Jan 17th 2024 Stock Market Analysis

Nifty 50 and Sensex Experience Largest Single-Day Loss Since June 2022; Investors Witness Nearly ₹5 Lakh Crore Loss"

The equity benchmarks experienced their most significant single-day decline in 18 months as HDFC Bank's disappointing Q3 performance led to a slump in the banking sector, causing market turbulence on January 17. By the closing bell, the Sensex had dropped by 1,628.01 points or 2.23 percent, closing at 71,500.76. Similarly, the Nifty recorded a decline of 460.30 points or 2.09 percent, closing at 21,572. This marked their most substantial single-day fall since June 2022.

Bank Nifty witnessed a sharp decline of over 4 percent, marking its most significant drop since February 2022, as all 12 index stocks concluded the trading session in negative territory. HDFC Bank witnessed a significant downturn, closing 8.2 percent lower, marking its most substantial decline since March 30, 2020.The Bank Nifty index reached a monthly low of 46,064, experiencing a 4.3 percent decline, marking its most substantial drop in nearly two years.

The market commenced the day with a decline, influenced by subdued global cues, and as the day unfolded, the selling pressure persisted. Information technology stocks offered some support amid the overall market downturn.

In today's active market session, several stocks experienced notable movements. Among the top gainers, Apollo Hospitals (Apollohosp) traded at 5980.35 with a gain of +1.28%, followed by HCL Technologies (HCLTech) at 1572.95 with a gain of +1.13%, and Tech Mahindra at 1333 with a gain of +0.95%. These positive performances contributed to the overall market activity during the session.

On the flip side, top losers included HDFC Bank, which traded at 1542.15, registering a significant loss of -8.16%. Tata Steel also saw a decline, trading at 131.8 with a loss of -3.97%, followed by Kotak Mahindra Bank (Kotakbank) at 1778.5, experiencing a -3.76% loss. These downturns reflected the volatility and challenges faced by specific sectors in the current market environment. Notably, HDFC Bank emerged as the most active stock in terms of both value and volume traded, underlining its influence on the day's market dynamics.

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Technical Outlook on 18th Jan

We already mentioned yesterday that outlook profit booking expects until break the 22125 level that has exactly happened and now profit booking may continue up to 21441 levels and tomorrow intraday trade may be zig zag movements.

Bank Nifty may expect an immediate support near 45756 then 44832 and resistances are  46680 then 47296. Now the bank nifty is looking at a profit booking.

Derivative Outlook on 18th Jan

PCR Analysis: Nifty PCR-OI has decreased with nifty has negative close which shows CALL WRITING.

Open Interest Analysis: Nifty future JAN contract OI has decreased with negative close which shows Long Unwinding.

Cost of Carry Analysis: Nifty JAN month contract has ended in low compare with FEB contract and high range compare with previous session which indicates a mixed trade.

India VIX Analysis: India VIX has closed at 15.08 vs 13.54 (DoD) basis which shows increase in volatility.

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HDFC Bank Leads Nifty Losers with a 6% Drop Amid Investor Discontent over Flat Margins and Lower EPS Growth

On January 17, HDFC Bank's stock experienced a substantial decline of over 6%, emerging as the leading loser on the NSE Nifty 50. The primary reason behind this downturn was the bank's allocation of high provisions towards alternative investment funds (AIFs), limiting profit growth to 2.5% on a quarterly basis in the October-December period of FY24.

Analysts noted that a 4% sequential decline in the growth of earnings per share (EPS) coupled with flat margins left investors disappointed following the announcement of the bank's Q3 financials. Over the past year, HDFC Bank's stock, the largest private sector lender in the country, showed a modest gain of just over 5%, underperforming the Bank Nifty index, which recorded a significant surge of over 13%.