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Nifty Overview & Outlook

Tracking weakness in the US markets, the Indian benchmark index, Nifty, opened Monday’s session with a gap-down. US futures, particularly in the IT sector, saw a sharp decline after Chinese AI start-up DeepSeek challenged major US tech giants with its advanced AI models, which appear to be both more efficient and cost-effective. Additionally, external factors such as Donald Trump’s aggressive policy announcements and the Bank of Japan’s 25 bps interest rate hike further dampened market sentiment, leading to continued selling by foreign investors.

Nifty dropped 1.1%, while the Bank Nifty showed relatively better performance, declining by just 0.6%, supported by a positive 1% plus move in ICICI Bank. In the broader market, both the Midcap and Smallcap indices underperformed significantly, falling 2.7% and 3.7%, respectively. On the sectoral front, all indices closed in the red, with Nifty Media suffering the biggest loss of 4.7%. Nifty Private Banking index witnessed the smallest decline, shedding just 0.5%.

From a technical standpoint, Nifty has broken below the critical support zone of 23000-22980 but has found some support at the downward-sloping trendline level of 22780. Given this, there could be some short covering in the near future, provided 22780 holds on a closing basis. In this scenario, 23000 will act as a support turned resistance, followed by 23350. If Nifty falls below 22780, the next support level to watch is 22520.

Derivatives Overview & Outlook

Yesterday, all F&O indices witnessed addition of short positions. Amongst them, Nifty, Banknifty, Finnifty and Midcapnifty added around 2.5%, 4%, 5% and 13% of open interest respectively.

On the sectoral front, Pharma and FMCG stocks were down on short buildup while rest of the F&O sectors were down on long unwinding.

On option front, call writing along with some put addition was seen at multiple strikes. Maximum call positions are at 24000 CE followed by 23000 CE and 22000 PE followed by 22500 strike. The quantum of call positions are still higher than than that of put writing indicating towards a sell on rise approach for Nifty index.

Institutional Trading Activity

Yesterday, FIIs sold stocks worth Rs 5015 Cr in the cash segment, bought stocks futures worth Rs 2951 Cr and sold index futures worth Rs 34 Cr. DIIs were net buyers in the cash segment to the tune of Rs 6642 Cr.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 22920-23000; Supports 22780-22700

Banknifty – Resistances 48200-48400; Supports 47700-47500

Finnifty – Resistances 22600- 22700; Supports 22420-22500

F&O Security in Ban Today: INDIAMART,  MANAPPURAM, MGL, PNB.

Important Results Today : BAJAJ–AUTO, BHEL,CIPLA, EXIDEIND, HINDZINC, IOC, M&MFIN, TVSMOTOR, VIPIND.

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