Struggle for Direction

Struggle for Direction

RBI raised the repo rate by 50 bps to 4.90 per cent. There was no change in the cash reserve ratio (CRR), which is positive for the banking stocks. Today, the market started with a gap up, stayed volatile, moved between positive and negative territories before closing in the red for the fourth consecutive day. The struggle for direction continues.

In the economic headlines, the World Bank has cut the GDP forecast for India for the second time to 7.5 per cent for FY 2023. Earlier, Moody’s has reduced the GDP projections to 8.8 per cent for the calendar year 2022. Similarly, S&P has also cut GDP projection for 2022-23 to 7.3 per cent.

The Nifty 50 was down 60 points or 0.37 per cent before closing at 16356. Further, it recorded an intraday high of 16514 and a low of 16293. The range between high and low price was minimum in the last seven days (NR7). However, Nifty 50 stayed above the 20-day simple moving average.

The market breadth was negative, and the advance-decline ratio was 0.73. Further, the volatility index was down by 2.87 per cent and closed at 19.84.

NIFTY – DAILY MARKET ACTION
Advancers – 900
Decliners – 1232
52Wk High – 14
52Wk Low – 51
High Band Hitters – 65
Low Band Hitters – 52
200d SMA – 17267
50d SMA – 16825
20d SMA – 16261

Top Gainers and Losers

Tata Steel, SBI, Titan, Drreddy’s, NTPC, and BPCL were the top gainers on the Nifty 50, gaining between 1 per cent and 1.7 per cent. Drreddy’s was down 3.85 per cent yesterday.

TOP GAINERS
TATASTEEL +1.66%
SBIN +1.64%
TITAN +1.39%
DRREDDY+1.34%
BPCL+1.17%

Meanwhile, Bharti Airtel, ITC, Reliance, UPL, and Asian Paints were the top losers on the Nifty 50, losing between 1.5 per cent and 3 per cent.
View the list of all the Nifty 50 contributors.

TOP LOSERS
BHARTIARTL -2.98%
ITC -2.23%
RELIANCE -1.83%
UPL -1.77%
ASIANPAINT -1.51%

Struggle for direction –Sectors & Broader Indices

On the sectoral front, it was a mixed day. The Nifty realty, media, IT, and Pharma were the gainers. Meanwhile, FMCG, Consumer durables, and Oil & gas were losers.

Likewise, the broader indices were also down marginally. Nifty Midcap 50 was down 0.21 per cent, and Small-cap 50 was down 0.01 per cent.

Nifty Sectors – Notable Action
REALTY +1.89%
MEDIA +1.49%
IT +0.41%
FMCG -1.05%
OIL & GAS -0.92%
CONSUMER DURABLES -0.55%

Looking Ahead – struggle for direction

At least now, there is some certainty about the interest rates until the RBI’s upcoming monetary policy committee (MPC) meeting. It appears the market took solace in this and moved down only marginally. However, another top economic headline news waiting in queue is US inflation data scheduled on Friday.

As noted in earlier blog, the first hurdle or resistance to cross is 16600, followed by the 16700 level. 16250 to 16500 is the Nifty trading range for tomorrow.

Daily Pivots

Read our previous -Daily Insights- here
Risk-on or Risk-off?
Nifty above 16600. Buy or sell?
Is there any clear trend?

Why the market was down today, if the RBI’s action was in line with everyone’s expectations? The inflation, supply chain constraints and geopolitical headwinds are as is and not expected to change dramatically during the rest of the week. The struggle for market direction may continue further.

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