2 weeks ago
The Indian stock market failed to sustain its opening gains and remained under pressure, extending the ongoing correction phase. A sharp sell-off in the second half led the Nifty50 to shed over a percent, ending at nearly a 5-month low.
Despite an initial uptick, the Nifty saw sharp swings in the first half before selling pressure in heavyweight stocks shifted the momentum downward, leading to significant losses across the board.
The Sensex fell 821 points to close at 78,675, while the Nifty declined 258 points to settle at 23,883. All sectoral indices ended in the red, with PSU and auto sectors as the top losers. Broader indices were also impacted, each dropping nearly 1.5%.
Nearly one-third of the Nifty's 260-point drop on Tuesday came from HDFC Bank, which contributed 84 points to the downside. Other major laggards included the likes of SBI (19 points), NTPC (13.5 points) and Britannia (11.2 points).
Weak earnings prompted sharp reactions in individual stocks, with 44 of the 50 Nifty stocks closing in the red. Major losers included Britannia Industries, Bharat Electronics, and NTPC.
Britannia shares extended their losses after the earnings call, ending over 7% lower at ₹5,038. With this, the stock has also turned negative for the calendar year 2024. Britannia anticipates some impact on volumes in the short-term. The firm said that it will try and balance both price and volume growth going forward and is closely monitoring the commodity situation and assessing its impact. It also remains vigilant of the competitive pricing action.
ALSO READ: Britannia says cities contributed 30% to sales but a lot more to the slowdown
Earnings reactions will also come from broader market names like Nykaa, NMDC, Hindustan Copper, Shree Cement, Bank of India, Fertilisers, Awfis Space Solutions that reporting earnings after market hours on Tuesday.
Eicher Motors, Apollo Tyres, Alkem Laboratories, Vodafone Idea, Brigade Enterprises, ESAF Small Finance Bank, NBCC, Torrent Power are some important results to be reported on Wednesday.
This is a truncated week and hence trading activity may remain thin as well.
FII, DII activity
On Tuesday, foreign institutions continued to remain net sellers in the cash market, while domestic institutions were net buyers yet again.
What do the Nifty50 charts suggest?
The Nifty50 index has now edged closer to its previous swing low of around 23,800, with banking heavyweights leading the decline and dampening hopes of a recovery once again.
"The 23,816 support that the Nifty took last week, if that were to go, the next support comes at about 23,650. And below that, it's 23,100. So I don't anticipate the market to drop straight to 23,000 in this leg. I anticipate some bounce to come through from 23,600 and change. But if the market were to break below 23,600 and change, it signifies that the markets are more weaker than I'm anticipating," said Jai Bala of cashthechaos.com.
Bala anticipates some bounce that's sizable than what was seen from 23,816 to 24,500 and change. He expectes the next bounce to be slightly larger than that, but said that the market remains sell on rise.
Nagaraj Shetti of HDFC Securities believes the short-term trend of Nifty continues to be weak. He said that a slide below 23,800 levels could open the next downside target of around 23,500 levels (200-day EMA) in the near term. Immediate resistance is at 24,050 levels.
Rupak De of LKP Securities said that Nifty has slipped from its recent consolidation on the daily chart, indicating growing pessimism in the market. The index has been holding below key short-term moving averages, specifically the 21-EMA and 50-EMA, further weakening sentiment.
"The daily RSI is declining, accompanied by a bearish crossover. In the short term, the index may move towards the 23,600–23,650 range, while resistance on the higher end is seen at 24,000," he said.
According to Ajit Mishra of Religare Broking, the current signals suggest a potential test of the long-term moving average at the 200 DEMA level, around 23,540.
Nifty Bank ends on a negative note
Bank Nifty began on a strong note, but in the second half, the index experienced significant selling pressure. As a result, Bank Nifty concluded the day on a negative note at 51,158.
Technically, the index on a daily scale has broken the 100- Days exponential moving average (DEMA) support and formed a big red candle, indicating weakness. However, the index has been consolidating in the range of 50,500 to 52,580 from the last few weeks. If the index sustains below 50,500, then only fresh selling pressure could be possible, otherwise, the index will continue its consolidation, said Hrishikesh Yedve of Asit C Mehta Investment Interrmediates.
