Volatility Persists as Nifty Hovers Around 20,000-Mark

At the close, the Nifty 50 was at 19,993.20 down by 0.02%

In today’s financial markets, the trading session began with a strong opening, marked by a gap-up start. However, as the day progressed, the market witnessed substantial fluctuations and notable volatility, especially with the Nifty index hovering around the critical 20,000-point threshold.

Despite the initial optimism, the NSE Nifty 50 index commenced on a positive note but ultimately closed in negative territory, registering a marginal decline of 0.02 percent. This slight dip in performance was observed across the board, as benchmark indices displayed minimal changes throughout the day.

It is essential to highlight that the overall market sentiment remained cautious, with selling pressure evident across various sectors, except for the Information Technology sector, which managed to maintain its stability.

Investors demonstrated reluctance to initiate fresh bullish positions, largely due to the impending release of crucial US Consumer Price Index (CPI) data scheduled for tomorrow. The outcome of this data release holds the potential to exert a significant influence on the future course of the Federal Reserve’s monetary policy.

Following an impressive streak of seven consecutive sessions of gains, today’s trading session signaled the onset of a cooling-off period. Early trades were characterized by heightened volatility, but the market eventually settled into a range-bound pattern. Investor caution was further underscored by the lackluster performance in other Asian and European markets, prompting selective profit-taking activities.

Bank Nifty: Down by 0.13%

The Bank Nifty commenced the day on a positive note, initially gaining ground, but eventually closed in negative territory with a decline of 0.13 percent, settling at 45,511.35. In contrast, the BSE Sensex followed a divergent path, opening the day with a 0.14 percent gain and concluding in positive territory, reaching a peak of 67,221.13.

This shift in market dynamics follows a week marked by significant upward momentum, during which both indices exhibited strong bullish trends. However, as the trading session unfolded, selling pressure emerged as prices reached higher levels, leading to some profit-taking activities among investors.

An interesting development to note is the surge in open interest at the 46,000CE strike for the Bank Nifty. This increase suggests that call writers, or option sellers, strategically positioned themselves at this specific strike price, indicating their anticipation of resistance or a potential price ceiling around the 46,000 level for the Bank Nifty. This development may impact market sentiment and influence trading strategies in the coming days, as investors closely monitor these critical levels for further price action.

In terms of sector performance, the Information Technology (IT) sector stood out with remarkable gains, surging by 1.03 percent. Within this sector, Tata Consultancy Services Ltd. (TCS) delivered an impressive gain of 2.64 percent, showcasing strong performance. Infosys Ltd. also made a positive contribution with a gain of 1.66 percent.

Conversely, the Media sector experienced significant losses, declining by 4.30 percent. Within this sector, Dish TV India Ltd. faced a substantial loss of -9.67 percent, signaling a challenging day for the company. Tv18 Broadcast Ltd. also recorded a noteworthy loss of -8.70 percent.

Bank Nifty

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

The gainers included ICICI Bank with a 1.16% increase, HDFC Bank with a 0.26% increase, and Kotak Bank with a 0.21% increase. On the other hand, the biggest losers in the sector included Bandhan Bank with a 4.57% decline, Federal Bank with a 4.00% decline, Punjab National Bank with a 3.76% decline, IDFC First Bank with a 3.16% decline and AU Bank with a 2.39% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

The Indian rupee had a favorable trading day, experiencing a gain of 0.12rs, bringing it closer to the level of 82.91. This upward movement in the rupee can be attributed to a temporary pause in the seven-day rally of the dollar index, which commenced on August 31st.

The dollar index faced selling pressure in the previous evening, and this provided support to the rupee, particularly in the range of 83.00-83.15. Meanwhile, crude oil prices maintained stability at approximately $87.95 per barrel, remaining close to a 10-month high.

However, it’s worth noting that the rupee is still under some pressure due to the stability in crude oil prices. All eyes are on the OPEC monthly report scheduled for release later today, which is expected to shed light on the production and demand prospects in the global crude oil markets.

