Today’s Market Summarised

Bulls continue to push the market up, with Banks outperforming after SBI results.

Nifty opened the day with a gap-up at 16,196 and was highly bullish.  Rallying up, the index found resistance first at 16,250 then found the day-high just below 16,300. From here power was lost and Nifty saw a bit of profit booking. 

Even when it tried to move back up, the index could not find strength. Nifty closed the day at 16,258, up 128 points or 0.79%.

Bank Nifty opened the day at 35,390 and shot up to 36,000 non-stop. After a small profit booking, results from SBI brought in new power to the index. 36,000 was broken this time easily and shot up further 200 points. Profit booking took the index down a bit and Bank Nifty closed at 36,028, up 820 points or 2.33%.

Financial stocks were the best performers in the market today. Bank Nifty, Nifty Finserv were the top-gaining sectors. Nifty Realty, Media and Auto fell while others consolidated in the red.

Asian markets closed mostly in the green today. European markets are all trading in the green as of our market close.

News Picks

HDFC’s(+4.75%) breakout rally continued with the stock closing as top-gainer in Nifty 50 once again. All 6 top-gainers were from the finance sector, with Axis Bank(+2%), Kotak Bank(+3.8%) and HDFC Bank(+2.1%) gaining back after July’s fall.

ICICI Bank(+3.5%) touched fresh 52-week highs along with SBI(+2.3%).

State Bank Of India reported Q1 standalone net profit of Rs 6,500 crores, up 1% from last quarter. Net Interest Income also rose less than 1% to Rs 65,554 crores. The bank shot up even after NPA rates increased, but results came above estimates. 

Grasim(-2.3%), Titan(-2.2%) and Tata Motors(-1.8%) saw profit booking and closed as top-losers after moving up in the last few days.  

Vodafone Idea once again crashed 19% to Rs 6, its lowest since June 2020. The stock is more than 50% down from its 52-week high made in January. Vodafone PLC said it has no plans to put in more funds to Vi. IndusTower(-6.9%) also crashed.

Along with this, banks that have given high loans to Idea remained weak. IDFC First Bank(-3.7%), PNB(-2.3%) and IndusInd Bank(-0.15%) closed in the red while Bank Nifty rallied. SBI was in the red in the morning, but went up after results were announced.

Competition Commission of India approves acquisition of the stake in PNB Housing by Carlyle Group. The stock closed in the 5% Upper Circuit.

Almost all auto stocks closed in the red with heavy selling pressure with concerns over chip shortage bringing down sales. Ashok Leyland(-4.2%), Bharat Forge(-2.6%), Tata Motors(-1.8%), Maruti(-1.3%) and M&M(-0.6%) fell in the day.

Maruti fell after reporting that its plant in Gujarat to have a partial production impact in August due to the semiconductor shortage.

Only Bosch India(+1.4%) closed in the green from Nifty Auto after announcing their results. Q1 consolidated net profit Rs 260 crores vs loss Rs 121 crores last year vs profit Rs 483 crores last quarter.    

Tata Steel BSL(+4.4%) moved up after reporting Q1 consolidated net profit Rs 2480 crores, up 25% from last quarter.

Markets Ahead

India’s July Services PMI came out at 45.4 vs 41.2 previous. The estimate was at 49. The general market saw heavy profit booking in the day. Banks were the ones mostly performing.

Nifty went on to touch nearly 16,300 today, as we expected yesterday. HDFC’s power continued and the stock gave Nifty a total of 50 out of 130 points today. 

SBI’s results did indeed shake up the market and pushed Bank Nifty to nearly 5-month highs above 36,200. The strong close above 36,000 also shows that there may be more to come.

Midcaps and smallcaps suffered the most with both falling heavily. Smart money by investors were flowing out of these stocks and into heavyweight stocks like HDFC. Nifty SmallCap100(-1%) and Nifty MidCap100(-1.1%) opened with a small gap-up and then it was pure profit booking till the end.

Going ahead, 16,000-16,050 will act as strong support for Nifty. For Bank Nifty, 35,200 will form as good support in the short term. Some profit booking can be expected tomorrow, with weekly expiry creating a lot of volatility in the market.

Also be sure to keep away from banks with high exposure to Idea, at least until there is clarity regarding the future of the company. This includes IDFC First Bank, Yes Bank, IndusInd Bank and more.

We talked about the setup looking bullish yesterday. It continues to look the same for next week, but I expect some profit booking tomorrow. We will also have to see how Nifty performs when today’s performers cool down, as most sectors saw heavy selling today.

How does your portfolio look now that Nifty has touched nearly 16,300? Is it in the green, or in the red? Let us know in the comments of the marketfeed app!

Catch you all at The Stock Market Show sharp at 6:30 PM!