Will the Nifty 50 Rise Again? Signs of Recovery Amid Mixed Signals! What’s Fueling the Stock Rally Before Diwali?

At the close, the Nifty 50 was at 24,339.15 up by 0.65%

Today marked a turning point for the NSE Nifty 50, which opened in the green and surged by 0.65%, closing at 24,339.15. After a five-day losing streak, Indian equity markets rebounded strongly, inching closer to the pivotal 24,500 mark. This surge was driven by broad-based buying across sectors, especially in banking and metals, igniting optimism among investors.

Despite facing mixed global cues, the Indian indices started positively and extended their gains throughout the day, although profit booking in the latter half slightly curbed the momentum. “The Nifty was up 158.35 points, showcasing resilience despite ongoing foreign selling and lackluster corporate earnings,” analysts noted.

As the market kicked off this truncated week on a solid note, the focus remained on banking stocks, which have provided much-needed support. The sharp correction in global crude prices also contributed to a buoyant sentiment.

“A decisive close above 24,500 will signal further recovery for Nifty 50,” traders emphasize. While the markets showed promise today, caution is warranted—participants should remain vigilant and wait for confirmation of a sustained rebound.

The atmosphere has shifted as positive bank results and easing tensions in the Middle East have bolstered investor confidence. Recent diplomatic developments, including proposals for a ceasefire in the ongoing conflict, have further eased market anxieties. Additionally, Brent crude oil prices have stabilized, dropping to $74.38 per barrel after fears of significant disruptions proved unfounded.

However, challenges remain. Chinese stocks have rebounded sharply, potentially diverting investment away from India, and geopolitical tensions, along with uncertainties surrounding upcoming U.S. presidential elections, loom large.

In the broader landscape, Asian markets such as Seoul, Tokyo, Shanghai, and Hong Kong closed higher, while European markets traded positively. The U.S. markets, however, ended on a mixed note, underscoring the complexity of the global financial landscape.

As Foreign Institutional Investors (FIIs) continue to offload equities while Domestic Institutional Investors (DIIs) step in to buy, the dynamics of the market are shifting. Will this rebound hold? Stay tuned as we monitor the Nifty 50’s path forward—can it break through the critical 24,500 barrier and sustain its gains?

Bank Nifty: Up by 0.93%

In an exciting turn of events, the Bank Nifty opened in the green, climbing by an impressive 0.93% to close at 51,259.30. This upward momentum signals renewed investor confidence, contributing to a positive sentiment across the market. The BSE Sensex also joined the rally, gaining 0.76% and closing at a high of 80,005.04.

On the sectorial front, the metal sector has surged by an impressive 2.54%, capturing the attention of investors. Leading the charge, Hindustan Copper Ltd. skyrocketed by 5.98%, while NMDC Ltd. followed closely with a robust gain of 4.89%.

Remarkably, there are no losers today in this sector!

Foreign Institutional Investors (FIIs) exhibited a notable net selling of ₹3,228.08 crores, with a buy value of ₹13,393.30 crores and a sale value of ₹16,621.38 crores.

Domestic Institutional Investors (DIIs) showed a more positive stance, with a net buying value of ₹1,400.85 crores. They recorded a buy value of ₹12,258.32 crores against a sale value of ₹10,857.47 crores.

Bank Nifty

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

The gainers included Canara Bank with a 7.49% increase, Bank of Baroda with a 4.28% increase, Punjab National Bank with a 3.40% increase, ICICI Bank with a 3.10% increase, and AU Bank with a 2.56% increase.

On the other hand, the biggest losers in the sector included Axis Bank with a 1.29% decline, Kotak Bank with a 0.90% decline, HDFC Bank with a 0.37% decline. These results suggest that most of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 28th October, 2024

Is the Rupee on the Brink? A New All-Time Low Amidst Rising U.S. Yields

The Indian rupee has plunged to an unprecedented low, trading at 84.0850 against the U.S. dollar on Monday, a stark reminder of the mounting pressures facing the currency. This dip comes as the 10-year U.S. yield reaches its highest point since late July, intensifying fears of a prolonged downturn.

