Closing Bell: Nifty below 19,650, Sensex down 107 pts; power, realty outperform

Taking Stock: Market ends marginally lower amid volatility; loses 0.5% for the week

For the week, BSE Sensex lost 0.78 percent and NIfty50 fell 0.5 percent.... Read More

The Nifty opened on a flat note and witnessed volatile price action. It drifted lower during the first half and witnessed a sharp recovery towards the close which helped it to close off the intraday lows though down ~14 points. On the daily charts, we can observe that the Nifty has closed in the negative for the second consecutive day. It has been trading in a downward-sloping channel and we expect it to consolidate within this channel. It can witness a bounce towards the key hourly moving averages placed in the range 19690 – 19720 from where we expect the selling pressure to resume. On the weekly charts, the Nifty has closed in the negative after rising for four consecutive weeks and which also suggests that the Nifty can consolidate. The momentum indicator has a negative crossover which is a sell signal and thus the pullbacks shall be difficult to sustain. Overall, the short-term outlook remains range bound between 19500 – 20000. Crucial support levels to keep handy are 19540 - 19500 and on the upside, 19700 - 19720 is the immediate hurdle zone.

Bank Nifty opened the gap down and witnessed a weak closing. Though it witnessed a pullback during the last hour of the session, however, the structure still points towards a short-term consolidation. On the weekly chart as well we can observe that the Bank Nifty traded within the range 44700 – 46370 of the penultimate week and thus formed an Inside Bar pattern which makes the extremes of the range crucial levels to watch out for in the short term. A breach of this range on either side shall lead to a move in that direction. Overall, we expect the Bank Nifty to consolidate between 46500 – 45000.

Nifty closed lower for the second straight day on July 28, pulled down by weak global cues and a series of muted Q1 results. At close, Nifty was down 0.07% or 13.9 points at 19646.1. Broad market indices ended in the positive even as the advance decline ratio remained firm at 1.08:1.

Global shares traded mixed on Friday as investors digested monetary policy steps/message from Japan. The Bank of Japan's policy shift could have seismic implications for global money flows, since a cheap yen that's been inexpensive to borrow has been a mainstay of capital market funding for years, and it now faces upward pressure from rising Japanese yields just as global rates seem to peak.

Nifty after falling in the early part of the session, recovered part of the losses on July 28 and formed a high wave doji pattern after a small fall. On weekly chart, Nifty fell 0.5% over the week after gaining for the previous four weeks. 19562 becomes a crucial support for the Nifty below which a fall of another 2% could follow and the 17-week rally from the low of 16828 could be said to have ended. 19748 could be a resistance for the near term.

Nifty remained under pressure throughout the session but witnessed some recovery in the last hour to close with a marginal loss of 14 points at 19646 levels. Sectorially, it was mixed with major buying seen in Realty (+1.8%). Power stocks were in the limelight on the back of attractive valuations and huge investments in the sector.

Overall, we expect sectoral rotation in the market, while Index is likely to remain in the consolidation zone with the ongoing result season. Market will keep an eye on the manufacturing data to be released next week both - globally as well as locally. Also, the Bank of England will announce its rate decision next week on Thursday. Auto sector will be in focus as companies would announce their monthly sales numbers.

Weak European market cues and negative US futures kept the local market mood bearish for a major portion of the trading session. Profit taking in banking and IT stocks weighed on indices, although strong buying in realty shares helped markets pare losses. All eyes will now be on RBI's credit policy, as it would be interesting to see if the central bank also follows the US Fed and hikes interest rates, which could hurt growth prospects going ahead.

Technically, on intraday charts, the Nifty has formed a lower top formation, which is largely negative. For positional traders, the 20-day SMA or 19580 would act as a sacrosanct support zone. If the index succeeds to trade above the same, then it could bounce back till 19800. On further upside it could lift the market till 19900. On the flip side, a fresh sell off is possible only after the dismissal of 19580 and below the same it could slip till 19450-19400.

In the case of Bank Nifty, the 20-day SMA or 45250 could be the trend decider level, and above the same the index could move up till 45700-45900. On the other side, below 45250 it could slip till 44700-44500.

The better-than-expected US Q2 GDP data, though positive, hindered the mood of the domestic market as it signalled the chances of another rate hike. The Fed chief's comments about a data-centric approach without ruling out rate hikes added to the uncertainty.

