Trade Setup For Oct. 1: Nifty 50 Sees Next Support At 25,500 Amid Market's Bearish Turn

The next support level for NSE Nifty 50, which witnessed a sharp selloff on Monday, will be at the 25,500 level, according to analysts. They also expect 26,000 to be an immediate hurdle for the index.

Sentiment on the Nifty 50 has shifted towards the bearish side after a gap-down opening. The index has created a strong bearish candle on the daily chart, indicating further weakness in the markets from the current levels, said Aditya Gaggar, director of Progressive Share Brokers Pvt.

He also pointed out that Nifty broke the psychological support of 26,000 and "kept on violating its small support points" to end the session at 25,810.85.

According to Shrikant Chouhan, head of equity research at Kotak Securities, "The current market texture is weak and volatile for the traders now. As long as it is trading below 26,000, the weak sentiment is likely to continue."

He also added that if the market falls below 26,000, then it could slip to 25,700–25,600. On the flip side, if it is above 25,850, it would see a bull rally till 25,900-25,935.

Looking at the current market trend, Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C. Mehta Investment Intermediates Ltd., suggests a "short-term" sell-on-rise approach.

Bank Nifty also saw a negative open and remained under pressure through the day. Analysts believe that with the index forming a bearish candle, it will see weakness in the next trading session.

Yedve sees 52,720 as the next support level for Bank Nifty, with any bounce towards 53,300–53,350 to be seen as an opportunity for profit booking.

The GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India, was up 5 or 0.02% at 25,980.5 as of 06:31 a.m.

The Nifty October futures were down 1,35% to 25,990 at a premium of 180 points, with the open interest down by 8.5%.

The Nifty Bank October futures were down by 1.47% to 53,435 at a premium of 457 points, while its open interest was down by 3%.

The open interest distribution for the Nifty 50 Oct. 3 expiry series indicated most activity at 26,000 call strikes, with 23,050 put strikes having maximum open interest.

For the Bank Nifty options expiry on Oct. 1, the maximum call open interest was at 54,000 and the maximum put open interest was at 43,000.

Overseas investors remained sellers of Indian equities on Monday. Foreign portfolio investors offloaded stocks worth Rs 9,791.9 crore, according to provisional data from the National Stock Exchange.

Domestic institutional investors stayed net buyers for the sixth day and purchased equities worth Rs 6,645.8 crore, the NSE data showed.

India's benchmark stock indices experienced their worst day in almost two months on Monday, driven by significant declines in major players like Reliance Industries Ltd. and ICICI Bank Ltd., amid rising geopolitical tensions in the Middle East.

The NSE Nifty 50 ended 368.10 points or 1.41% lower at 25,810.85, and the S&P BSE Sensex settled 1,272.07 points or 1.49% down at 84,299.78.

• Automobile Stocks: Automobile stocks such as Tata Motors Ltd., Eicher Motors Ltd. and Bajaj Auto Ltd. will be in focus as automobile companies will be announcing their production and sales data for the month of September on Tuesday.

• NTPC: The state-run power giant's subsidiary, NTPC Green Energy, signed a MoU with the Rajasthan government for the development of 25GW of renewable energy projects. The company signed the MoU at the Rising Rajasthan Investor Meet at New Delhi.

• Kalpataru Projects International: The infrastructure major received orders worth Rs 1,241 crore from India and the overseas market. This includes orders in the transmission and distribution business and orders related to residential commercial building projects in India. The fresh order wins have taken Kalpataru Projects year-to-date order inflows to over Rs 11,000 crore.

Stocks in Japan regained some ground after a steep decline on Monday as Shigeru Ishiba’s victory in the party’s leadership race spooked panic on the rate hike front. Meanwhile, the US Federal Reserve Chair emphasised no urgency for further interest-rate cuts.

The Japanese benchmark—Nikkei 225—was 1.2% up at 38,367. Australia's S&P ASX 200 was down 0.3% at 8,239 as of 5:41 a.m.

The rebound in Japan's stocks comes a day after the benchmark tumbled almost 5% following the party’s leadership race. Ishiba favoured rate hikes and supported policies for the Central Bank's independence and the country's deflation target, Bloomberg News reported.

Overnight, US Fed's Powell said it will lower rates “over time”, towards a more neutral stance and affirmed that the economy remains on solid footing. Policy is not on a preset course and will do what it needs for a soft landing, he said.

Treasury yields dropped soon after Powell's speech while the dollar jumped against the yen.

Meanwhile, inflation prints for Pakistan and Indonesia will be on traders' watchlists for the session. South Korea will report export growth for September.

The US stocks logged their fourth consecutive quarter of gains but pared gains on Monday at the last trading minute. S&P 500 and Nasdaq Composite climbed 0.42% and 0.38%, respectively. The Dow Jones Industrial Average advanced by 0.04%.

• US Dollar Index at 100.80.

• US 10-year bond yield at 3.77%.

• Brent crude down 0.29% at $71.77 per barrel.

• Bitcoin was 0.59% down at $63,409.98.

• Gold spot was down 0.09% at $2,656.9.

The Indian rupee closed weaker on Monday, pressured by a rise in the dollar index and Brent crude oil prices.

The currency depreciated 10 paise to close at Rs 83.80 against the US dollar after opening at Rs 83.72. It had closed at Rs 83.70 on Friday, according to Bloomberg.