltd. with a downturn of -3.11%.

Foreign Institutional Investors (FII/FPI) engaged in trading activities with a buy value of Rs. 22,714.11 crore and a sale value of Rs. 22,703.98 crore, resulting in a marginal net value of Rs. 10.13 crore. Conversely, Domestic Institutional Investors (DII) participated in the market with a buy value of Rs. 14,130.31 crore and a sale value of Rs. 9,105.95 crore, leading to a net value of Rs. 5,024.36 crore.

Bank Nifty

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

The gainers included Punjab National Bank with a 1.10% increase, Axis Bank with a 0.94% increase, Bank of Baroda with a 0.58% increase, IndusInd Bank with a 0.52% increase, and Federal Bank with a 0.10% increase. On the other hand, the biggest losers in the sector included HDFC Bank with a 1.24% decline, Kotak Bank with a 1.09% decline, State Bank of India with a 0.66% decline, ICICI Bank with a 0.63% decline, and AU Bank with a 0.45% decline. These results suggest that some of the banking stocks performed better for the day.

Rupee Recovers Against US Dollar Amidst Positive Market Sentiment

The Indian rupee showcased resilience, rebounding from its recent all-time low, appreciating by 33 paise to close at 83.28 against the US dollar. This upward trajectory was fueled by a decline in the US dollar and favorable performance of Asian currencies. However, despite these gains, the rupee’s ascent was tempered by weak domestic markets and a surge in crude oil prices.

Throughout the trading day, the local unit exhibited volatility, opening at 83.33 and fluctuating between an intra-day high of 83.26 and a low of 83.37, before settling at 83.28 against the dollar. This marks a notable improvement from its previous close, reflecting positive market sentiment.

The rupee’s recent depreciation to an all-time low of 83.61 against the US dollar on Friday had raised concerns. However, robust forex reserves provide a buffer, empowering the Reserve Bank to mitigate downside risks associated with the currency.

Looking ahead, the rupee may face downward pressure amid expectations of a US dollar recovery and escalating crude oil prices. Nevertheless, support from buoyant Asian currencies and potential intervention by the RBI through dollar selling could bolster the local unit. Traders are advised to monitor key economic indicators from the US, such as durable goods orders and CB consumer confidence data, for insights into market trends.

Meanwhile, the dollar index softened by 0.12% to 104.10, influenced by declining US treasury yields and profit booking at higher levels. Additionally, Brent crude futures edged lower to $86.65 per barrel, further shaping market dynamics and influencing currency movements.

Stocks Highlights

Bajaj Finance Ltd. witnessed a positive movement in its share price, rising by 2.43% from its previous close of Rs 6,760.90 to Rs 6,925.00. Notably, the company’s annual revenue growth of 30.86% has outpaced its 3-year compounded annual growth rate (CAGR) of 16.03%. However, in terms of stock returns compared to Nifty 100, Bajaj Finance delivered a 3-year return of 30.44%, trailing behind Nifty 100’s return of 54.67%.

Analysis of expenses reveals that the company allocated 30.34% of its operating revenues towards interest expenses and 12.22% towards employee costs in the fiscal year ending 31 Mar, 2023. Despite a positive trajectory, Bajaj Finance’s returns fall short when compared to Nifty Financial Services, where it yielded 30.44% against Nifty Financial Services’ 32.23% over a 3-year period.

Contrastingly, Bharti Airtel Ltd. experienced a decline in its share price, dropping by -1.97% from its previous close of Rs 1,236.10 to Rs 1,211.75. Despite this, the company’s annual revenue growth of 19.64% surpassed its 3-year CAGR of 15.94%. In terms of stock returns, Bharti Airtel demonstrated impressive performance, offering a 3-year return of 136.57% compared to Nifty 100’s return of 54.67%.

Expense analysis indicates that Bharti Airtel allocated 13.87% of its operating revenues towards interest expenses and 3.47% towards employee costs in the fiscal year ending 31 Mar, 2023. Additionally, the stock outperformed S&P BSE Telecommunication, generating a return of 136.57% against the index’s 89.09% return over a 3-year period.

Advance Decline Ratio

Today, the advance-decline ratio was 0.49, and the market breadth was negative. The volatility index India Vix increased by 4.90 percent to settle at 12.82 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 859
Decliners – 1742
52Wk High –  55
52Wk Low – 50
High Band Hitters – 117
Low Band Hitters – 149
200d SMA – 20363
50d SMA – 21948
20d SMA – 22162

Top Gainers and Losers Stocks

The top gainers were Bajaj Finance (+2.43%), Hindalco (+2.22%), Adani Ports (+1.83%), Britannia (+1.76%), and NTPC (+1.52%).

The top losers were Bharti Airtel (-1.97%), Power Grid (-1.90%), Eicher Motors (-1.74%), Wipro (-1.48%), and Divi’s Laboratories (-1.32%).

Top Gainers and Losers Sector

The top gainers sector were Realty (+1.57%), Oil & Gas (+0.73%), Consumer Durables (+0.46%), and Metal (+0.37%).

The top losers sector were Media (-1.66%), IT (-0.62%), Financial Services (-0.37%), FMCG (-0.16%), and Auto (-0.04%).

SECTORS – NOTABLE ACTION
REALTY +1.57%
OIL & GAS +0.73%
CONSUMER DURABLES +0.46%
MEDIA -1.66%
IT -0.62%
FINANCIAL SERVICES -0.37%

Stocks Ban List

(SEBI) F&O ban list (SAIL open at +129.00 and close at +130.60), (TATACHEM open at +1051.00 and close at +1087.05), (ZEEL open at +142.70 and close at -139.25), and (BIOCON open at +254.20 and close at +257.70) 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.

NATIONALUM, HINDCOPPER, INDIACEM, BANDHANBNK, IDEA, ABFRL, MANAPPURAM, and NMDC stocks has the possibilities of entrance in the ban list.

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

Daily Pivots

As per the above pivots data, 21900 to 22100 is the Nifty 50 trading range.

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Nifty Tumbles Below 21,850 in Face of Widespread Selling Activity

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