Nifty Overview & Outlook

The Modi Government’s retention for a third consecutive term buoyed the Indian stock markets on Wednesday. The Indian benchmark index Nifty, experienced another day of extreme movement, recovering more than half of the previous day’s losses. Nifty started off with a positive bias and sustained an upward trajectory throughout the session, closing with a 3.4% gain. The Nifty Bank slightly outperformed the benchmark index, surging by 4.5%, majorly driven by private banks.

The broader market indices also showed optimism, with both the Midcap and Smallcap indices slightly outperforming the benchmark, gaining nearly 5% each. Sector-wise, the Nifty Metal index led with a 5.8% increase, followed by the Private Banking index, which gained 5%. All other sectoral indices ended in positive territory, indicating overall market optimism.

In Tuesday’s session, the Nifty managed to close above the 21800 mark, leading to a rebound in Wednesday’s trading. It closed above the 61.8% retracement level of the prior downward rally from its all-time high to the previous day’s low. Hence, we may see continuation of the bounce back to extend its rally further. We hold Resistance levels at 22900 and 23400, with daily volatility expected to persist until the swearing-in process is completed. On the downside, support levels are seen at 22340 and 22140.

Derivatives Overview & Outlook

Yesterday, long buildup was seen in Banknifty and Midcap nifty futures with increase in open interest by 13.4% and 14.3% respectively, whereas short covering was seen in Nifty & Finnifty futures as open interest shed by around 10.5% & 32.7% respectively.

All F&O sectors settled higher. Long buildup was seen among Automobile, Capital Good, Realty, Telecom and Infrastructure stocks, whereas short covering was seen among Banking, FMCG, Media and Technology stocks.

On option front, call writing along with put writing was seen at multiple strikes and maximum positions are at 24000 CE followed by 23000 CE while the maximum put positions are at 21000 closely followed by 22000 PE.

Institutional Trading Activity

Yesterday, FIIs sold stocks worth Rs 5656 Cr in the cash segment, bought stocks futures worth Rs 1891 Cr and also bought index futures worth Rs 2511Cr. DIIs were net buyer in the cash segment to the tune of Rs 4555 Cr.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 22800-23000; Supports 22200-22000

Banknifty – Resistances 49500-50000; Supports 48400-48000

Finnifty – Resistances 22000-22300; Supports 21200-20800

F&O Securities in Ban Today – ZEEL

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