Federal bank declines ahead of Q1FY24 results, LTIMindtree included in Nifty 50 benchmark

Technical Overview – Nifty 50

NIFTY50 on the 13th of July, witnessed a gap-up opening and scaled a fresh all-time high at the 19567 mark but digging deeper bulls struggled to find a foothold despite strong positive global cues.
The index on the intraday chart witnessed a breakout of a rectangle pattern and sustained above the 19,500 mark in the pre-lunch session. But later on, a last-hour profit booking impacted heavily and prices failed its bullish breakout pattern and closed at 19,413 levels.

The market breadth from the last couple of days has shifted toward bears suggesting strong resistance near higher levels. The highest OI on the call side is placed at 19,500 followed by 20,000 and the highest OI on the put side is placed at 19,500 followed by 19,400. Option data seems to be in the favor of bears and the option chain suggests the same as PCR stands at 0.83.

The immediate support for the Nifty stands near its 9 EMA which is placed at 19,300 levels and the upper band for the index is capped below 19,500 – 19,550 levels

Technical Overview – Bank Nifty

The banking index presently underperforms the benchmark index and has formed a consecutive 5 red candles on the daily time frame. The Banking index on 13th July witnessed a strong gap-up opening but could hold on to its opening gains and drift lower as the day progressed.

The 21 EMA is expected to act as an immediate support for the banking index which is placed at 44,500 levels. The highest OI on the call side is placed at 45,000 followed by 46,000 and the highest OI on the put side is placed at 45,000 followed by 44,000. Option data seems to be in the favor of bears and the option chain suggests the same as PCR stands at 0.69.
The momentum oscillator RSI (14) is slowly approaching 50 levels with a bearish crossover. 

The MACD indicator has witnessed a negative crossover above its line of polarity. Bank Nifty is approaching the retest of a breakout level of 44,400-44,300 on the charts and on the higher side facing stiff resistance at 45,000 mark.

Indian markets:

• Key equity indices reached record highs but later saw gains trimmed. Nifty crossed the 19,400 level after dropping to 19,385.80 in late trade.
• Volatile trading due to the expiry of weekly index options on the NSE.
• IT and realty shares rallied, while PSU banks and media shares declined.
• Global shares increased after US consumer inflation data was lower than expected. Expectations rose that the US Federal Reserve will postpone interest rate hikes. The delayed rate hike is seen as a positive sign for the global economy.

Global Markets

• Markets in Europe and Asia advanced on Thursday after the U.S. inflation rate for June came in lower than expected.
• South Koreas central bank held its benchmark interest rate unchanged at 3.5%, the fourth straight meeting the Bank of Korea has done so after last hiking rates in January. The BOK also forecasted that inflation will rise to around 3% after August, and added the need for an additional hike will be judged while assessing the changes in domestic and external policy conditions.
• US stocks advanced Wednesday, following a surprisingly benign US inflation report that raised hopes the Federal Reserve will soon end its monetary tightening campaign.
• The Bureau of Labor Statistics closely watched consumer price index increased by 3.0% annually, down from 4.0% in May. Meanwhile, core CPI, which strips out more volatile items like food and energy, cooled to 4.8% yearly and 0.2% monthly.

Stocks in Spotlight

• Hindalco Industries witnessed a 2.5 percent increase in its stock price following the approval of a land sale plan. During a board meeting on July 12, the company gave the go-ahead to sell land located in Kalwa, Maharashtra. The buyer, Birla Estates Pvt Ltd (a subsidiary of Century Textiles), will acquire the land for a total amount of Rs 595 crore. The payment will be received in multiple installments over a specified period of time.
• Federal Bank experienced a decline of over 5.5 percent as investors awaited its Q1FY24 results announcement. Market expectations suggested that the bank’s net interest margin (NIM) would continue to face pressure. According to a CNBC-TV18 poll, the private sector lender is projected to report a net profit of Rs 837.9 crore for Q1FY24, compared to Rs 600.7 crore in the same period last year. While the net interest income (NII) is anticipated to increase to Rs 1,963.2 crore, the NIM is expected to decline due to a rise in the cost of funds. The NIM for Q4FY23 stood at 3.31 percent.
• LTIMindtree saw a gain of over 1 percent as it was included in the Nifty50 benchmark, replacing HDFC which merged with HDFC Bank. The National Stock Exchange (NSE) had announced this decision earlier in the month.

News from the IPO world🌐

• Utkarsh Small Finance Bank IPO sees oversubscription on th back of brisk growth propects
• Netweb Technologies IPO to open on July 17
• ESAF SFB files for IPO a third time, scales down size.

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