What Are the F&O Cues Indicating?
Nifty 50's November futures added 3.8% or 4.23 lakh shares in Open Interest on Tuesday. They are currently trading at a premium of 76.15 points compared to 85 points earlier. On the other hand, Nifty Bank's November futures added 14.9% or 3.84 lakh shares in Open Interest on Tuesday. Nifty 50's Put-Call Ratio is now at 0.72 from 0.91 earlier.
Aarti Industries, Aditya Birla Fashion, Granules India, Hindustan Copper, Manappuram Finance are still in the F&O ban.
Nifty 50 on the Call side for November 14 expiry:
On the Call side, the Nifty 50 strikes between 23,900 and 24,200 have seen Open Interest addition for this Thursday's weekly expiry.
| Strike | OI Change | Premium |
| 24,000 | 50.67 Lakh Added | 64.85 |
| 24,200 | 35.57 Lakh Added | 24.25 |
| 24,100 | 33.35 Lakh Added | 39.15 |
| 23,900 | 22.29 Lakh Added | 103.8 |
Nifty 50 On the Put side for November 14 expiry:
On the Put side, the Nifty 50 strikes between 23,800 and 23,900 have seen Open Interest addition for this Thursday's weekly expiry, while the 24,000 strike has seen shedding in Open Interest.
| Strike | OI Change | Premium |
| 23,900 | 3.87 Lakh Added | 105.25 |
| 23,850 | 3.01 Lakh Added | 84.8 |
| 23,800 | 2.9 Lakh Added | 127.5 |
| 24,000 | 7.5 Lakh Shed | 163.55 |
Fresh long positions were seen in these stocks on Tuesday, meaning an increase in both price and Open Interest:
| Stock | Price Change | OI Change |
| Ramco Cements | 5.04% | 12.19% |
| Syngene | 0.24% | 3.91% |
| ONGC | 0.16% | 1.76% |
| IPCA Labs | 1.22% | 1.17% |
| Astral | 1.90% | 0.53% |
Fresh short positions were seen in these stocks on Tuesday, meaning a decline in price but an increase in Open Interest:
| Stock | Price Change | OI Change |
| Deepak Nitrite | -3.02% | 19.74% |
| Marico | -3.67% | 9.25% |
| Cipla | -1.95% | 6.26% |
| MCX | -4.57% | 6.13% |
| United Breweries | -2.36% | 4.83% |
Unwinding of long positions was seen in these stocks on Tuesday, meaning a decline in both price and Open Interest:
| Stock | Price Change | OI Change |
| Coromandel | -0.35% | -7.18% |
| IGL | -1.98% | -6.48% |
| Lupin | -0.19% | -6.45% |
| Divi's Laboratories | -1.74% | -5.68% |
| Laurus Labs | -1.03% | -5.41% |
These are the stocks to watch out for ahead of Wednesday's trading session:
- Tata Chemicals: The company's arm, Tata Chemicals Europe will invest ₹655 crore to build a Sodium Bicarbonate plant in Northwich, UK. Tata Chemicals Europe will cease production at lostock plant by the end of January 2025.
- Federal Bank: The lender will raise ₹1,500 crore through its first-ever issuance of redeemable, unsecured long-term infrastructure bonds. The total issue size comprised a base issue of ₹750 crore, along with a greenshoe option to retain oversubscription up to an additional ₹750 crore.
- Ashoka Buidcon: Net profit at ₹462.5 crore. Revenue up 15.5% from last year's to ₹2,489 crore. EBITDA up 65.8% from last year's to ₹905.3 crore, while margin stood at 36.4%.
- EMS Ltd: The company gets LoA in joint venture for the work valuing ₹681.5 crore (74% Share) from Kolkata Municipal Corporation.
- PNC Infra: Net profit down 43.6% from last year's to ₹83.5 crore. Revenue down 25.3% from last year's to ₹1,427 crore. EBITDA down 10.9% from last year's to ₹356.4 crore, while margin stood at 25%.