Given recent statements from OPEC regarding potential production cuts, there is a likelihood that this report could lend support to crude oil prices in the short term. This, in turn, might exert pressure on the rupee, potentially causing it to hover near the 82.80 level in the coming sessions. Traders and investors will closely monitor these factors to make informed decisions in the foreign exchange market.

Buzzing

Tata Consultancy Services Ltd. (TCS) witnessed a notable increase in its share price, rising by 2.64% compared to its previous close at Rs 3,480.65. As of the most recent trading session, TCS stock is trading at Rs 3,572.60. What’s particularly noteworthy is the appearance of a weekly stochastic crossover during the week ending September 8, 2023. Over the past decade, similar crossovers have resulted in an average price gain of 5.72% within 7 weeks, demonstrating a consistent bullish trend.

It’s worth highlighting that in the last 18 years, only a mere 1.01% of trading sessions for TCS saw intraday gains exceeding 5%, underscoring the stock’s historical stability and reliability.

On the other hand, Bharat Petroleum Corporation Ltd. (BPCL) experienced a decrease in its share price, declining by -3.79% from its previous close at Rs 363.75. As of the latest trading session, BPCL stock is valued at Rs 349.95. Similarly, in the last 18 years, only 1.82% of BPCL’s trading sessions saw intraday gains exceeding 5%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.16, and the market breadth was negative. The volatility index India Vix increased by 3.01 percent to settle at 11.69 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 325
Decliners – 2087
52Wk High –  137
52Wk Low – 14
High Band Hitters – 51
Low Band Hitters – 173
200d SMA – 18425
50d SMA – 19546
20d SMA – 19498

Top Gainers and Losers Stocks

The top gainers were TCS (+2.64%), Larsen & Toubro (+1.88%), Infosys (+1.66%), UltraTech Cement (+1.43%), and Dr. Reddy (+1.41%).

The top losers were BPCL (-3.79%), NTPC (-3.60%), Power Grid (-3.25%), Adani Enterprises (-3.17%), and Coal India (-3.08%).

Top Gainers and Losers Sector

The top gainers sectors were IT (+1.03%), and Pharma (+0.12%).

The top losers sectors were Media (-4.30%), Realty (-3.24%), Oil & Gas (-2.82%), Metal (-2.67%), and Consumer Durables (-1.91%).

The Nifty Midcap 50 was down by 2.89 percent, while the Nifty Small Cap 50 was down by 4.27 percent on the day.

The Nifty Midcap 50 index currently closed at 11,386.50, while the Nifty Small Cap 50 index currently closed at 5,739.25.

SECTORS – NOTABLE ACTION
IT +1.03%
PHARMA +0.12%
MEDIA -4.30%
REALTY -3.24%
OIL & GAS -2.82%

Stocks Ban List

(SEBI) F&O ban list  (BHEL open at -141.45 and close at -125.65), (IBULHSGFIN open at -184.60 and close at -167.90), (MANAPPURAM open at +150.00 and close at -138.35), (INDIACEM open at +252.55 and close at -234.45), (SAIL open at +101.00 and close at -93.75), (DELTACORP open at -186.00 and close at -178.35), (CHAMBLFERT open at -285.30 and close at -278.95), (HINDCOPPER open at +168.90 and close at -154.75), and (PNB open at +69.50 and close at -66.85) 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.

IEX, NATIONALUM, ZEEL, NMDC, CANBK, IRCTC and RECLTD stocks has the possibilities of enterance in the ban list.

PNB stock has the possibilities of exit from ban list.

Daily Pivots

As per the above pivots data, 19890 to 20100 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Nifty Hits 20K Milestone in 7-Day Stock Rally
Nifty Opens Gap Up, Records Sixth Consecutive Gains
Nifty Breaks 19,650 Hurdle, Banking Pack Strengthens
Index Rebound Hindered by Banking Underperformance

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