Trade Setup For Sept. 26: Nifty Sees Support At 25,875 Amid Strong Buying Momentum
The Nifty 50 ended 63.75 points, or 0.25% higher at 26,004.15, and the Sensex ended up 255.83 points, or 0.30% at 85,169.87.
There is strong buying momentum in the market that is fuelled by strong liquidity, according to Vaibhav Porwal, co-founder at Dezerv. "In such a scenario market can overextend. Which means that we may see the 1,00,000 number shortly."
According to Shrikant Chouhan, head equity research at Kotak Securities, 25,875 will act as a sacrosanct support level for Nifty 50, while 84,750 will act as an important support level for Sensex 30.
Above the same, Shrikant Chouhan highlighted that the Nifty 50 could rally till 26,100-26,150 and the Sensex 30 could surge till 85,500-85,700. "On the other side, below 25,875/84,750 sentiment could change."
The Nifty has sustained above its very short-term moving average, according to Rupak De, senior technical analyst at LKP Securities.
Rupak De suggests that no reversal is visible in the momentum indicator. "We might witness a range-bound to positive move in the near term. Resistance on the higher end is seen at 26,200-26,250," he said.
Nifty 50 has virtually tested its immediate support of 25,850 and reversed to form a bullish candle on the daily chart, according to Aditya Gaggar, director of Progressive Share Brokers Pvt. "This suggests a trend continuation to rally till 26,200 while the support level is shifted higher to 25,950."
F&O Cues
The Nifty September futures were up 0.19% to 25,998 at a discount of 6 points, with the open interest down by 22.15%.
The Nifty Bank October futures were up by 0.06% to 54,335 at a premium of 234 points, while its open interest was down by 20%.
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 54,100 and the maximum put open interest was at 54,100.
FII/DII Activity
Overseas investors stayed net sellers of Indian equities on Wednesday for a second session.
Foreign portfolio investors offloaded stocks worth Rs 973.94 crore, domestic institutional investors stayed net buyers for a third session and purchased equities worth Rs 1,778.99 crore, the NSE data showed.
Market Recap
The NSE Nifty 50 and BSE Sensex recovered from the day's low in the last leg of the trade to end Wednesday at record close. HDFC Bank Ltd. and Axis Bank Ltd. added to the gains. This is the fourth consecutive session that India's benchmarks recorded fresh highs.
The Nifty 50 ended 63.75 points, or 0.25% higher at 26,004.15, and the Sensex ended up 255.83 points, or 0.30% at 85,169.87.
Major Stocks In News
Pharma Companies: India's apex drug regulatory body, the Central Drugs Standard Control Organisation, has flagged 53 drug samples for failing to meet quality standards. Major pharmaceutical companies including Sun Pharma Laboratories Ltd., Glenmark Pharmaceuticals Ltd., and Alkem Health Science Ltd. are implicated in this quality lapse, according to the CDSCO’s August report.
Five-Star Business Finance: Holders of the company are looking to offload a 19.2% stake comprising 5.6 crore shares worth Rs 4,317 crore via a block deal at Rs 768 apiece. The deal has a lock-up period of 12 months for selling shareholders.
ASK Automotive: The promoter is likely to sell up to a 6.05% stake via OFS, which will have a base offer of 5.5% and an oversubscription option of 0.5% at a floor price of offer set at Rs 433 per share. The offer will be open on Sept. 26-27.
Oil and Natural Gas Corp: The board approved Rs 10,501 crore investment in ONGC Petro additions.
IDFC: NCLT approved the merger of IDFC financial holding with IDFC and the resulting entity's merger into IDFC First Bank.
Vedanta: The board is to consider the fourth interim dividend on Oct. 8.
Hindustan Copper: The company approved the sale of the Malanjkhand copper ore tailing plant in Madhya Pradesh.
Cipla: The company's UK-based arm has signed a pact to acquire a 6.9% stake held by Jiangsu Xidi Pharma in a China-based unit. Post acquisition Jiangsu to become a wholly owned step-down subsidiary of the company.
Zen Technologies: The company launched remote-controlled weapon and surveillance systems to strengthen India’s Defense Capabilities.
UNO Minda: The company arm is in a pact with Korea-based Hyundai Mobis to manufacture licensed products like speakers.
Infosys: The company to establish Tech Hub for Sweden-based Polestar in Bengaluru.
Adani Green Energy: Hibiscus Trade & Investment acquired a 1.27% stake in the company. Ardour Investment acquired a 1.69% stake in the company. Both acquirers belong to the promoter group.
SpiceJet: Carlyle Aviation sells a 1.42% stake via the open market deals in this month.
JBM Auto: The company incorporated the unit JBM Electric Vehicles in Singapore to carry on the business in the automotive sector for Electric Vehicles Internationally.
Coromandel International: The company increased its stake in Senegal-based rock phosphate miner BMCC by 8.8%.
Baazar Style Retail: The company has opened a new store in West Bengal today.
PB Fintech: The company clarified that it has not made a decision yet on entering healthcare space.
Global Cues
Stocks in the Asia-Pacific region extended their rally on Thursday as traders still digested the China stimulus package while eyeing the US GDP data the following day.
The equity benchmarks in Japan and South Korea were trading higher by over 1%. The Kospi was up 1.76% at 2,630, while the Japanese Nikkei was up 1.54% at 38,494 as of 6:15 a.m. Future contracts in the US pointed to a higher start with the tech-heavy Nasdaq rising up to 0.55%.
The yen was steady after falling more than 1% against the dollar on Wednesday after Bank of Japan said it is in no rush to further increase interest rates.
Meanwhile, all eyes will be on the US GDP print to ascertain if the Federal Reserve was late in slashing its lending rates. Investors will look forward to a speech by Fed Chair Jerome Powell and price data later this week.
Elsewhere, data release for the day includes industrial production in Singapore, machine tool orders in Japan and Hong Kong trade data.
The S&P 500 and The Dow Jones Industrial Average slipped 0.19% and 0.70%, respectively. The Nasdaq Composite advanced by 0.04%.
Oil steadied after dropping the most in two weeks. Brent crude was trading 0.08% higher at $73.52 a barrel as of 6:03 a.m. IST. West Texas Intermediate was up 0.04% at $69.72.
Key Levels
US Dollar Index at 100.90
US 10-year bond yield at 3.78%.
Brent crude down 0.08% at $73.52 per barrel.
Bitcoin was 0.65% down at $63,074.75
Gold spot was up 0.06% at $2,658.53
Money Market
The Indian rupee closed stronger against the US dollar on Wednesday on steady foreign inflows. Global investors poured in Rs 10,291 crore in the cash market over the past week, marking this September the best month in terms of inflows in the last six months.
The rupee appreciated by seven paise to close at 83.60 against the US dollar, according to Bloomberg data. The local currency had closed at 83.67 against the greenback on Tuesday.
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