With most Asian currencies also weakening, the ripple effect of rising U.S. yields is becoming evident. Traders are pointing to the escalating likelihood of Donald Trump securing another presidential term as a contributing factor, alongside robust data showcasing the strength of the U.S. economy. The dollar index has crested past 104.50, further complicating the situation.

Behind the scenes, the Reserve Bank of India (RBI) is taking action, likely selling dollars through public sector banks to prop up the struggling rupee. Without these interventions, analysts suggest that the rupee’s losses would have been far more significant.

Remarkably, the RBI’s efforts have managed to quell volatility, resulting in a three-paisa trading range last week—the narrowest seen in over a decade. “The price action in the spot market hinges on the level the RBI is comfortable with,” traders caution, hinting at the delicate balance the central bank is trying to maintain.

As the situation evolves, the question lingers: Will the RBI’s interventions be enough to stabilize the rupee, or is this just the beginning of a larger decline?

Stocks Highlights

Shriram Finance Ltd. has captured attention with its share price soaring by 5.35%, rising from a previous close of Rs 3,092.65 to a last traded price of Rs 3,258.00. This upward trend coincides with the company’s announcement of a dividend of Rs 22.0 per share on October 18, 2024, which is sure to excite shareholders, especially with the record date set for November 7, 2024.

However, it’s crucial to delve deeper into the financials. In the fiscal year ending March 31, 2024, Shriram Finance allocated 42.67% of its operating revenues to interest expenses and 9.54% to employee costs. Yet, a recent weekly MACD crossover signal suggests potential bearish dominance, historically leading to an average price decline of -6.8% within seven weeks.

In stark contrast, Coal India Ltd. is experiencing a downturn, with a share price decrease of -3.76% from Rs 461.10 to Rs 443.75. The company announced a dividend of Rs 15.75 per share on October 14, 2024, with a record date of November 5, 2024.

However, a worrying trend emerged as Coal India reported a 16.09% decline in quarterly revenue—the lowest performance in the last three years. Despite this, Coal India has delivered impressive returns over the past three years, with a 164.85% gain, significantly outpacing the Nifty 100’s return of 38.33%.

Advance Decline Ratio

Today, the advance-decline ratio was 1.98, and the market breadth was positive. The volatility index India Vix decreased by 2.34 to settle at 14.29 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1866
Decliners – 942
52Wk High – 28
52Wk Low – 129
High Band Hitters – 152
Low Band Hitters – 142
200d SMA – 23389
50d SMA – 25124
20d SMA – 24900

Top Gainers and Losers Stocks

The top gainers were Shriram Finance (+5.35%), Adani Enterprises (+4.07%), ICICI Bank (+3.10%), JSW Steel (+3.00%), and Wipro (+2.90%).

The top losers were Coal India (-3.76%), Bajaj Auto (-2.07%), Axis Bank (-1.29%), Hero MotoCorp (-1.19%), and BEL (-0.92%).

Top Gainers and Losers Sectors

The top gainers sector were Metal (+2.54%), Media (+1.96%), Realty (+1.38%), Pharma (+1.25%), and Auto (+0.69%).

SECTORS – NOTABLE ACTION
METAL +2.54%
MEDIA +1.96%
REALTY +1.38%

Stocks Ban List

(SEBI) F&O ban list (INDIAMART close at +2515.95), (DIXON close at +14236.55), (IDFCFIRSTB close at +67.13), (RBLBANK close at +166.55), (LTF close at +142.23), (ESCORTS close at +3506.15), (MANAPPURAM close at +148.48), (NMDC close at +227.96), (AARTIIND close at +510.60), and (BANDHANBNK close at +184.81) 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.

INDUSINDBK, ABFRL, PNB, SAIL, CANBK, HINDCOPPER, GMRINFRA, GRANULES, BHEL, LICHSGFIN, NATIONALUM, EXIDEIND, PVRINOX, BANKBARODA, and GNFC stocks has the possibilities of entrance in the ban list.

NMDC, AARTIIND, and BANDHANBNK stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 24000 to 24700 is the Nifty 50 trading range.

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