Nifty Stays Above 24,000 Despite Friday's Fall; Bank Nifty Loses Steam as Earnings Impact Sentiment

Strategic Insights -

Nifty50 ended the April series on a positive note, driven by strong support from Banking & Finance stocks, followed by FMCG, while IT was the biggest laggard, along with Metals and Mining. The sector-wise analysis reveals that Cement, Auto-Ancillary, Retail, and Chemicals saw the highest rollovers, while Healthcare and Power had the lowest. The highest long buildup was observed in Banks, Consumer Durables, and Telecom, signaling optimism in these sectors.

Key Takeaways:

  • Nifty50 ended the April series with a positive note, supported by Banking & Finance stocks and FMCG, while IT was the biggest laggard.
  • The sector-wise analysis shows that Cement, Auto-Ancillary, Retail, and Chemicals had the highest rollovers, while Healthcare and Power had the lowest.
  • The highest long buildup was observed in Banks, Consumer Durables, and Telecom, indicating optimism in these sectors.
  • Bank Nifty erased most of the gains made in the first three days post earnings numbers from Axis Bank, driven by Axis bank and HDFC Bank's decline.
  • Several banks are coming out with earnings next week, including SBI, Kotak bank, Indian bank, IOB, CUB, Bandhan bank, Equitas Small Fin bank, Uco, and IDBI, which could impact Bank Nifty's sentiment.
  • SBI, which had the lowest rolls in 6 months, is expected to make earnings announcement next week.
  • The Nifty 500 constituents showed a sign of negativity with 91% closing below the previous day's close, and 37% slipping below their respective 10-day SMA.
  • A potential end to the ongoing rally or a pause is expected, with an evening star formation followed by a solid down move at the top of a relentless upmove.
  • The support offered by the March peak lends hope for a quick resumption of uptrend, but a push beyond 24,190 is required for a rally continuation.

Statistics:

  • Nifty50 rollover rate for March stood at 79.08%, falling short of the 3-month average of 79.58%.
  • Bank Nifty's rollover was 75.05%, down from 76.98% in March.
  • In April, 78% of stock futures ended on a positive note, a slight decrease from March's 79%.
  • The highest long buildup was observed in Banks (23.8%), Consumer Durables (16.9%), and Telecom (15.5%).
  • 91% of the Nifty 500 constituents closed below the previous day's close on Friday.
  • 37% of Nifty 500 constituents slipped below their respective 10-day SMA on Friday.

Sources:

  • Anand James, Chief Market Strategist at Geojit Investments
  • IE Online Media Services Pvt. Ltd., distributed by Contify.com