Will Nifty’s Historic Rally Unravel After the Fed’s Bold Move? What’s Next for the Market?

At the close, the Nifty 50 was at 25,415.80 up by 0.15%

September 19, 2024. NSE Nifty 50 kicked off in the green, edging up by 0.15% and closing above the significant 25,400 mark. But hold on—this isn’t the whole story. After a tight trading range over the past four sessions, Nifty attempted a breakout on Thursday, only to fall short. Despite opening with an impressive gap of 110 points and hitting a new all-time high of 25,611.95, it ended the day with modest gains of 38.25 points.

Why did the excitement fizzle? After its strong opening, the market faced persistent selling pressure at higher levels. The prevailing sentiment suggests a positive market trend overall, but a fresh uptrend rally might only emerge if the Nifty decisively breaks through 25,500.

In the spotlight on September 19: Nifty 50 surged past 25,600 for the first time, buoyed by the US Federal Reserve’s unexpected and substantial rate cut. Despite this, the index later retraced some of its gains, settling at 25,415.80. The day’s action formed a Shooting Star candlestick pattern, hinting at potential volatility.

The market?

What’s driving the market? The record rally was triggered by the Fed’s 50 basis point cut and a hint of further reductions. However, the broader market saw a dip due to profit-taking, particularly among mid and small-cap stocks. The market’s response was mixed, reflecting both optimism and caution.

Sector highlights: Banking and FMCG sectors saw a boost, spurred by foreign investments and expectations of monetary easing by the RBI in October. However, concerns lingered about a global slowdown due to the Fed’s aggressive rate cut.

What’s next for Nifty? The index is now navigating a consolidation range of 25,300-25,500, with any decisive move on either side likely to set the trend. The recent rate cut by the Fed, while initially boosting market sentiment, has raised concerns about a slowing economy, though Fed Chair Jerome Powell downplayed the risk of a downturn.

The Fed’s aggressive stance: The 50bps rate cut has sparked debates about economic health, with some members voicing concerns. The Fed hinted at further adjustments and a positive growth outlook, but markets are still reacting to the nuanced language and the prospect of ongoing data-driven decisions.

Stay tuned—how will these factors shape the future of the market? The next moves could be pivotal!

Bank Nifty: Up by 0.54%

The Bank Nifty started the day strong, opening in the green with a 0.54% rise, and closed even higher at 53,037.60. Meanwhile, the BSE Sensex followed suit, gaining 0.29%, closing the day at a record high of 83,184.80.

In a surprising twist, the FMCG sector has surged by 0.56%. Leading the charge, United Breweries Ltd. has skyrocketed with an impressive 3.94% gain, and Nestle India Ltd. has also seen a notable 1.77% increase.

But here’s where the story takes a dramatic turn—MEDIA has taken a sharp dive, plummeting by 2.45%. Within this sector, Network18 Media & Investments Ltd. has been hit hardest, suffering a staggering -7.19% drop, while Nazara Technologies Ltd. follows with a -4.35% decline.

FIIs were on the selling side, with a buy value of Rs. 17,852.32 crore and a sale value of Rs. 20,399.85 crore, resulting in a net outflow of Rs. 2,547.53 crore.

DIIs came in strong, buying stocks worth Rs. 16,234.69 crore and selling for Rs. 14,221.83 crore, leading to a net inflow of Rs. 2,012.86 crore.

Bank Nifty

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

The gainers included AU Bank with a 3.54% increase, Kotak Bank with a 1.76% increase, IDFC First Bank with a 1.66% increase, HDFC Bank with a 0.76% increase, and Axis Bank with a 0.35% increase.

On the other hand, the biggest losers in the sector included Punjab National Bank with a 1.10% decline, Bandhan Bank with a 0.58% decline, Bank of Baroda with a 0.42% decline, State Bank of India with a 0.16% decline, and Federal Bank with a 0.09% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 19th September, 2024

Rupee Rallies to a Two-Month High – What’s Driving It?

The rupee strengthened by 10 paise, reaching a two-month high of 83.66 against the US dollar on Thursday. This surge came after the US Federal Reserve’s unexpected 0.50% rate cut, boosting investor sentiment and sparking optimism across markets.

