Nifty Overview & Outlook

Indian benchmark indices shot up on the assertion by the Exit Polls regarding a victory for the BJP-led NDA Government in the 2024 elections. Nifty up-move was driven by Adani group and PSUs stocks. The Nifty index, surged to an all-time high with an enthusiastic gap-up opening, resulting in an increase of over 700 points or 3.3% from the previous close. Similarly, the Bank Nifty experienced its first all-time high since April 30 after a gap-up opening, soaring by 4.1%, largely driven by gains in PSU Banks.

Looking at the broader market performance, the Midcap index slightly outperformed, posting gains of 3.5%, while the Smallcap indices lagged behind with relatively moderate gains of just 1.7%.

In terms of sector-specific movements, all sectors closed in the green, with PSU Banking leading the charge, gaining 8.4%, followed by Energy and Realty indices, which saw increases of 6.8% and 6% respectively. Defensive sectors like IT and Pharma saw marginal gains of 0.4% each.

Considering the daily timeframe, the Nifty has broken out of the upward sloping channel pattern we’ve been monitoring, closing above the resistance zone of 23100-23150. This suggests a potential continuation of the rally, with immediate resistance levels at 23425 and 23700. However, the Nifty experienced a gap-up opening followed by a Hanging Man formation at the peak, indicating potential profit booking if the reversal is confirmed in the upcoming session . In case of a correction, we identify 23120 as the immediate support level, followed by 22875.

It’s important to remain cautious ahead of the Election result on 4th June.

Derivatives Overview & Outlook

Yesterday, long buildup was seen in Banknifty and Finnifty futures with increase in open interest by 2% and 39.7% respectively. Whereas short covering was seen in Nifty and Midcap nifty futures with decrease in open interest by 2.9% and 25.3% respectively.

All F&O sectors settled higher. Amongst them, Chemical, Pharma, Technology and Telecom stocks witnessed maximum addition of long positions whereas some short covering was seen among Cement Infra and Power stocks.

On options front, put writing along with call writing was seen at multiple strikes and maximum positions are at 22500 PE followed by 22000 & 24700 CE closely followed by 24000 CE.

Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 6851 Cr in the cash segment, bought stocks futures worth Rs 5968 Cr and also bought index futures worth Rs 7806 Cr. DIIs were net buyer in the cash segment to the tune of Rs 1914 Cr.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 23800-24000; Supports 23250-23180

Banknifty – Resistances 52000-52300; Supports 50300-50000

Finnifty – Resistances 23000-23200; Supports 22400-22200

F&O Securities in Ban Today – ZEEL

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