Trade Setup For July 9: Investors Await Q1 Earnings As Nifty Faces Key Resistance Levels

Indian equities started the week subdued as investors awaited first-quarter earnings for market direction. The Nifty closed three points lower and the Sensex dropped 36 points amid lacklustre trading.

The FMCG sector outperformed by rallying 1.5%, while the PSU Bank index fell by 1.5%. Gains in ITC Ltd. and Reliance Industries Ltd. countered losses in HDFC Bank Ltd. and Titan Co., keeping indices muted.

For the bulls now, 24,360/80,100 would be the key resistance level. Post 24,360/80,100, the index could move up 24,450–24,500/80,400–80,600. "On the flip side, dismissal of 24,240/79,730 may accelerate selling pressure. Below which, the market could retest the level of 24,160-24,120/79,500-79,200," said Shrikant Chouhan, head of equity research at Kotak Securities Ltd.

"However, India remains an attractive investment destination amid a healthy economic and earnings growth momentum, and the FPIs cannot afford to ignore the markets for too long," according to Avdhut Bagkar, technical and derivatives analyst at StoxBox. He attributed the continued market optimism to IT services finding flavour ahead of the upcoming Q1 FY25 earnings season.

The Bank Nifty's stability is compromised by HDFC Bank's impact, with the potential for deeper declines, if crucial support at 52,000 breaks, said Hemen Kapadia, senior vice president of institutional equity at KR Choksey Stocks & Securities. He highlighted HDFC Bank Ltd.'s pivotal role in disrupting the technical outlook, advising caution as the indices are currently in uncertain territory.

The GIFT Nifty was trading 3 points, or 0.01%, higher at 24,383 as of 06:32 a.m.

The Nifty July futures are up 0.02% to 24,375.6 at a premium of 55.05 points, with open interest up by 0.48%.

Nifty Bank July futures are down by 0.28% to 52,560 at a premium of 135 points, while its open interest is down by 0.81%.

The open interest distribution for the Nifty 50 July 11 expiry series indicated most activity at 25,000 call strikes, with 23,000 put strikes having maximum open interest.

For the Bank Nifty options July 10 expiry, the maximum call open interest was at 55,000 and the maximum put open interest was at 50,000.

Overseas investors remained net buyers of Indian equities for the fourth consecutive day on Monday.

Foreign portfolio investors mopped up stocks worth Rs 61 crore, while domestic institutional investors turned net buyers after three days of selling and mopped up equities worth Rs 2,866.8 crore, the NSE data showed.

India's benchmark stock indices closed little changed on the first day of the week due to a lack of any major triggers, even as market participants await first-quarter earnings to give direction. Gains in the shares of ITC Ltd. and Reliance Industries Ltd. offset the fall in HDFC Bank and Titan Co., keeping the indices subdued.

Both the Nifty and Sensex ended little changed at 24,320.55 and 79,960.38, respectively. Intraday, both fell around 0.3%.

Broader indices underperformed their major peers, with the S&P BSE Midcap ending with 0.14% losses and the S&P BSE Smallcap closing 0.22% lower on Monday.

Thirteen out of the 20 sectoral indices on the BSE ended lower. S&P BSE FMCG was the top gainer.

• Godrej Consumer: The company expects double-digit volume growth and high-single digit growth in value terms across home care and personal care segments in the quarter-ended June, according to provisional business updates released on Monday.

• Container Corp: In the first quarter business update, company reported a total throughput of 11.59 lakh TEUs, marking a 6% year-on-year increase, according to provisional business updates released on Monday.

• Bajaj Finserv: The company's subsidiaries, Bajaj Alliance General Insurance gross direct premium underwritten at Rs 1,234 crore for June and Bajaj Allianz Life total new business premium at Rs 1,082 crore for June.

• Dixon Technologies: The company to divest its entire 50% stake in the joint venture company AIL Dixon Tech to Aditya Infotech. As part of the transaction, Dixon Technologies will acquire 6.5% stake in Aditya Infotech in exchange for the divestment.

• Jupiter Wagons: The company opened QIP sets floor price at Rs 689.47 per share.

• Pitti Engineering: The company opened QIP for raising up to Rs 360 crore and set floor price as Rs 1,054.25 per share.

Stocks in the Asia-Pacific region inched higher in early trade on Tuesday tracking overnight gains from their Wall Street peers. Investors also await fresh catalysts from the semi-annual testimony of Federal Reserve Chair Jerome Powell to the Senate Banking Committee during the day.

Equity benchmarks in Japan rose the most, followed by stocks in Australia, and South Korea that were up in trade. The S&P ASX 200 was 49 points or 0.63% higher at 7,812 while the Kospi was 7.7 points or 0.25% up at 2,865 as of 06:27 a.m.

Meanwhile, the stocks in the US climbed and closed at a fresh high on Monday ahead of Powell’s testimony and the start of the earnings season. The S&P 500 Index and Nasdaq Composite advanced 0.10% and 0.28%, respectively as of Monday. Dow Jones Industrial Average slipped 0.08%.

Brent crude was trading 0.05% lower at $85.71 a barrel. Gold was 0.12% up at $2,361.94 an ounce.

• U.S. Dollar Index at 104.95

• U.S. 10-year bond yield at 4.28%

• Brent crude down 0.05% at $85.71 per barrel

• Bitcoin was up 0.41% at $56,489.56

• Gold spot was up 0.12% at $2,361.94

The Indian rupee pared gains to close little change, as concerns that tropical storm Beryl might disrupt oil supplies in the US continued to weigh on sentiment.

The local currency closed little changed at Rs 83.50 against the greenback after opening at Rs 83.45 on Monday. It had closed at Rs 83.49 on Friday.