Wild Gyration on Expiry Day Due to US Fed Rate Hike Signal

NiftyTrader • July 27, 2023

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Index	Price	Change	% Chg
Nifty 50	19,659.90	–118.40	-0.60%
Nifty Bank	45,679.30	-383.05	-0.83%
BSE SENSEX	66,266.82	–440.38	–0.66%

At the close, the Nifty 50 was at 19,659.90 down by 0.60%

Today’s trading session witnessed a bullish opening for NSE Nifty 50, with the index soaring to a strong starting point. However, as the day progressed, the market sentiment shifted, resulting in a decline of 0.60 percent. The closing bell rang, painting the charts in red, and Nifty settled below the crucial support level of 19,700.

The Federal Open Market Committee’s (FOMC) recent decision to raise interest rates by 25 basis points (bps), in line with market expectations, was coupled with a commitment to a data-centric approach for potential future rate adjustments.

This announcement contributed to a prevailing positive global sentiment, as the reduced prospects of a US recession reassured investors.

The domestic market witnessed significant declines, particularly in the banking and automotive sectors, while pharmaceutical stocks performed well, benefiting from a positive start to their earnings season.

Foreign Institutional Investors (FII/FPI) made notable moves in the Indian stock market, with a Buy Value of Rs. 11,640.43 Cr. and a corresponding Sale Value of Rs. 15,619.87 Cr., resulting in a Net Value of -Rs. 3,979.44 Cr.

On the other hand, Domestic Institutional Investors (DII) also actively participated, recording a Buy Value of Rs. 9,281.77 Cr. and a Sale Value of Rs. 6,753.62 Cr., leading to a Net Value of Rs. 2,528.15 Cr.

Bank Nifty: Down by 0.83%

In today’s highly dynamic financial markets, the Bank Nifty commenced its trading session on a positive note, reflecting a bullish opening. However, as the day unfolded, the index experienced a downturn of 0.83 percent, eventually concluding in the red zone, with a closing value of 45,679.30. Likewise, the BSE Sensex also faced a bearish trend, witnessing a decline of 0.66 percent, and ending the day in the negative territory at a low of 66,266.82.

The Bank Nifty index witnessed a bear-dominated day during its monthly expiry, as the market saw overwhelming control by bears, overshadowing the bulls. Notably, the index faced strong resistance at the crucial 46000 level, which coincides with the point of highest open interest on the call side, indicating traders’ anticipation of limited upside potential.

Conversely, the index found support around the 45400 level on the downside. A break below this significant support level could potentially escalate selling pressure in the market, triggering further downward movements in the index. Investors closely monitored these developments to gauge the prevailing market sentiment and potential trends.

During today’s trading session, the pharmaceutical sector emerged as the top gainer, showcasing a remarkable gain of 3.05%. Within this sector, Cipla Limited displayed significant strength, surging by an impressive 9.78%, while Aurobindo Pharma Limited also performed well with a gain of 5.90%.

On the other hand, the automotive sector experienced a decline, losing ground with a negative change of 1.21%. Notably, Mahindra & Mahindra Limited faced a significant downturn, recording a loss of -6.23%, while Bosch Limited also saw a decrease in its stock price, losing by -1.32%.

Bank Nifty

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

The gainers included Bank of Baroda with a 0.71% increase, State Bank of India with a 0.30% increase, Federal Bank with a 0.26% increase, and AU Bank with a 0.07% increase. On the other hand, the biggest losers in the sector included IDFC First Bank with a 2.01% decline, Axis Bank with a 1.60% decline, Bandhan Bank with a 1.50% decline, Kotak Bank with a 1.17% decline and Punjab National Bank with a 1.03% decline. These results suggest that some banking stocks not performed better for the day.

Buzz

On Thursday, the Indian rupee exhibited resilience against the US dollar, gaining 7 paise to close at 81.94 (provisional) in the interbank foreign exchange market. This upward movement came in response to the weakness of the American currency in the global market following the expected interest rate hike by the US Federal Reserve.

