Nifty Overview & Outlook

The Nifty, India’s benchmark index, started the day with a gap-down due to weak global markets but found support and rebounded to close slightly positive after a volatile trading session. The market remains in a consolidation phase, with the Bank Nifty also ending flat. In the broader market, the Midcap index outperformed, gaining 0.4%, while the Smallcap index underperformed, declining by 0.5%.

In sectoral performance, Nifty Auto and Nifty FMCG showed strong gains, outperforming the benchmark index. Nifty FMCG maintained positivity throughout the day, whereas Nifty Auto gained momentum after the first hour, both ending approximately 0.8% higher. Conversely, Nifty Media dragged the most, falling by 1.9%.

From a technical perspective, despite opening lower, the Nifty found support near the 23.6% retracement level of the previous upward rally, around 23,100, as previously mentioned in our outlook. This support led to a significant rebound during the day. If this bounce continues, potential buying interest may be seen above the 23,670 level, with resistance expected at 23,760 and 24,030. However, given the ongoing consolidation phase, a decline below the 23,100 mark could indicate further downside, with 22,750 identified as the subsequent support level.

Derivatives Overview & Outlook

Yesterday, long buildup was seen in Nifty, Banknifty and Finnifty futures with increase in open interest by 1.8% and 1% and 10.8% respectively, whereas Mid cap nifty futures rose on short covering as it shed around 10% of open interest.

Performance on the sectoral front was mix. Amongst them, long buildup was observed in Capital Goods, Cement, Finance, Realty and Textile stocks, whereas some long unwinding was seen in Chemical, Media and Pharma stocks.

On options front, put writing was seen at multiple strikes and maximum positions are at 23000 PE followed by 23400 & 24000 CE.

Institutional Trading Activity

Yesterday, FIIs sold stocks worth Rs 654 Cr in the cash segment, bought stocks futures worth Rs 3264 Cr and also bought index futures worth Rs 1776 Cr. DIIs were net seller in the cash segment to the tune of Rs 820 Cr.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 23620-23700; Supports 23500-23400

Banknifty – Resistances 51800-52000; Supports 51250-51000

Finnifty – Resistances 23150-23200; Supports 23000-22800

F&O Securities in Ban Today – BALRAMCHIN, CHAMBLFERT, GNFC, GRANULES, INDUSTOWER, PEL, PNB, SAIL.

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