Selling Pressure Hits Market as IT Giants See Lower Demand

At the close, the Nifty 50 was at 19,751.05 down by 0.22%

The Indian stock market faced significant headwinds on October 13, as IT giants grappled with diminishing demand outlook, contributing to a bearish sentiment. NSE Nifty 50 opened on a weak note, declining by 0.22 percent and closing in the red, slipping below the crucial 19800 mark. These market dynamics are indicative of the challenges that investors and traders are currently navigating.

IT Sector Blues and Banking Underperformance The recent downturn in IT majors, coupled with underwhelming performance in the banking sector, has cast a shadow on market sentiment. These sectors play pivotal roles in shaping market direction, making it challenging to predict market movements in their absence.

External Influences and Sentiment External factors like the weak revenue guidance in the IT sector and the surge in crude oil prices have further dampened sentiment. The slightly higher than anticipated US inflation data disrupted the positive trend seen earlier in the week, primarily due to a less hawkish stance from the US Federal Reserve.

Bright Spots Amidst Uncertainty In the midst of this uncertainty, some optimism shines through, stemming from domestic factors such as a significant drop in domestic inflation, robust industrial production data, and promising Q2 earnings expectations.

Bank Nifty: Down by 0.70%

On the trading front, the Bank Nifty faced a challenging day, commencing in the red and ultimately closing down by 0.70 percent, ending at 44,287.95. Similarly, the BSE Sensex experienced a marginal dip of 0.19 percent, concluding in negative territory at 66,282.74. These fluctuations underscore the intricacies of market dynamics.

Within the sectorial landscape, the Auto sector emerged as a standout performer, recording a substantial gain of 0.88 percent. Notably, Tata Motors Ltd. exhibited remarkable strength with an impressive surge of 4.73 percent, while Tube Investments Of India Ltd. also contributed to the sector’s success, gaining 1.54 percent. Conversely, the Media sector faced challenges, marking a decline of 1.18 percent. Within this sector, Dish Tv India Ltd. and Hathway Cable & Datacom Ltd. both experienced losses of -2.39 percent.

Foreign Institutional Investors (FII/FPI) played an active role in the market, with a buy value of 10,317.87 Rs. Cr. and a sale value of 10,000.86 Rs. Cr., resulting in a net value of 317.01 Rs. Cr. On the other hand, Domestic Institutional Investors (DII) reported a buy value of 7,660.98 Rs. Cr. and a sale value of 7,763.86 Rs. Cr., culminating in a net value of -102.88 Rs. Cr.

Bank Nifty

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

The gainers included IndusInd Bank with a 2.44% increase, Federal Bank with a 0.17% increase. On the other hand, the biggest losers in the sector included Bandhan Bank with a 4.82% decline, Axis Bank with a 2.40% decline, Bank of Baroda with a 1.95% decline, State Bank of India with a 1.68% decline, and HDFC Bank with a 1.05% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

Rupee’s Decline Amidst Global and Domestic Pressures

The Indian rupee faced challenges, depreciating by 2 paise to settle at 83.26 (pro) against the US dollar. Several factors contributed to this decline, including surging crude oil prices on the global front and a downward trend in the domestic equities.

Despite positive macroeconomic data, the local currency struggled to gain momentum. The rupee has been under sustained pressure due to the prevailing strength of the US dollar and a continuous withdrawal of foreign funds from Indian markets.

At the interbank foreign exchange, the rupee initiated trading at 83.25 and maintained a narrow trading range before closing at 83.26 (pro) against the US dollar. This closing figure marked a minor 2 paise decrease from its previous Thursday closing level.

Government data released on Thursday revealed promising insights into the Indian economy. Retail inflation in India moderated to a three-month low of 5 percent in September, while factory output for August surged to a 14-month high of 10.4 percent. These indicators underscore the complex dynamics at play in the financial markets.

