5 July 2024 Punjab Khabarnama : On July 5, benchmark indices Nifty and Sensex ended their two-day gaining streak and traded lower on the stock market. This was due to investors booking partial profit after a strong rally earlier in the week. The Nifty Bank and auto stocks were the main contributors to the decline. At 9:25 am, the Sensex was down 0.57 percent at 79,590, while the Nifty slipped 0.44 percent to 24,194. Out of the total shares, 1,702 advanced, 1,191 declined, and 77 remained unchanged.
According to Ruchit Jain, an equity analyst at 5paisa, the markets have experienced a significant run-up in the last 8 to 10 trading sessions without any meaningful pullback move. As a result, momentum readings such as RSI on the lower time frame chart are in the overbought zone. However, Jain reassures that there is nothing to worry about as the market breadth is still solid. Today’s session is seeing pullback moves due to these overbought setups.
HDFC Bank, the largest private bank in India, attracted attention due to its weaker-than-anticipated business update for the April-June quarter (Q1FY25), which raised concerns among analysts. Brokerages became cautious about the bank’s high credit-to-deposit (CD) ratio, which could impact future margins. As a result, HDFC Bank shares declined by more than 3 percent in early trading.
In its Q1FY25 update, the lender recorded a strong 52.6 percent YoY growth in gross advances, amounting to Rs 24.87 lakh crore. However, this figure decreased by 0.8 percent compared to the previous quarter. Based on sectoral indices data, HDFC and Bandhan Bank were the most affected, resulting in Bank and Auto being the top losers. On the other hand, Pharma and Healthcare sectors experienced a gain of 0.4 percent each.
Kranthi Bathini, director of equity research at WealthMills Securities, stated that the market’s beauty lies in the successful rotation of leadership. When one sector slows down, another sector takes the lead, which contributes to the positive performance of the markets.
Meanwhile, the broader markets maintained their strong performance with the midcap index increasing by 0.1 percent and the smallcap index rising by 0.5 percent. It is worth noting that both the BSE midcap and smallcap indices have experienced significant growth, with a 15.4 percent and 19.6 percent increase respectively, in the month following the election result on June 4. This is in contrast to the 11 percent gain recorded by the Sensex and Nifty, according to official data.
On the other hand, the range of 24200-24150 is expected to offer some support in case of any minor setbacks, while the levels of 24100-24000 are crucial support levels in the short term.
