Surviving the Market Meltdown Last-Hour Buying Rescues Nifty from Plummeting Below 19,350

At the close, the Nifty 50 was at 19,436.10 down by 0.47%

In recent days, equity markets have witnessed a persistent downward trajectory, resulting in consecutive losses that have pushed key indices to their lowest levels in over a month. This prolonged market weakness has triggered concerns among both investors and traders. Notably, the Nifty 50 index started the day on a feeble note, experiencing a decline of 0.47 percent and ultimately concluding in negative territory, breaching the critical support level of 19,450.

Throughout the trading session, the Nifty exhibited substantial volatility, oscillating between its highs and lows. Fortunately, it managed to rebound from the day’s lowest point before the closing bell, demonstrating resilience amid the challenging market conditions.

The current market sentiment remains bearish, with the Nifty persistently trading below crucial moving averages. This bearish outlook is exacerbated by robust US job data, reinforcing the Federal Reserve’s hawkish stance. Moreover, elevated US bond yields, reaching multi-year highs, are signaling an imminent interest rate hike, prompting global investors to adopt risk-averse strategies.

In the Indian market, despite a robust economy, the premium valuations of mid-cap stocks and recent rallies have fueled a period of consolidation. Sectors sensitive to interest rates, such as real estate, banking, and metals, have been notably affected. In contrast, the FMCG sector maintains cautious optimism, anticipating near-normal monsoon conditions and increased festival demand.

Amidst this volatile market environment, it is prudent to consider safer investment options in large-cap stocks, particularly within the auto sector, which is currently experiencing mixed growth numbers. Diversifying your investment portfolio and staying well-informed about global economic developments will prove essential in navigating these uncertain times.

Bank Nifty: Down by 0.98%

The recent performance of the Bank Nifty and BSE Sensex has garnered significant attention among investors. Both indices opened with a bearish tone, with the Bank Nifty experiencing a notable decline of 0.98 percent, closing at 43,964.05. Similarly, the BSE Sensex recorded a 0.44 percent drop, concluding at 65,226.04.

In the Bank Nifty, bearish sentiment has been prevalent, with bears maintaining control and causing the index to breach the crucial support level at 44,200. The breach of this support level is a cause for concern, as it signals increased selling pressure in the market.

Looking ahead, the immediate support level for the Bank Nifty is positioned at 43,800. A break below this level could potentially trigger aggressive selling, leading to a further 2% correction in the index.

In the recent sectorial performance analysis, the Information Technology (IT) sector displayed resilience, with an overall gain of 0.30%. Notable performers within this sector included Mphasis Ltd., which recorded a substantial gain of 2.24%, and Infosys Ltd., with a commendable gain of 1.08%.

Conversely, the Realty sector experienced a decline, emerging as the top loser with a decrease of 1.73%. Within this sector, Sobha Ltd. suffered a significant loss of -4.74%, followed closely by Macrotech Developers Ltd. with a decline of -4.62%.

FII/FPI activity saw a substantial sale value of Rs. 14,272.57 crore, outweighing their buy value of Rs. 9,848.55 crore. Consequently, FII/FPI net value stood at -Rs. 4,424.02 crore. This negative net value suggests that foreign institutional investors were net sellers during this period.

In contrast, DII activity demonstrated a more positive trend. DIIs purchased stocks worth Rs. 10,050.08 crore, while their sale value amounted to Rs. 8,280.59 crore. As a result, DII net value was a healthy Rs. 1,769.49 crore, indicating net buying by domestic institutional investors.

Bank Nifty

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

The gainers included HDFC Bank with a 1.59% increase. On the other hand, the biggest losers in the sector included Axis Bank with a 4.72% decline, Punjab National Bank with a 4.27% decline, State Bank of India with a 2.94% decline, IDFC First Bank with a 2.71% decline, and Bank of Baroda with a 2.59% decline. These results suggest that most of the banking stocks not performed better for the day.

Buzz

In the recent trading session, the Indian rupee displayed relative stability, remaining confined to a narrow trading range between 83.17 and 83.27. Several factors have influenced the rupee’s performance, both domestically and internationally.