The global oil benchmark, Brent crude futures, witnessed a significant uptick of 2.97 percent, reaching $88.55 per barrel. This rise in crude oil prices on the global stage had a notable impact on the rupee’s performance, further accentuating the challenges faced by the Indian currency.

Buzzing

Tata Motors Ltd. witnessed a notable surge in its share price, rising by 4.73% from its previous close at Rs 636.95, with the stock’s last traded price resting at Rs 667.10. This impressive performance is further underscored by the company’s annual revenue growth, which stands at an outstanding 24.54%, outperforming its 3-year CAGR of 9.81%. Notably, the company allocated 2.96% of its operating revenues to interest expenses and 9.73% towards employee costs for the fiscal year ending on March 31, 2023.

Conversely, Axis Bank Ltd. faced a modest decline, with its share price decreasing by -2.40% from the previous close of Rs 1,018.45, settling at a last traded price of Rs 994.05. It’s worth noting that a 20-day moving crossover signal appeared recently, historically leading to an average price decline of -2.54% within 7 days. Despite this, the company has maintained robust annual revenue growth at 23.27%, surpassing its 3-year CAGR of 9.76%. Furthermore, Axis Bank Ltd. reported a YoY increase of 19.76% in advances, surpassing its 5-year CAGR of 11.38%. Interestingly, only 2.3% of trading sessions in the last 18 years saw intraday declines higher than 5%, reflecting the bank’s stability in fluctuating markets.

Advance Decline Ratio

Today, the advance-decline ratio was 0.90, and the market breadth was negative. The volatility index India Vix increased by 0.72 percent to settle at 10.62 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1127
Decliners – 1257
52Wk High –  119
52Wk Low – 10
High Band Hitters – 111
Low Band Hitters – 42
200d SMA – 18554
50d SMA – 19607
20d SMA – 19734

Top Gainers and Losers Stocks

The top gainers were Tata Motors (+4.73%), HCL Technologies (+2.72%), IndusInd Bank (+2.44%), Tata Consumer (+2.15%), and Nestle India  (+2.06%).

The top losers were Axis Bank (-2.40%), Adani Enterprises (-2.29%), Infosys (-2.23%), SBIN (-1.68%), and Wipro (-1.46%).

Top Gainers and Losers Sector

The top gainers sector were Auto (+0.88%), Realty (+0.43%), Pharma (+0.32%), and FMCG (+0.30%).

The top losers sector were Media (-1.18%), Metal (-0.62%), IT (-0.61%), Financial Services (-0.59%), and Consumer Durables (-0.17%).

SECTORS – NOTABLE ACTION
AUTO +0.88%
REALTY +0.43%
PHARMA +0.32%
MEDIA -1.18%
METAL -0.62%
IT -0.61%

Stocks Ban List

(SEBI) F&O ban list (DELTACORP open at -140.90 and close at -140.00), (BALRAMCHIN open at -415.75 and close at +416.80), (SUNTV open at +640.00 and close at -633.50), (SAIL open at -88.75 and close at -88.90), (BHEL open at -129.95 and close at -128.35), (INDIACEM open at -227.20 and close at -223.05), (HINDCOPPER open at -155.00 and close at -157.05), (IBULHSGFIN open at -174.85 and close at -171.65), (MANAPPURAM open at -146.00 and close at -145.55), (PNB open at -75.10 and close at -75.20), and (L&TFH open at -133.25 and close at -133.60) 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.

METROPOLIS, NMDC, RBLBANK, ESCORTS, GNFC, CHAMBLFERT, and MCX stock has the possibilities of enterance in the ban list.

MANAPPURAM, PNB, and L&TFH stock has the possiblities of exit from ban list.

Daily Pivots

As per the above pivots data, 19640 to 19840 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Tech Stocks Tumble Nifty’s Impressive Run Meets a Roadblock
Market Soars with Steady Gains Sector-Wide Buying Keeps Momentum Alive
Market Bounces Back as Dollar and Treasury Yields Take a Dive

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