Nifty Overview & Outlook

The Indian benchmark index Nifty started August on a strong note, opening above the 25,000 mark. The Federal Reserve, in its policy meeting, hinted at a possible rate cut in September as the US economy nears normalization, while maintaining rates unchanged for the eighth consecutive time. Thereby, Nifty began the session with a gap up driven mainly by strong performance from energy sector leaders. Yet, weaker performances from other major sectoral indices led Nifty to end slightly up by 0.2%. The Bank Nifty remained flat, dragged by a 1% decline in the PSU Banking index.

On a broader scale, Midcap and Smallcap indices underperformed significantly, falling by 0.8% and 1% respectively. Sector-wise, the Nifty Energy index stood out with a 2% increase, while the Nifty Media and Nifty Realty indices declined the most by 1.9% and 1.7% respectively. Overall market breadth was negative, with 160 stocks advancing and 339 declining.

From a technical perspective, Nifty saw a modest rise after three consecutive days of movement but formed a Doji pattern, indicating a lack of strong trading interest. The index maintained its pattern of positive openings followed by sell-offs, closing flat. On an intraday basis, we observed a Symmetric Triangle pattern with a breakout, pullback, and subsequent bounce, suggesting a potential continuation of the upward trend. Thereby, we maintain Resistance levels at 25190 and 25270. In case of reversal amid lack of upside momentum, we hold support levels at 24870 and 24645.

Derivatives Overview & Outlook

Yesterday, no significant activity was seen in Nifty, Banknifty and Finnifty futures on price front, whereas on open interest front, Nifty and Banknifty futures added around 2% and 4% of open interest respectively while Finnifty futures shed around 2% of open interest.

Majority of F&O sectors settled lower. Amongst them, Chemical, Infrastructure and Metals stocks witnessed maximum addition of short positions whereas some long unwinding was seen among Media, Oil & Gas and Textile stocks.

On option front, Nifty will start the new weekly contracts with maximum position at 26000 CE followed by 25000 CE and 24000 PE followedby 25000 PE.

Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 2089 Cr in the cash segment, bought stocks futures worth Rs 1627 Cr also bought index futures worth Rs 1390 Cr. DIIs were net seller in the cash segment to the tune of Rs 337 Cr.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 25080-25120; Supports 25000-24950

Banknifty – Resistances 51800-52050; Supports 51400-51200

Finnifty – Resistances 23600-23700; Supports 23450-23380

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