Trade Setup For Sept. 25: Nifty Sees Key Support At 25,800 Amid Positive Short-Term Outlook
The Nifty recorded its highest closing at 25,940.4, up 0.01%, or 1.35 points, and the S&P BSE Sensex ended down 0.02%, or 14.57 points, at 84,914.04.
The short-term market texture is still into the positive side, but due to temporary overbought environments, expect to see range bound activity in the near future, according to Shrikant Chouhan, head of equity research at Kotak Securities Ltd.
He believes that 25,850–25,800 will act as a key support zone for Nifty while 84,600–84,500 will become a key support zone for Sensex. The profit-booking area for Nifty is 26,050–26,100 while that for Sensex is 85,300–85,500 for the day traders, he added. “However, below 25,800/84,500 uptrend would be vulnerable.”
A strong move above 26,000 will open doors for 26,100 while on the lower side, the zone of 25,800–25,850 will serve as a strong support area, said Aditya Gaggar, director of Progressive Share Brokers Pvt.
The Nifty must decisively break above the 26,000 level for the rally to continue, according to Rupak De, senior technical analyst at LKP Securities Ltd.
"Until the Nifty breaks above the 26,000 level, we expect range-bound movement, with the index fluctuating between 25,800 and 26,000 over the next few hours to a few days," he said.
F&O Cues
The Nifty September futures were up 0.15% to 25,944 at a premium of 4 points, with the open interest down by 21.29%.
The Nifty Bank September futures were down by 0.09% to 54,026 at a premium of 58 points, while its open interest was down by 16%.
The open interest distribution for the Nifty 50 Sept. 26 expiry series indicated most activity at 27,000 call strikes, with 25,000 put strikes having maximum open interest.
For the Bank Nifty options expiry on Sept. 25, the maximum call open interest was at 56,000 and the maximum put open interest was at 53,000.
FII/DII Activity
Overseas investors turned net sellers of Indian equities on Tuesday after two sessions of buying.
Foreign portfolio investors offloaded stocks worth Rs 2,784.14 crore; domestic institutional investors stayed net buyers for the second session and purchased equities worth approximately Rs 3,868.31 crore.
Market Recap
Benchmark equity indices ended on a flat note after the NSE Nifty 50 hit the crucial 26,000-mark for the first time in the last hour of trade. Despite this, the index managed to record its highest close in the third consecutive session.
The Nifty recorded its highest closing at 25,940.4, up 0.01%, or 1.35 points and the S&P BSE Sensex ended down 0.02%, or 14.57 points, at 84,914.04.
Major Stocks In News
Multi Commodity Exchange of India: The company revised its transaction fees on futures and options contracts effective Oct. 1. Futures contracts to see transaction fee Rs 2.10 per lakh of turnover value and for options contracts Rs 41.80 per lakh of premium turnover value.
Tata Power: A fire incident occurred in the control room at the Trombay plant. No injuries or loss of life have been reported. The company is in the process of assessing the actual damage caused by the fire.
Delta Corp.: The company has approved the demerger and listing of hospitality and real estate businesses into Delta Penland. Shareholders will receive one share of Delta Penland for every share held in Delta Corp.
Hindustan Foods: The company has initiated the merger of soups, spices and seasoning manufacturing facilities in Nashik.
Mazagon Dock Shipbuilders: The company on Tuesday commenced the production activity for the first multipurpose cargo vessel for Navi Merchants, Denmark.
PC Jeweller: The board will consider stock split on Sept. 30.
Solar Industries India: The company received an NCLT nod for the merger of Rajasthan explosives with unit Emul tek pvt.
Hariom Pipe Industries: The company approved to raise up to Rs 700 crore via equity or other securities.
Zee Media Corp.: The company's board meets on Sept. 27 to consider fundraising.
KEC International: The company opens its QIP and sets the floor price at Rs 976.64 per share.
HDFC Life Insurance: The company has approved to raise Rs 2,000 crore through NCDs.
Adani Enterprises: The company's arm JV completed the acquisition of Parserlabs, Coredge.io.
Gillette India: P&G Bangladesh has terminated its distribution agreement, effective Dec. 31. As a result, the company expects a corresponding decrease in net sales, with the sales from this agreement representing 2% of total net sales.
Global Cues
Stocks in the Asia-Pacific region rose in early trade on Wednesday after Chinese authorities eased liquidity to boost economic growth. The gains were also fueled by Wall Street posting a new record on further rate cut hopes after a disappointing consumer confidence report.
The South Korean Kospi was up 0.83% at 2,653, while the Japanese Nikkei was up 0.21% at 38,092 as of 5:41 a.m. Equity futures hinted that Hong Kong gained 3.6% and China’s jumped 4.6%.
After reports of a deepening crisis, the People's Bank of China slashed banks' reserve requirement ratio and outstanding mortgage rates on Tuesday. The panel decided to cut the seven-day reverse repo rate to 1.5% from 1.7%.
Data points such as Australia’s August CPI print and China's one-year medium-term facility rate will be the key focus on Wednesday.
The US stocks hit fresh records with the S&P 500 index notching its 41st record close of the year, shrugging off the disappointing consumer data.
The consumer confidence in the US in September marked the biggest decline in three years on concern about the labour market.
The S&P 500 and the tech-heavy Nasdaq Composite advanced 0.25% and 0.56%, respectively. The Dow Jones Industrial Average rose by 0.20%.
Brent crude was trading 0.03% lower at $75.15 a barrel as of 5:54 a.m. IST. West Texas Intermediate was down 0.03% at $71.54.
Key Levels
US Dollar Index at 100.27
US 10-year bond yield at 3.73%.
Brent crude down 0.03% at $75.15 per barrel.
Bitcoin was 0.21% down at $64,091.34
Gold spot was up 0.04% at $2,658.12
Money Market
The Indian rupee weakened against the dollar amid a rising dollar index and an uptick in crude prices as tensions heightened in the Middle East amid attacks by Israel.
The rupee weakened by two paise to open at 83.57 against the US dollar, according to Bloomberg data. The local currency had closed at 83.55 against the greenback on Monday.
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