Nifty formed a big red candle, indicating weakness, according to analysts. The index is approaching close to the previous demand zone of 24,690. If Nifty sustains below this level, further downside could be likely, taking it towards 24,500–24,400 levels, according to Shrikant Chouhan, head equity research, Kotak Securities said.
"The daily chart depicts a strong domination of bears, but the index stands at a strong support level of 24,750 (tested on 9th September and 7th October)," Aditya Gaggar, director of Progressive Shares, said.
According to Chouhan, the market texture is weak, and the weak sentiment is likely to continue as long as Nifty trades below 24,900/81,500.
According to Chouhan, the 21-day Exponential Moving Average (21-DEMA) at 25,185 is the next level of immediate resistance on the upside.
"A sell-on-rise strategy is recommended, with stop-losses positioned above these resistance levels. It is crucial to keep a close eye on the 24,700 level, as a breach here could confirm further downside momentum. Traders should remain cautious and avoid carrying any long positions until there is further confirmation of an upside move," Hardik Matalia, derivative analyst at Choice Broking, said.
The Bank Nifty index has formed a big bearish candle, indicating weakness technically on a daily scale. On the downside, the 100-day Exponential Moving Average (100-DEMA) is placed near 51,050 levels, according to Hrishikesh Yedve, AVP Technical and derivatives research at Asit C. Mehta Investment Intermediates Ltd.
"Thus, 51,000-51,050 will offer good support for Bank Nifty in the short term. If the index sustains below 51,000, further weakness could be expected," Yedve said.
The India VIX increased by 2.57% to 13.39. This indicated a rise in market volatility and growing uncertainty, which could lead to increased price fluctuations, according to Matalia. Who recommended that traders remain cautious?
"Open interest data shows the highest OI on the call side at the 24,900 and 25,000 strike prices, signalling strong resistance levels. On the put side, OI is concentrated at the 24,700 and 24,500 strike prices, highlighting these as key support levels," Matalia said.
Market Recap
India's benchmark equity indices extended losses for the third straight session to record their lowest closing in nearly two months on Thursday as some of the quarterly results of key companies failed to impress the market.
Investors now will assess the quarterly results of heavyweight IT companies, including Wipro and Infosys, to be announced later in the day, as well as those of Axis Bank for direction.
At close, Nifty fell 0.89% or 221.45 points, to 24749.8 and Sensex ended 0.6% or 494.75 points, lower at 81006.61. Intraday, the Nifty fell 0.97%, and the Sensex fell 0.7%
Also Read: Nifty, Sensex End Near Two-Month Low; Bajaj Auto, Shriram Finance Top Losers: Market Wrap
F&O Action
The Nifty October futures was down 0.81% to 24,845 at a premium of 95 points, with the open interest down by 1.4%.
The Nifty Bank October futures was down by 1.1% to 51,491 at a premium of 203 points, while its open interest was up 2.8%.
The open interest distribution for the Nifty 50 Oct. 24 expiry series indicated most activity at 26,000 call strikes, with the 23,500 put strikes having maximum open interest.
For the Bank Nifty options expiry on Oct. 23, the maximum call open interest was at 52,000 and the maximum put open interest was at 43,000.
FII/DII Action
Overseas investors, commonly known as foreign portfolio investors, remained net sellers of Indian equities for the 14th consecutive session on Thursday, while domestic institutional investors stayed net buyers for the 18h straight session.
The FPIs offloaded stocks worth Rs 7,421.4 crore, the highest this week, according to provisional data from the National Stock Exchange. The DIIs bought stocks worth Rs 4,979.8 crore.
Major Stocks In The News
Infosys: In its latest results, Infosys reported a revenue increase of 4.3% over the last quarter, reaching Rs 40,986 crore for the quarter ending in September. This figure surpassed the Rs 40,820 crore forecast by analysts surveyed by Bloomberg. Infosys updated its revenue forecast for the financial year ending March 2025, raising it to 3.75-4.5% in constant currency terms, an increase from the previous estimate of 3-4%. The company maintained its margin guidance at 20-22%. On a year-on-year basis, revenue growth in constant currency terms was 3.3%, while it increased by 3.1% sequentially. For the first half of fiscal 2025, revenue growth stood at 2.9% year on year.
Wipro: Wipro reported a 6.2% sequential increase in net profit, reaching Rs 3,227 crore for the quarter ending September 30, 2024. This figure exceeds the consensus estimate of Rs 3,009 crore from analysts tracked by Bloomberg. In the previous quarter, Wipro's net profit was Rs 3,037 crore. The company’s revenue for the second quarter rose by 1.5% sequentially to Rs 22,302 crore, which aligns closely with the consensus estimate of Rs 22,235 crore from analysts.
Indraprastha Gas: GAIL (India) Ltd. announced a reduction in its domestic gas allocation to the firm, effective Oct. 16. The new allocation is approximately 21% lower than the previous amount. This cut is anticipated to negatively affect the company's profitability. To mitigate the impact, the company is currently in discussions with key stakeholders.
Global Cues
Most stocks in the Asia-Pacific region declined in early trade on Friday taking mixed cues from Wall Street as traders dialled down rate cut bets on strong retail sales data.
Australian benchmark S&P ASX 200 was 64 points, or 0.8% lower at 8,290, while the South Korean Kospi was down 6 points, or 0.18%, at 2,605 as of 6:00 a.m.
Meanwhile, strong retail sales in the US helped traders trim their bets on Federal Reserve rate cuts this year. Sales data in September rose more than forecast. The value of retail purchases increased 0.4% after a 0.1% gain in August.
Treasury yields in the US climbed with bond market taking a hit as rate cuts hopes were trimmed. The 10-year yields advanced seven basis points to 4.09%. Traders foresee less than a half-point of easing over the next two Fed meetings, Bloomberg reported.
Stocks in the region closed mixed. The Dow Jones Industrial Average and Nasdaq Composite climbed 0.37% and 0.04%, respectively, while the S&P 500 slipped 0.02%.
On the commodity front, crude oil prices were poised for increased volatility as tension escalated in West Asis with Israel killing Hamas leader Yahya Sinwar—the mastermind of last year’s Oct. 7 assault—in southern Gaza.
Brent crude was trading 0.23% higher at $74.62 a barrel as of 6:00 a.m. IST. West Texas Intermediate was up 0.25% at $70.85 a barrel.
Key Levels
US Dollar Index at 103.77
US 10-year bond yield at 4.09%.
Brent crude up 0.23% at $74.62 per barrel.
Bitcoin was up 0.46% at $67,239.81
Gold spot was up 0.06% at $2,694.36
Money Market
The Indian rupee closed weaker on Thursday, after holding above the 84 mark as foreign investors continued to offload domestic stocks.
The rupee depreciated by seven paise to close at 84.07 against the greenback, according to Bloomberg. The local currency had closed at 83.99 on Wednesday.
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