Furthermore, the reversal of the buying trend by FII and the rise in US bond yields contributed to market volatility. However, Asian markets remained largely positive due to the BOJ's decision to retain the policy rate, contrary to speculation about the removal of stimulus measures.

Both Nifty and Sensex lost around 1% in the past week. Mid-cap and small-cap indices outperformed the large-cap index. Macro sentiments remained volatile as frailties in European and US banks were under focus. Indian equity markets remained concerned about slowdown, higher interest rates and valuation even as inflation continued its downward trajectory both globally and domestically.

Sector-wise, capital goods (+4%), Pharma (+4.6%), Realty (+4.9%), Energy (+2.2%) and Metal (+2.6%) were the major gainers, while IT services (-1.5%) and FMCG (-1.9%) and Bank Nifty (-1.5%) were the major losers.

Within the Nifty Index, Cipla (+11.4%), NTPC (+6.6%) and Dr Reddy (+5.8%) gained the most, while Tech Mahindra (-9.1%), ITC (-5.0%) and BPCL (-4.4%) lost the most. Both, FPIs and DIIs were net buyers during the week.

On the economy front, the US Fed increased its Federal Funds rate by 25 bps, while suggesting that future rate trajectory will be data dependent. In International news, the U.S. economy showed few signs of recession in the second quarter, as gross domestic product at a 2.4% annualized rate for the April-through-June period, better than the 2% consensus estimate.

In Europe, French gross domestic product grew by 0.5% in the second quarter, national statistics showed, well above a forecast of 0.1% in a Reuter’s poll of economists.

In Asia, the Bank of Japan will continue to allow 10-year Japanese government bond yields to fluctuate in the range of around plus and minus 0.5 percentage points from its 0% target level.

Indian rupee closed 31 paise lower at 82.25 per dollar versus previous close of 81.94.

: Benchmark indices ended lower for the second consecutive session on July 28 with Nifty below 19,650.

At close, the Sensex was down 106.62 points or 0.16% at 66,160.20, and the Nifty was down 13.90 points or 0.07% at 19,646. About 1774 shares advanced, 1641 shares declined, and 163 shares unchanged.

Bajaj Finserv, HDFC Bank, BPCL, Tata Motors and HCL Technologies are among the top losers on the Nifty, while gainers were NTPC, Power Grid Corporation, Apollo Hospitals, Adani Enterprises and M&M.

Among sectors, power and realty indices rose 2 percent each, while metal, capital goods and healthcare added 0.4 percent each. On the other hand, selling was seen in the banking, oil & gas and information technology names.

The BSE Midcap and Smallcap index added 0.5 percent each.

Net profit was down 3.3 percent at Rs 11.6 crore versus Rs 12 crore, YoY
Revenue was up 4.4% at Rs 82.2 crore versus Rs 78.7 crore, YoY

Net profit was at RS 87.9 crore versus loss of RS 209.7 crore, YoY
Revenue was up 34.1% at Rs 462.3 crore versus Rs 344.8 crore, YoY

Indian Rupee fell on Friday on the strong US Dollar and weak domestic markets. The surge in crude oil prices further pressurized the domestic unit. US Dollar gained strong economic data from the US. The US economy expanded by 2.4% in Q2 2023 topping estimates of 1.8% and a reading of 2% in the previous forecast, raising hopes that the US may not slip into recession. Weekly unemployment claims were also lower than forecast. Other economic data from the US were also better than expected. This provided more room for US Federal Reserve to hike interest rates further. The dovish tone from ECB also strengthened the Dollar.

We expect Rupee to trade with a slight negative bias on risk aversion in global markets and rising interest rates by most major central banks. Strong Dollar and elevated crude oil prices may also put downside pressure on Rupee. However, FIIs remain as net buyers in July, which may support Rupee at lower levels. Traders may remain cautious ahead of the core PCE deflator index from the US. We expect the USDINR spot to trade in the range of 81.80 to 82.80 in the near term.

Yatharth Hospital & Trauma Care Services's IPO saw a healthy response from investors on July 28, the final day of bidding, as they applied for 47.41 crore equity shares, against the issue size of 1.65 crore shares, buying 28.70 times.

Retail investors bid 7.37 times the allotted quota, while high-networth individuals (non-institutional investors) bought 32.54 times the reserved portion.

The part set aside for qualified institutional buyers was subscribed 63.93 percent. Qualified institutional buyers have 50 percent reservation in the public issue, including anchor book, through which the company already raised Rs 206 crore on July 25, a day before the issue opening.