Nifty Overview & Outlook

After the Budget day, the Indian benchmark index Nifty started the session on a negative note and maintained a downward trend throughout the day following the announcement of increased equity taxes by the Finance Minister. However, a recovery in Reliance Industries, following a sharp decline over three trading sessions, cushioned the benchmark index, resulting in a marginal loss on closing basis. Nifty closed 0.3% lower, while Bank Nifty continued to underperform with a 0.9% decline, primarily impacted by Axis Bank among private banks.

In contrast, broader markets outperformed the benchmark index, with the Midcap and Smallcap indices closing higher by 0.7% and 1.9%, respectively. The Nifty Media index showed the strongest performance, rising by 2.5%, followed by the Nifty Energy index which gained 1.2%. Conversely, Nifty Bank recorded the largest decline, falling by 0.9%. Market breadth remained largely positive, with 344 stocks advancing and 154 declining, indicating weakness primarily in the banking and non-banking financial frontline stocks.

From a technical perspective, Nifty closed with slight losses, continuing its consolidation phase after recent volatility. With, the ongoing formation of a Head & Shoulders pattern we maintain our current key resistance levels at 24560 and 24690, with support levels seen at 24330 and 24140. Activation of the Head & Shoulders pattern would occur below 24140, while its formation would be invalidated upon breaking the recent peak.

Derivatives Overview & Outlook

Yesterday, short buildup was seen in Nifty and Banknifty futures with increase in open interest by 8.7% and 12.2% respectively. On the other hand, Finnifty futures open interest shed around 5% on long unwinding.

Nifty and Banknifty futures have rolled 48% & 47% of open interest each into next contracts so far.

On options front, put writing along with call writing was seen at multiple strikes and maximum positions are at 24000 PE and 25000 CE closely followed by 24500 CE.

Institutional Trading Activity

Yesterday, FIIs sold stocks worth Rs 5131 Cr in the cash segment, sold stocks futures worth Rs 3008 Cr and also sold index futures worth Rs 3588 Cr.  DIIs were net buyer in the cash segment to the tune of Rs 3137 Cr.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 24500-24600; Supports 24100-24300

Banknifty – Resistances 52000-52400; Supports 50800-50600

Finnifty – Resistances 23400-23600; Supports 23000-22950

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