Massive buying in domestic equities and foreign fund inflows further fueled the rupee’s rise. While the American dollar initially saw some gains following the Fed’s announcement, recessionary fears in the US tempered its upward momentum.

The rupee opened at 83.70, touched an intra-day high of 83.56, and closed at 83.66, marking a 10 paise gain from its previous close. Interestingly, this level was last seen on July 22 of this year.

However, rising crude oil prices capped the rupee’s ascent. Brent crude advanced by 1.05%, putting some pressure on the local currency’s rally.

Looking ahead, the rupee is expected to trade with a slight positive bias, as hopes for fresh FII inflows grow following the Fed’s aggressive rate cut. Will the rupee sustain its upward trajectory, or will global headwinds shift the tide?

Stocks Highlights

NTPC Ltd. is riding high, with its share price jumping 2.38% from the previous close of Rs. 414.15, now trading at Rs. 424.00. But here’s where it gets really interesting – intraday declines of more than 5% have been incredibly rare, occurring in just 1% of trading sessions over the past 19 years.

Bulls, it’s your time! A buy signal has flashed, with a MACD crossover on Sep 17, 2024, historically leading to an average gain of 3.55% within 10 days. And if that’s not convincing enough, in the past 3 years, NTPC has delivered a jaw-dropping return of 234.67%, dwarfing Nifty 100’s 48.18%. With interest and employee expenses under control, what’s the next big move for NTPC?

On the flip side, Bharat Petroleum Corporation Ltd. (BPCL) is feeling the heat, with its share price dipping -3.41% to Rs. 324.65. Only 1.78% of trading sessions in the last 19 years saw steeper intraday declines than this. The company’s return on equity (ROE) stands strong at 35.51%, well above its 5-year average, but that hasn’t stopped the bears from taking control. A sell signal emerged with a 50-day moving crossover, leading to an average decline of -3.64% within 30 days over the last 5 years.

Advance Decline Ratio

Today, the advance-decline ratio was 0.40, and the market breadth was negative. The volatility index India Vix decreased by 6.74 to settle at 12.47 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 790
Decliners – 1961
52Wk High – 107
52Wk Low – 44
High Band Hitters – 78
Low Band Hitters – 162
200d SMA – 22878
50d SMA – 24777
20d SMA – 25164

Top Gainers and Losers Stocks

The top gainers were NTPC (+2.38%), Titan (+1.82%), Nestle India (+1.77%), Kotak Bank (+1.76%), and Tata Consumer (+1.26%).

The top losers were BPCL (-3.41%), Coal India (-1.52%), ONGC (-1.34%), Adani Ports (-1.25%), and Shriram Financial (-1.25%).

Top Gainers and Losers Sectors

The top gainers sector were FMCG (+0.56%), Realty (+0.49%), Consumer Durables (+0.47%), Auto (+0.40%), and Financial Services (+0.32%).

The top losers sector were Media (-2.45%), Oil & Gas (-1.34%), Metal (-0.64%), Pharma (-0.41%), and IT (-0.34%).

SECTORS – NOTABLE ACTION
FMCG +0.56%
REALTY +0.49%
CONSUMER DURABLES +0.47%
MEDIA -2.45%
OIL & GAS -1.34%
METAL -0.64%

Stocks Ban List

(SEBI) F&O ban list (GRANULES close at -542.45), (OFSS close at -11043.95), (BIOCON close at -361.50), (LICHSGFIN close at -663.65), (GNFC close at -646.25), (PNB close at -107.25), (AARTIIND close at +566.25), (BSOFT close at -625.30), (RBLBANK close at -209.51), and (BALRAMCHIN close at +583.50) 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.

IDEA, SAIL, TATACHEM, NMDC, IDFCFIRSTB, NATIONALUM, ABFRL, HAL, PEL, MANAPPURAM, CANBK, IRCTC, DIXON, GMRINFRA, BANDHANBNK, BANKBARODA, and CHAMBLFERT stocks has the possibilities of entrance in the ban list.

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

Daily Pivots

As per the above pivots data, 25200 to 25600 is the Nifty 50 trading range.

Read Previous -Daily Insights- here
Is the Nifty signaling a hidden shift before the FOMC decision? What’s lurking in the charts?
Is Nifty On The Edge of a Big Breakthrough or a Major Setback?

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