Nifty Overview & Outlook

The Nifty benchmark index started the session positively, reaching a new record high supported by IT giants amid expectations of a Federal Reserve interest rate cut. However, the enthusiasm waned and Nifty remained lackluster throughout the session, resulting in a marginal gain of 0.3% at the close. Similarly, the Bank Nifty closed in line with the benchmark index despite strong performance from PSU Banks, while the Private Banking index ended unchanged.

In the broader market, both the Midcap and Smallcap indices outperformed the benchmark, closing approximately 1% and 0.7% higher, respectively.

Sector-wise, Nifty PSU Banks led with a substantial gain of 3.1%, followed by a 1.5% surge in Nifty Media. Most other sectors closed in positive territory, except for the Nifty IT index which reversed its early gains to end marginally down by 0.3%. Market breadth remained positive with 298 stocks advancing and 201 declining.

Technically, although Nifty achieved another record level, it failed to sustain the initial optimism and closed with a Doji candlestick pattern, often signaling a potential reversal on confirmation. We maintain our resistance levels at 24,710 and 24,840, while settling our support levels slightly higher to 24,445 and 24,330 in anticipation of a correction.

Derivatives Overview & Outlook

Yesterday, Nifty and Banknifty futures added around 3% and 4.5% of open interest respectively as long buildup, Finnifty futures shed around 1.5% of open interest as short covering whereas no significant activity was seen in Midcap Nifty futures on open interest front.

Majority of F&O sectors settled higher. Amongst them, FMCG, Textile, Pharma and Auto stocks witnessed maximum addition of long positions. Some short covering was seen among IT, Realty, Power and Cement stocks.

On options front, put writing was seen at multiple strikes and maximum positions are at 24500 PE and 25000 CE. In Banknifty maximum positions are at 52000 PE and 53000 CE.

Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 2685 Cr in the cash segment, bought stocks futures and index futures worth Rs 4790 Cr and 1335 Cr respectively. DIIs were net sellers to the tune of Rs 331 Cr in the cash segment.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 24600-24700; Supports 24480-24300

Banknifty – Resistances 52800-53000; Supports 52000-51800

Finnifty – Resistances 23800-23900; Supports 23550-23480

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