The resistance levels for Nifty 50 are expected to be around the 25,150–25,350 levels, according to analysts, as long as the index holds above the low of 24,690 levels. Nifty snapped its six-session losing streak to end higher on Tuesday, with investor sentiment influenced by the vote count for assembly elections in Haryana and the Union Territory of Jammu and Kashmir, alongside ongoing concerns in the Middle East.
The volatility index, INDIA VIX, cooled off by 3.26%, settling at 14.59, indicating a drop in market volatility.
Technically, on the daily chart, the index formed an insider bar candlestick near short-term trend line support and the previous demand zone. Thus, as long as the index holds above the low of 24,690, levels of 25,150–25,350 could be possible, according to Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd.
Investors should adopt a 'buy on dips' strategy for the short term in the Nifty index, advised Yedve.
On the upside, the market could sustain its pullback momentum toward the 25,150-25,200 zone, with resistance potentially extending to 82,000-82,300, according to Shrikant Chouhan, head of equity research at Kotak Securities. "However, if the index dips below 24,850/81,100, the sentiment could shift, and traders may consider exiting long positions," Chouhan added.
"However, as the volatility subsided, the index demonstrated a gradual upward trend, concluding in the upper quartile of the trading range, with 50 daily MA serving as immediate resistance. The index successfully maintained the pivotal support near number 24,750," by Ameya Ranadive of StoxBox.
Bank Nifty, which closed at 51,021 on Tuesday, faces a short-term resistance level around 51,800, according to Yedve. "Technically, on the daily chart, the index also formed an insider bar candle near the previous demand zone, indicating strength. As long as the index holds above 50,190, a 'buy on dips' strategy is advisable," Yedve stated.
F&O Action
The Nifty October futures were up 0.65% to 25,148 at a premium of 135 points, with the open interest up by 1.5%
The Nifty Bank October futures were up by 0.82% to 51,392 at a premium of 371 points, while its open interest was up by 3.2%.
The open interest distribution for the Nifty 50 Oct. 10 expiry series indicated most activity at 27,950 call strikes, with 23,100 put strikes having maximum open interest.
For the Bank Nifty options expiry on Oct. 9, the maximum call open interest was at 53,000 and the maximum put open interest was at 48,000.
FII/DII Activity
Overseas investors, remained net sellers of Indian equities for a week straight on Tuesday.
FPIs offloaded stocks worth Rs 5,729.60 crore, while domestic institutional investors bought stocks worth Rs 7,000.68 crore, according to provisional data from the National Stock Exchange.
Market Recap
Indian benchmark indices, snapped their six-session losing streak to end higher on Tuesday, with the Nifty closing at 25,013.15, up 217.40 points, and the Sensex at 81,634.81, gaining 584.81 points. Intraday, both the indices gained 1% and 0.88%, respectively.
The indices were led by heavyweights HDFC Bank Ltd., Infosys Ltd., and Reliance Industries Ltd.
Nifty Media led sectoral gains and rallied over 3%, with Saregama India Ltd. surging over 9% intraday on reports of its potential acquisition of Karan Johar's Dharma Productions. Whereas Metal index shed nearly 1%.
The indices ended higher even as most global markets fell, and investors now await the outcome of the monetary policy committee meeting due on Wednesday.
Major Stocks In News
Tata Power, JSW Energy: Nomura has initiated coverage for the company's with a 'buy' rating while sounding bullish about India's renewable energy sector.
Hyundai Motor India: The company will launch what is seen as India's largest initial public offering on Oct. 15, 2024. The anchor portion will open for subscription on Oct. 14. A listing is likely on Oct. 22.
Torrent Power: The company wins 2,000 MW energy storage contract in Maharashtra.
Global Cues
Stocks in the Asia-Pacific region opened higher on Wednesday, tracking an overnight rally on Wall Street as information technology companies lifted the benchmarks.
The Japanese benchmark Nikkei 225 was 445 points, or 1.13% higher at 39,345, while Australia's S&P ASX 200 was up 29 points or 0.37% at 8,206.
The stock market in China will open less frantically than the previous session after it gave up early gains as investors were disappointed by the lack of anticipated big measures to revive the economy.
Equity benchmarks in the US closed near all-time highs after the technology heavyweights powered stocks higher. The Bloomberg gauge of the 'Magnificent Seven' megacaps climbed 1.7%.
The Federal Open Market Committee minutes, due Wednesday, will provide insight into the degree of consensus behind September's 50 basis-point rate cut.
Wall Steet posted gains amid growing expectations of a small rate cut in the November Fed meeting. The 10-year Treasury yields were little changed at 4.02% on Tuesday.
The S&P 500 and Nasdaq Composite advanced 0.97% and 1.45%, respectively. The Dow Jones Industrial Average climbed by 0.30%.
Key Levels
US Dollar Index at 102.49
US 10-year bond yield at 4.01%.
Brent crude up 0.43% at $77.51 per barrel.
Bitcoin was 0.4% down at $62,097.65
Gold spot was up 0.02% at $2,622.32
Money Market
The Indian rupee closed 2 paise higher at 83.96 against the US dollar on Tuesday, gaining some strength after closing at 83.98 on Monday.
The local currency strengthened as both the dollar and Brent crude dipped, with traders booking profits after recent rallies driven by escalating tensions in the Middle East. The dollar index slipped by 0.15% to 102.3840, while Brent crude prices fell 2.08% to $79.25 per barrel.
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