Despite this positive momentum, the rupee faced certain challenges from weak domestic markets and the surge in crude oil prices, which limited substantial gains.

Starting the day at 81.92 against the US dollar, the local unit traded within a range of 81.91 to 82.03 during the session, eventually settling 7 paise higher at 81.94 (provisional) compared to the previous close of 82.01 on Friday.

Looking ahead, the rupee may experience pressure from month-end Dollar demand from importers and concerns over the global economic slowdown. Nevertheless, the rupee could find support from Foreign Institutional Investor (FII) inflows at lower levels. Market analysts anticipate the USD/INR spot to fluctuate within the range of 81.50 to 82.30 in the near term.

Buzzing

Cipla Ltd. witnessed a significant surge in its share price, rising by an impressive 9.78% from its previous close of Rs 1,068.50. The current last traded price for Cipla Ltd. stock stands at Rs 1,173.00. Over the past three years, the stock has delivered a commendable return of 63.65%, albeit slightly lower than the Nifty 100, which recorded a return of 73.19%.

On the other hand, Mahindra & Mahindra Ltd. experienced a downward movement in its share price, declining by -6.23% from its previous close of Rs 1,544.85. As of now, the last traded price for Mahindra & Mahindra Ltd. stock is Rs 1,448.60. An interesting 5-day moving crossover occurred recently, indicating potential market shifts. Historically, the average price decline following this signal within 7 days has been -2.67% over the last 5 years.

However, Mahindra & Mahindra Ltd. has demonstrated strong annual revenue growth, boasting an impressive 34.43%, outperforming its 3-year compound annual growth rate (CAGR) of 16.85%. Moreover, the company exhibited a robust return on equity (ROE) of 18.24% in the year ending 31 Mar, 2023, surpassing its 5-year average of 10.72%. These financial metrics provide valuable insights to investors assessing the company’s performance and potential for the future.

Advance Decline Ratio

Today, the advance-decline ratio was 1.13, and the market breadth was positive. The volatility index India Vix increased by 0.52 percent to settle at 10.51 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 5630
Decliners – 4981
52Wk High – 167
52Wk Low – 14
High Band Hitters – 61
Low Band Hitters – 31
200d SMA – 18156
50d SMA – 18981
20d SMA – 19555

Top Gainers and Losers Stocks

The top gainers were Cipla (+9.78%), Sun Pharmaceutical (+2.30%), Divi’s Laboratories (+2.03%), Hero MotoCorp (+1.43%), and Apollo Hospitals (+1.34%).

The top losers were M&M (-6.23%), Tech Mahindra (-3.62%), Tata Consumer (-2.71%), Britannia (-2.12%), and Nestle India (-2.03%).

Top Gainers and Losers Sector

The top gainers sectors were Pharma (+3.05%), and Realty (+2.12%).

The top losers sectors were Auto (+1.21%), Oil & Gas (+0.97%), Financial Services (+0.78%), FMCG (-0.69%), and Metal (-0.35%).

The Nifty Midcap 50 was up by 0.59 percent, while the Nifty Small Cap 50 was down by 0.09 percent on the day.

The Nifty Midcap 50 index currently closed at 10,624.50, while the Nifty Small Cap 50 index currently closed at 5,217.20.

SECTORS – NOTABLE ACTION
PHARMA +3.05%
REALTY +2.12%
AUTO -1.21%
OIL & GAS -0.97%
FINANCIAL SERVICES -0.78%

Stocks Ban List

(SEBI) F&O ban list (SUNTV open at +541.35 and close at -529.95), (RBLBANK open at +240.00 and close at -232.60), and (DELTACORP open at +198.00 and close at +196.30) are not currently on the stock exchange.

The Securities and Exchange Board of India (SEBI) has banned SUNTV , RBLBANK, and DELTACORP trading in the futures and options (F&O) segment of 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.

ZEEL, CANFINHOME, MANAPPURAM, HINDCOPPER, PNB and BHEL, are stock that are potentially facing the possibility of being included in the ban list.

RBLBANK, and DELTACORP has the possibilities of exit from ban list.