The Nifty index, trading above key levels, is expected to continue its bullish momentum, according to analysts, following its strongest weekly performance on Friday. Leading the gains were the Nifty Metal, IT, Realty, and Healthcare sectors, while the Nifty Private Bank and FMCG sectors lagged.
"For the trend following traders now, 24,675-24,600/80,900-80,600 would act as a key support zone. On the higher side, 25,000/81,600 could be the immediate hurdle for the bulls," according to Amol Athawale, VP-Technical Research, Kotak Securities.
"We are of the view that the short-term market texture is bullish, but due to temporary overbought conditions, we could see range-bound activity in the near future," he said.
"Further upside may also continue, which could lift the market up to 25,150/82,200. On the flip side, below 24,600/80,600, the sentiment could change. Below the same, traders may prefer to exit from trading long positions," he cautioned traders.
Technically, the index formed a significant bullish candle on both the daily and weekly scales, indicating underlying strength, according to Hrishikesh Yedve, AVP of technical and derivatives research at Asit C Mehta Investment Intermediates Ltd. "If the index sustains above 24,860, it may attempt to test the psychological level of 25,000," he said.
The Bank Nifty index closed positively at 51,296 levels.
"For Bank Nifty traders, now, the 50-day SMA or 50,500 would be the immediate reference point. Above which, it could bounce back up to 51,800–52,100. However, below 50,500 or 50-day SMA, it could slip to 50,000–49,900," said Athawale.
"On a daily scale, the index formed a bullish belt hold pattern and successfully maintained above 51,100 on a weekly basis, signalling strength. In the short term, 51,800–52,000 will serve as resistance levels for the Bank Nifty," said Yedve.
F&O Action
The Nifty August futures are up 1.88% to 24,915.45 at a premium of 80.6 points, with open interest up by 9.54%.
Nifty Bank July futures are up by 0.75% to 51,299.1 at a discount of 3.15 points, while its open interest is down by 4.19%.
The open interest distribution for the Nifty 50 Aug. 1 expiry series indicated most activity at 25,000 call strikes, with 21,750 put strikes having maximum open interest.
For the Bank Nifty options July 31 expiry, the maximum call open interest was at 53,000 and the maximum put open interest was at 39,500.
FII/DII Activity
Overseas investors turned net buyers on Friday after three days of selling.
Foreign portfolio investors mopped up stocks worth Rs 2,546.38 crore, while domestic institutional investors remained net buyers for the fourth consecutive sessions and bought equities worth Rs 2,774.31 crore, the NSE data showed.
Market Recap
India's benchmark equity indices snapped five consecutive days of fall to end at their highest closing levels on Friday. On a weekly basis, the Nifty recorded its best streak of weekly gains since eight weeks ended Jan. 22, 2018.
Both indices ended at their highest closing levels. The Nifty closed at 24,834.85, up 1.76%, or 428.75 points, and the Sensex closed at 81,332.72, up 1.62%, or 1,292.92 points.
The Nifty also hit its intraday high of 24,861.15 points in the last minute of trade. Both the indices rose 1.8% intraday.
Broader markets outperformed benchmark indices. The S&P BSE Midcap and Smallcap indices ended 2.12% and 1% higher, respectively.
On the BSE, 20 sectors ended on a positive note, with S&P BSE Telecommunication emerging as the top gainer. S&P BSE Oil & Gas rose the least.
Major Stocks In News
Godrej Properties: Chandigarh Estate Officer has revoked building plans and occupancy certificate of company’s commercial building due to - alleged violations of conditions of environmental clearance.
KEC International: The company approved the transfer of cables business on going concern basis to its subsidiary. The company approved raising of up to Rs 4,500 crore via QIPs and 1,500 crores via NCDs on Private Placement basis.
BHEL: The company received order worth Rs 10,000 crore from Damodar Valley Corporation for setting up 2x800 MW thermal power station at Koderma, Jharkhand.
Maruti Suzuki: The company received final assessment order with income tax demand of Rs 779 crore and received show cause notice for initiation of penalty proceedings.
City Union Bank: The company approved raising up to Rs 500 crore via QIP.
Glenmark Life Sciences: Gujarat Pollution Control Board issued a closure notice to company’s Ankleshwar facility.
Global Cues
Asian markets opened higher, taking positive cues from the US markets and ahead of key decisions from major central banks around the world.
Equity futures in Australia, Japan and Hong Kong began with early gains. The Nikkei 225 was trading 850 points or 2.28% higher at 28,527, while the S&P ASX 200 was 77 points or 0.98% up at 7,998 as of 06:26 a.m.
Japan, US and the UK central banks will announce key decisions this week. Markets anticipate the US Federal Open Market Committee meet this week to announce the much-anticipated interest rate cuts. Tech giants, such as Microsoft, Meta Platforms, Apple and Amazon, will announce their earnings results over the course of the week.
Last week, there was a dip in the US markets following underwhelming results from mega-caps. Most AI stocks, such as Tesla and Alphabet, brought the markets down last week. Apple has announced that their AI features will come only a month after their usual September launches.
The S&P 500 Index and Nasdaq Composite advanced 1.11% and 1.03%, respectively as of Friday. The Dow Jones Industrial Average rose 1.64%.
Brent crude was trading 0.47% higher at $81.51 a barrel. Gold was 0.55% up at $2,400.24 an ounce.
Key Levels
US Dollar Index at 104.2720
US 10-year bond yield at 4.18%
Brent crude up 0.17% at $81.27 per barrel
Bitcoin was up 0.75% at $68,520.5000
Gold spot was up 0.55% at $2,400.24
Money Market Update
The Indian rupee closed at a record low on Friday due to rising oil prices and month-end dollar demand from importers.
The local currency weakened 3 paise to a record closing low of Rs 83.72 per dollar; it opened at Rs 83.72 against the greenback. It had closed at Rs 83.70 on Thursday.
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