Trade Setup For Sept. 9: Nifty Faces Key Support At 24,735 Amid Negative Global Cues

As markets gear up for Monday’s session, traders are keeping a close watch on key support and resistance levels after Friday's sharp sell-off. 

The Nifty closed the week on a negative note at 24,852, breaking the crucial 25,000-25,100 support zone, with global uncertainty weighing heavily on market sentiment, according to analysts. 

After four weeks of gains, the Indian markets finally faced selling pressure, said Hashim Yacoobali, Director of South Gujarat Shares and Sharebrokers. He pegged 24,804-24,735 as a major support zone, warning that a sell-off may deepen if this zone breaks. On the upside, resistance at 25,160-25,296 could see short-covering if breached.

"The index has formed a bearish engulfing candle on the weekly scale, and the next major support is near 24,480," said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd.

While selling pressure dominated early in Friday's session, resilience emerged near the 24,850 support, said Ameya Ranadive, CMT CFTe at StoxBox. “The index now holds immediate support in the 24,850-24,750 zone, and it will be crucial for Nifty to stay above 24,500 to attract bullish momentum,” he said.

Concerns over the U.S. labor market as a key factor behind the recent market slump, according to Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services Ltd.

“The drop was triggered by disappointing U.S. job data, raising investor caution ahead of the Nonfarm Payroll and Unemployment Rate figures,” Khemka said, adding that sectors like consumer discretionary, retail, and hospitality could remain in focus with the festive season approaching.

The GIFT Nifty, an early indicator of the Nifty 50’s performance in India, was up 37 points, or 0.15% at 24,811 as of 6:38 a.m.

Nifty September futures fell by 1.3% to 24,906 at a premium of 47.85 points, while open interest fell by 4.11%.

Nifty Bank September futures rose by 0.2% to 50,781.40 at a premium of 204.55 points, while open interest grew by 6.24%.

The open interest distribution for the Nifty 50 Sept. 12 expiry series indicated most activity at 26,000 call strikes, with 22,350 put strikes having maximum open interest.

For the Bank Nifty options expiry on Sept. 11, the maximum call open interest was at 53,000 and the maximum put open interest was at 46,000.

Overseas investors stayed net sellers of Indian equities on Friday for the second consecutive day.

Foreign portfolio investors offloaded stocks worth Rs 688.7 crore and domestic institutional investors stayed net buyers for the fifth consecutive session and purchased equities worth Rs 2,121.5 crore, the NSE data showed.

India's benchmark indices extended losses on Friday, recording its worst week in over three months as fears griped over the health of the US economy ahead of the release of jobs data. The selloff was broad-based, with the banking and energy sectors taking the biggest hit.

The NSE Nifty 50 closed 292.95 points or 1.17% lower, at 24,852.15 to extend the fall to the third consecutive session. The S&P BSE Sensex closed 1,017.23 points or 1.24%, down at 81,183.93, its fourth day of decline. Both indices lost nearly Rs 4 lakh crore in value.

• Bajaj Housing Finance: The Bajaj Group is set to hit the primary after over three decades with an initial public offering of Bajaj Housing Finance. The housing financier, which plans to raise up to Rs 6,560 crore, will open for subscription on Monday.

• RBM Infracon: The company receives a service order worth Rs 3,498 crore from Oil and Natural Gas Corporation. 

• Mazagon Dock: The company received notification of the award of a contract worth Rs 1,486 crore from ONGC.

• Bajaj Finserv: Bajaj Allianz General Insurance reported a gross direct premium underwritten at Rs 1,736.23 crore for June. At the same time, the total new business premium for Bajaj Allianz Life Insurance stood at Rs 952.52 crore.

• SpiceJet: The airline has entered into a term sheet agreement with Carlyle Aviation Management Ltd. to restructure its aircraft lease obligations. The airline plans to restructure its finances by issuing securities worth $30 million at Rs 100 per share. Carlyle Aviation will also purchase convertible debentures for $20 million from SpiceXpress and Logistics Pvt. Ltd., a subsidiary of the company, it said.

• Nazara Technologies: The company has acquired a 48.42% stake in Paperboat for Rs 300 crore. The company has paid Rs 225 crore as the first tranche. The remaining balance will be paid in the manner outlined in the agreement.

• Suzlon Energy: The company has completed the acquisition of 51% of the equity share capital of Renom. With the said acquisition, Renom has now become a subsidiary of the company.

• AU Small Finance Bank: The bank announced a strategic partnership to offer AU SFB’s customers a wide range of general insurance solutions.

• Hindustan Unilever: The board has decided to constitute a committee of independent directors to evaluate in detail the prospects of the company’s ice cream business and to make recommendations to the board. The board also accorded its approval to explore potential structures and alternatives for the same.

• Swelect Energy Systems: The company approved an investment by their wholly-owned subsidiary in Singapore to set up solar roof top plants under the energy sales model by joining as a 50:50 partner in a new joint venture.

• Wardwizard Innovations & Mobility: The company plans to set up two plants to assemble electric motorbikes, three-wheelers, four-wheelers, buses, and EV cells in Saudi Arabia.

• Deep Industries: The company received an order worth Rs 1,402 crore from Oil and Natural Gas Corp. for a project in Andhra Pradesh's Rajahmundry.

The Indian rupee closed stronger against the US dollar on Friday after nearly touching the psychologically key level of Rs 84 in the previous session. The domestic currency strengthened amid a marginal decline in the dollar index.

The rupee appreciated 3 paise to close at Rs 83.95 after opening at Rs 83.96 against the US dollar, according to Bloomberg data. The domestic currency had closed at Rs 83.98 on Thursday.

Stocks in the Asia-Pacific region plunged in early trade as the risk-off mood intensified on concerns that the Federal Reserve may have waited too long to cut interest rates.

The Japanese benchmark plummeted over 3% while South Korea slipped over 2% in early trade. Futures contracts in China pointed to a steep decline. The Nikkei 225 was 2.8% lower at 35,402, and the Kospi was down 1.06% at 2,517 as of 6:09 a.m.

The risk-off sentiment deepened as the data that came in last week pointed that US jobs rose at a less-than-expected pace. This adds on the the pressures that the Federal Reserve faces on the size of the September rate cuts.

The non-farm payrolls rose in August by 1.42 lakh last month against the expected 1.65 lakh, leaving the three-month average at the lowest since mid-2020. The unemployment rate declined to 4.2%, the first drop in five months.

The US employment data failed to cheer investors. Stocks in the US were sent sliding to record their worst week since March 2023. The S&P 500 and Dow Jones Industrial Average slipped 1.73% and 1.01%, respectively. The Nasdaq Composite rose 2.55%.

Brent crude was trading 1.06% higher at $71.81 a barrel as of 5:58 a.m. IST. Gold was down 0.02% at $2,496.96 an ounce.

• US Dollar Index at 101.17.

• US 10-year bond yield at 3.74%.

• Brent crude up 1.06% at $71.81 per barrel.

• Bitcoin was up 1.09% at $54,968.45.

• Gold was up 0.02% at $2,496.96 an ounce.