Today’s Market Summarised

Financials take Nifty down in the day, with weakness in the global markets. 

Nifty opened 1% down at 15,755 and moved back up till 15,836. After a long consolidation above 15,800 Nifty started falling and went down till 15,707. Taking support there, Nifty moved 50 points up and closed near the open at 15,752, 1% or 171 points down.

Bank Nifty followed a similar pattern like Nifty. After opening at 35,125, Bank NIfty moved back up till 35,347. There wasn’t enough strength to move further and started falling, even breached the 35,000 support. 34,900 acted as a good support and Bank Nifty managed to close above 35k at 35,079, down by 672 points or 1.88%.

Nifty Finserv also contributed to the fall, down by 1.9%. Nifty Auto and Metal closed more than 1% down. 

Asian markets closed in the red. European markets are also trading in deep red, most of them down by 2%.

News Picks

NTPC(+1.9%) closed as Nifty’s top gainer after news that the Government plans to collect Rs 70,000 crore from asset monetization of PowerGrid, NTPC, REC over 5 years. PowerGrid and REC closed flat. 

Out of the 8 top gainers 6 are from FMCG and Pharma. Stocks from these sectors managed to close flat despite Nifty’s fall.

Financial stocks filled up the top losers list. HDFC Bank closed 3.3% down after posting below estimated profits on Saturday. Other banks – IndusInd Bank(-2.7%), Axis Bank(-2%), IDFC First Bank(-2.6%), RBL Bank(-2.5%) and Federal Bank(-2.1%) also moved down.

HDFC Life also fell 2.7% after reporting 33% decrease in Q1 profits at Rs 302 crores against Rs 451 crores last year.  HDFC also closed in the red, down by 2.1%.

Adani stocks moved down after the Minister of State for Finance said SEBI has started investigating some Adani companies. Adani Ports(-2%), Adani ENT(-1%), ATGL(-4.6%), Adani Trans(-4.7%), Adani Power(-3.3%) and Adani Green(-2.9%) moved down.

Meanwhile, Rating Agencies Crisil(+12.7%), Care Ratings(+2.7%) and ICRA(+7%) moved sharply up.

Shyam Metalics moved 4% up after Edelweiss set a higher target for the stock.

Angel Broking moved 15% to day high and then closed 7.5% up.

Clean Science listed at Rs 1,700/share vs issue price of Rs 900/share. GR Infra listed at Rs 1,712/share vs issue price of Rs 837/share.

CDSL(+6%), MCX(+3.5%), BSE(+11.4%) moved up in the day continuing their bullishness.

Chhattisgarh Environment Board allowed Godawari Power to operate its iron ore plant with increased capacity. The stock closed 5% up in the Upper Circuit.

Rossari Biotech moved up 7.4% after reporting the takeover of Tristar Intermediaries.

DeltaCorp fell 1.5% down after Goa Govt extended the restrictions till July 26.

Finance minister said 23% of the adult population completed the first dose, 5.6% are fully vaccinated.

Markets Ahead

Nifty opened the day with a gap-down then moved up. But this was clearly fake positivity as the index came crashing down again after European markets opened.

The general bearishness in the world market is once again courtesy of Covid-19 and inflation fears.

The HDFC Twins, HDFC and HDFC Bank were the top-draggers for Nifty contributing 77 points out of the 171 point fall today.

The bullishness in Bank Nifty on last Thursday now looks like a false breakout. HDFC Bank reporting high rate of bad loans in the quarter is causing concern for other smaller banks. The common thought in the market is if HDFC Bank has significantly higher bad loans, how will other banks perform in the quarter.

This week has results from a lot of key Nifty 50 stocks including Bajaj Finance, Bajaj Finserv, ICICI Bank and many others. This will be a deciding factor for the market, just like HDFC Bank today.

Bank Nifty managing to close above 35,000 shows that there is no  absolute weakness in the market yet. Nifty should move up back above 15,960 to show some bullishness as we discussed in the Week Ahead article.

Nifty Midcap and SmallCap were also weak in the day, so we will have to see how the international markets perform tonight. The immediate support at Nifty is at 15,690 with resistances at 15,850 and 15,900.

Hoping that support will be taken and the market moves back upwards.