Valuation Concerns Shake the Market Mid- and Small-Cap Indices Bear the Brunt

At the close, the Nifty 50 was at 21,782.50 up by 0.30%

Resilience Amidst Market Volatility The NSE Nifty 50 index embarked on a volatile journey today, starting with a green opening, dipping momentarily, and ultimately closing with a modest gain of 0.30%. This upward movement saw the Nifty surpassing the 21,750 mark, signaling resilience in the face of market fluctuations.

Mixed Sentiment in Equity Benchmarks Despite the Nifty’s marginal gains, equity benchmarks experienced a choppy trading day, with investors awaiting further triggers. The lack of clear directional cues and dashed hopes of an early rate cut by the Reserve Bank of India contributed to the subdued performance of domestic benchmark indices.

Mid and Small-Cap Indices Witness Decline Notably, mid and small-cap indices bore the brunt of market volatility, each dropping by 1%. High price tags in these segments prompted caution among investors, leading to a selloff and a decline in broader market sentiment.

Positive Rebound in Banking Stocks However, amidst the turbulence, banking stocks staged a rebound, contributing to the overall positive closure of the market. This recovery came after a previous session marked by significant sell-offs.

Caution Prevails Ahead of Key Economic Data Releases Looking ahead, caution prevails in the market as investors await crucial inflation data releases from the US, UK, and India. The impending data releases, coupled with concerns over global tensions and their potential impact on inflation, are key factors influencing market sentiment.

Bank Nifty: Up by 1.38%

The Bank Nifty initially opened in the red but rallied throughout the trading session, ultimately recording a notable increase of 1.38%. It closed in the green at 45,634.55, indicating positive momentum within the banking sector. Similarly, the BSE Sensex, while starting with a marginal gain of 0.23%, closed higher at a peak of 71,595.49.

The Bank Nifty’s upward trajectory showcases its resilience amidst market volatility, with financial institutions likely benefiting from favorable economic conditions and investor confidence.

In the sectorial front, the financial services sector experienced a notable increase of 0.69% in recent trading sessions. Notably, State Bank of India surged by an impressive 3.70%, demonstrating robust performance, closely followed by ICICI Bank Ltd. with a gain of 2.19%. Conversely, the metal sector encountered a downturn, witnessing a decline of 1.54%. Companies within this sector, such as Ratnamani Metals & Tubes Ltd. and Hindustan Copper Ltd., experienced losses of -7.92% and -6.67% respectively.

Foreign Institutional Investors (FII/FPI) engaged in buying activities amounting to Rs. 13,946.46 crore, while their sales amounted to Rs. 13,804.51 crore. Consequently, their net value stands at Rs. 141.95 crore. On the other hand, Domestic Institutional Investors (DII) bought securities worth Rs. 12,090.82 crore, while their sales totaled Rs. 12,512.69 crore. This results in a net value deficit of Rs. -421.87 crore for DIIs.

Bank Nifty

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

The gainers included Bank of Baroda with a 5.04% increase, State Bank of India with a 3.70% increase, ICICI Bank with a 2.19% increase, Axis Bank with a 1.61% increase, and AU Bank with a 1.41% increase. On the other hand, the biggest losers in the sector included Punjab National Bank with a 0.32% decline. These results suggest that most of the banking stocks performed better for the day.

Indian Rupee Depreciates Against US Dollar

The Indian rupee experienced a depreciation of 7 paise, settling at 83.03 (pro) against the US dollar on Friday. This decline can be attributed to the strength of the American currency and elevated crude oil prices in the international market.

Factors Influencing Rupee Movement Foreign fund outflows exerted downward pressure on the Indian rupee. However, the rupee found some support from positive domestic market sentiments.

Interbank Exchange Performance At the interbank foreign exchange market, the rupee commenced trading at 82.96 and concluded at 83.03 (pro) against the dollar, marking a 7 paise decrease from its previous close.

Policy Rate Decision Impact The previous day, the rupee had maintained a flat position at 82.96 against the US dollar following the Reserve Bank’s decision to keep the key policy rate unchanged for the sixth consecutive time, aimed at closely monitoring inflationary trends.

