Closing Bell: Nifty around 19,250, Sensex falls 256 pts; FMCG, oil & gas, PSU bank drag

Taking Stock: Market snaps 3-day winning run; Nifty falls 2% in August series

A mixed trend was seen on the sectoral front, with oil & gas, power, FMCG and bank down 0.5-1.3 percent, while realty, metal, capital goods and information technology gained 0.2-0.7 percent... Read More

Nifty opened higher and swung between gains and losses to finally end lower in trade on Aug 31. Concerns over shortfall in rains seem to be weighing on minds of traders. At close, Nifty was down 0.48% or 93.7 points at 19253.8. Smallcap index ended 0.79% higher even as the advance decline ratio closed at 1:1.

Global stock markets were mostly mixed Thursday, limping towards their worst month since February, ahead of updates on United States inflation and hiring that traders hope will persuade the Federal Reserve no more interest rate hikes are needed.

The Indian government has convened a special session of Parliament for five days between September 18 and 22. Speculation will run wild about the agenda for this session.

Nifty snapped a three-day winning streak and in the process ended the month with a 2.53% fall. It now has crucial support in the 19201-19229 band for the near term while 19336 could act as a resistance.

During the last day of August expiry, the BankNifty index faced persistent selling pressure from the bears, ultimately leading to a negative close of 0.35% for the day. The upcoming sessions are crucial for the bulls as they aim to defend the critical support zone of 44000-43800. Failure to hold this support level could trigger additional declines, potentially pushing the index towards the 43000 mark.

On the upside, the immediate obstacle for the index lies at 44200. If the index manages to breach this level, it could set the stage for further upward movement towards the 44500 level.

Indian rupee underperforms among Asian currencies amid month-end dollar demand from importers and weaker domestic equities. Spot USDINR is expected to remain the median performer among Asian currencies amid better macro positioning and flows. In the near term, spot USDINR is expected to trade between 83 to 82.50.

Market participants are eyeing today’s economic data for a directional move.

The Nifty faced persistent resistance at the 21-day Exponential Moving Average (21EMA), which resulted in a market correction. Two consecutive unsuccessful attempts to surpass the critical 21EMA level led to an increase in selling pressure. The overall sentiment remains pessimistic, with the likelihood of any upward rallies being met with selling activity.

On the downside, the initial support level is placed at 19,200. If the index falls below the 19,200 level, it could potentially move towards the 19,000 mark. The sell on rise strategy is expected to favour the traders until the Nifty convincingly surpasses the 19,500 level.

A slew of weak economic indicators from the US, including a softened GDP figure, have heightened the likelihood of a pause in the Fed’s rate tightening, resulting in a downward trajectory of bond yields. However, this development had a limited impact on domestic sentiment on the day of expiry, with the market experiencing declines ahead of the release of India's GDP data, scheduled for today. Global markets joined the trend as Eurozone inflation persisted at 5.3% as per preliminary estimates, surpassing the market's anticipation of 5.1% along with negative cues from Asian economies.

Benchmark Indices ended in the red today on the back of concerns regarding the 9% deficit in the Monsoon as several states have witnessed scarce rainfall this month across many districts. However we did witness a lot of stock specific activity across sectors on a day characterised by volatility. A notable feature of today's trade was the activity seen in the Small-Cap Index which managed to end the day in Green.

Indian rupee closed marginally lower at 82.78 per dollar versus previous close of 82.73.

Benchmark indices broke three-day winning streak and ended lower with Nifty around 19,250 on August F&O expiry day.

At close, the Sensex was down 255.84 points or 0.39 percent at 64,831.41, and the Nifty was down 93.70 points or 0.48 percent at 19,253.80. About 1805 shares advanced, 1703 shares declined, and 142 shares unchanged.

Biggest losers on the Nifty included Adani Enterprises, BPCL, Adani Ports, Eicher Motors and Britannia Industries, while gainers were Maruti Suzuki, Cipla, HDFC Life, Titan Company and Hindalco Industries.

Mixed trend seen on the sectoral front, with oil & gas, power, FMCG and bank down 0.5-1.3 percent, while realty, metal, capital goods, information technology gained 0.2-0.7 percent.

The BSE midcap index ended flat, while smallcap index rose 0.8 percent.

-Underweight rating, target at Rs 900 per share
-CVK believes worst is behind as pipeline is converting into deals & deals to revenue
-Prior stress points, ER&D & TMT, have bottomed out
-Other verticals should see improving growth driving strong H2 over H1
-Client conversations point to zero cost transformation deals
-Pure cost optimisation deals driving vendor consultation & mega deals
-Mega deals includes people takeover but not asset takeovers, margin will see dilution
-GenAI provides another leg of growth opportunity

Indian Rupee appreciated on Thursday on soft US Dollar. However, weak domestic equities and surge in crude oil prices capped sharp gains. US Dollar declined on Wednesday as disappointing economic data from US trimmed rate hike bets in September. ADP non-farm employment and Q2 2023 GDP numbers missed forecasts. Goods trade balance was also weaker than previous reading while pending home sales topped estimates.

We expect Rupee to trade with a slight negative bias on expectations that US Dollar may bounce back amid disappointing European data. Rising crude oil prices and FII outflows may also weigh on Rupee. Month end Dollar demand from importers may also put downside pressure on the domestic unit. However, improved global risk appetite amid expectations of a Chinese stimulus may support riskier assets. Traders may remain cautious ahead of India’s fiscal deficit and GDP data today and manufacturing PMI data tomorrow. Investors may remain cautious ahead of US core PCE deflator, weekly unemployment claims and personal income data today and non-farm payrolls report tomorrow. USDINR spot price is expected to trade in a range of Rs 82.30 to Rs 83.

Rishabh Instruments IPO continued to get decent response from investors, garnering bids for 1.15 crore equity shares against offer size of 77.90 lakh shares resulting into a 1.48 times subscription on August 31, the first day of bidding.

So far, strong demand could be seen in the retail and HNIs category, with retail investors buying 1.93 times the allotted quota and high networth individuals bidding 2.38 times the portion set aside for them.

Qualified institutional buyers also showed interest in the IPO, buying 1 percent shares of the reserved portion which is 50 percent of total offer size.

-Demand spikes 6 percent in July, accelerates to 16 percent growth in August on lower rains
-Coal stocks fell & PLF rose, power deficit remains reasonable
-Renewable capacity addition run rates stable
-Renewable auctions in 5MFY24 surpass FY23
-Module supply chain prices seemed to have bottomed

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