Broader markets underperform; banking stocks save the day for markets as Bank Nifty jumps over 2 per cent
Market Update at 3:00 PM: Indian markets continue to remain buoyant on Wednesday; however, they have come off from their day's high. What is more concerning is the fact that it's not the headline indices that have come off the day's high but instead, the market breadth!
Market breadth is in favour of declines as the broader markets have relatively underperformed the frontline indices with a wide margin. Nifty Midcap 100 and Nifty Smallcap 100 were down by over 1 per cent each.
Furthermore, the majority of the sectoral indices were trading in red with Nifty Realty being down by 1.73 per cent. On the other hand, Nifty Financial Services, Nifty Bank, and Nifty PSU Bank have advanced 2.68 per cent, 2.48 per cent, and 0.57 per cent, respectively.
The top four contributors to Nifty 50 are from the banking sector, which includes HDFC, ICICI Bank, HDFC Bank, and Kotak Mahindra Bank.
Market Update at 10:50 AM: Continuing their jubilant performance of the last trading session, the key benchmark indices have logged a fresh all-time high on Wednesday. Nifty is nearly a per cent up and inching close to 16,300 mark, while Sensex has crossed above the 54,400 mark, up by 1.10 per cent.
The showstoppers in today’s session are banking and financial stocks. HDFC twins and ICICI Bank have combinedly contributed a staggering 100 points in Nifty’s kitty.
On the options' front, 16,200 Put option has seen the addition of nearly 37 lakh shares in the open interest in today’s session itself. Meanwhile, addition in 16,250 Put option has also been in excess of 24 lakh shares, which indicates huge writing in these Put option strikes.
Tuesday turned out to be a historic day for Indian equity markets as Sensex & Nifty logged a fresh all-time high. Nifty and Sensex gained 1.55 per cent and 1.65 per cent, respectively, and closed at 16,130 & 53,823 levels.
Meanwhile, the performance from broader markets was a lackluster one as Nifty Midcap 100 and Smallcap 100 ended almost flat with Smallcap 100 ending with a minuscule loss. It was quite shocking to see that India VIX also jumped by 7.36 per cent; usually, an inverse relationship is seen between India VIX and Nifty.
Nifty formed a sizeable bullish candle on the daily chart and finally broke out of its almost 500-point range of the last two months in style as it surged past the landmark level of 16,000. Interestingly, the breakout was seen on the 34th day, which is a Fibonacci number.
With Nifty being in uncharted territory, all the moving averages have turned up. The MACD line moved above the signal line and it has given a buy signal. The RSI managed to close above the 65 zone as well as its prior swing high. To continue this explosive move, a follow-through day is very important. Hence, we need to watch out whether we see a follow-through day or not. Now, on the upside, the target for Nifty is based on the depth of the consolidation pattern that comes around 16,400-16,462.
All eyes will be on Bank Nifty on Wednesday as State Bank of India (SBI) is scheduled to announce its numbers. Besides, on Tuesday, Bank Nifty had formed a sizeable candle but it is still trading below the gap area of July 19 and it is also seen stuck in a range of almost 1,200-1,300 points from the last couple of weeks. Hence, a decisive breakout of this range could trigger a fresh momentum.