Global Economic Indicators The dollar index, which measures the strength of the greenback against a basket of six currencies, showed a marginal decrease of 0.01% at 104.15. Meanwhile, Brent crude futures, the global oil benchmark, recorded a slight increase of 0.22%, reaching $81.81 per barrel.

Stocks Highlights

Grasim Industries Ltd. Shows Strong Performance

Grasim Industries Ltd. witnessed a notable increase of 5.92% in its share price, rising from its previous close of Rs 2,057.30 to Rs 2,179.05. The company’s annual revenue growth of 25.61% has surpassed its 3-year compounded annual growth rate (CAGR) of 16.61%, indicating robust performance.

Bearish Signals Emerge Despite the positive price movement, a sell signal has been triggered with bears taking control, as indicated by the 50-day moving average crossover observed yesterday. Historical data suggests an average price decline of -4.12% within 30 days of this signal over the past 5 years.

Mahindra & Mahindra Ltd. Faces Price Decline

In contrast, Mahindra & Mahindra Ltd. experienced a decline of -2.46% in its share price, falling from its previous close of Rs 1,685.90 to Rs 1,644.45. However, the company has shown strong financial performance, with a return on equity (ROE) of 18.24% in the fiscal year ending March 31, 2023, surpassing its 5-year average of 10.72%.

Positive Revenue Growth Amid Bearish Trend Mahindra & Mahindra Ltd. has also outperformed its 3-year revenue CAGR, with an annual revenue growth of 34.43% compared to a 16.85% CAGR. Despite these positive fundamentals, a bearish trend is anticipated, signaled by a 5-day moving average crossover observed yesterday. Historical data suggests an average price decline of -2.43% within 7 days of this signal over the past 5 years.

Advance Decline Ratio

Today, the advance-decline ratio was 0.46, and the market breadth was negative. The volatility index India Vix decreased by 2.40 percent to settle at 15.45 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 798
Decliners – 1731
52Wk High –  159
52Wk Low – 23
High Band Hitters – 74
Low Band Hitters – 173
200d SMA – 19768
50d SMA – 21441
20d SMA – 21698

Top Gainers and Losers Stocks

The top gainers were Grasim (+5.92%), SBIN (+3.70%), Apollo Hospitals (+3.25%), Sun Pharmaceutical (+2.80%), and ICICI Bank (+2.19%).

The top losers were M&M (-2.46%), Bharti Airtel (-1.94%), NTPC (-1.87%), ONGC (-1.85%), and Tata Steel (-1.64%).

Top Gainers and Losers Sector

The top gainers sector were Financial Services (+0.69%), Pharma (+0.52%), FMCG (+0.41%), and Consumer Durables (+0.23%).

The top losers sector were Metal (-1.54%), Oil & Gas (-1.39%), IT (-0.40%), Auto (-0.37%), and Media (-0.26%).

SECTORS – NOTABLE ACTION
FINANCIAL SERVICES +0.69%
PHARMA +0.52%
FMCG +0.41%
METAL -1.54%
OIL & GAS -1.39%
IT -0.40%

Stocks Ban List

(SEBI) F&O ban list (INDUSTOWER open at +228.90 and close at -226.15), (SAIL open at -139.25 and close at -133.65), (BIOCON open at -280.95 and close at -273.40), (INDIACEM open at -238.50 and close at +247.20), (PNB open at -124.50 and close at -123.90), (DELTACORP open at -144.85 and close at -140.85), (BALRAMCHIN open at -392.00 and close at -383.10), (AUROPHARMA open at +1012.60 and close at +1003.15), (ASHOKLEY open at -176.10 and close at -173.45), (HINDCOPPER open at -289.60 and close at -270.15), (UPL open at -467.90 and close at -457.95), and (NATIONALUM open at -160.85 and close at -157.50) 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.

CANBK, TATACHEM, PEL, RBLBANK, ABFRL, GNFC, GMRINFRA, BANDHANBNK, PVRINOX, and MANAPPURAM stocks has the possibilities of entrance in the ban list.

UPL, and NATIONALUM stock has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 21650 to 21900 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Nifty Plunges Following RBI’s Rate Announcement
RBI MPC’s Cues Awaited as Nifty Loses Early Gains on Profit Booking
Indian Equity Benchmarks Finish Strong Despite Fed Rate Cut Delay

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