One significant source of support for the rupee has been the decline in crude oil prices, which dropped from $95 to $88 per barrel. This drop in oil prices, driven by market factors, has contributed to preventing the rupee from slipping below the 83.40 mark.

Conversely, the rupee has faced headwinds due to the strengthening of the dollar index, which has appreciated by 1.20-1.50% over the past five days, reaching approximately $106.60. The robust trend in the dollar has exerted downward pressure on the rupee, keeping it below the 83.00 threshold.

Within the capital markets, there has been a noticeable weakness, marked by sustained selling by Foreign Institutional Investors (FII). This selling activity can be attributed to concerns about the prolonged period of higher interest rates in the United States, potentially discouraging investment inflows.

Given these dynamics, it is anticipated that the rupee will continue to trade within a range of 83.00 to 83.35, as market uncertainties persist. Monitoring global economic developments and their impact on currency markets will be essential for investors and traders navigating this challenging environment.

Buzzing

Adani Enterprises Ltd. witnessed a notable surge in its share price, rising by 3.23% from its previous closing price of Rs 2,387.25. The stock concluded the trading session at Rs 2,464.30. Impressively, the company’s annual revenue growth stands at a remarkable 96.18%, outperforming its 3-year Compound Annual Growth Rate (CAGR) of 45.79%. Over the last 18 years, only a mere 3.94% of trading sessions saw intraday declines higher than 5%, indicating robust performance and resilience.

Conversely, Axis Bank Ltd. experienced a decline of -4.72% in its share price from the previous closing price of Rs 1,041.05, settling at Rs 991.90. Nevertheless, Axis Bank has displayed strong fundamentals, with its gross Non-Performing Asset (NPA) percentage and Net NPA percentage consistently decreasing over the past 4 years to 2.02% and 0.39%, respectively. Additionally, the company’s annual revenue growth of 23.27% has outperformed its 3-year CAGR of 9.76%. Axis Bank also reported a YoY increase of 19.76% in advances, surpassing its 5-year CAGR of 11.38%. Remarkably, only 2.8% of trading sessions in the last 18 years witnessed intraday gains higher than 5% for Axis Bank, indicating steady performance in the face of market fluctuations.

Advance Decline Ratio

Today, the advance-decline ratio was 0.38, and the market breadth was negative. The volatility index India Vix decreased by 1.63 percent to settle at 11.60 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 669
Decliners – 1746
52Wk High –  83
52Wk Low – 20
High Band Hitters – 82
Low Band Hitters – 38
200d SMA – 18507
50d SMA – 19610
20d SMA – 19786

Top Gainers and Losers Stocks

The top gainers were Adani Enterprises (+3.23%), Nestle India (+3.03%), Eicher Motors (+1.63%), Hindustan Unilever (+1.61%), and HDFC Bank  (+1.59%).

The top losers were Axis Bank (-4.72%), SBIN (-2.94%), NTPC (-2.38%), IndusInd Bank (-2.33%), and Bajaj Auto (-2.20%).

Top Gainers and Losers Sector

The top gainers sector were IT (+0.30%), FMCG (+0.22%).

The top losers were Realty (-1.73%), Media (-1.72%), Pharma (-1.40%), Auto (-1.30%), and Metal (-1.06%).

SECTORS – NOTABLE ACTION
IT +0.30%
FMCG +0.22%
REALTY -1.73%
MEDIA -1.72%
PHARMA -1.40%

Stocks Ban List

(SEBI) F&O ban list  (IBULHSGFIN open at -181.00 and close at -169.95) 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.

DELTACORP, MCX, and MANAPPURAM stock has the possibilities of enterance in the ban list.

Daily Pivots

As per the above pivots data, 19350 to 19500 is the Nifty 50 trading range.

Read previous -Daily Insights- here
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Friday’s Market Rebound Global Trends Boost Equity Benchmark Indices
Market Rollercoaster From Negative to Near High in One Day
Trading in Silence Indian Benchmark Indices Close with a Whisper

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