Trade Setup For May 31: Nifty Can Fall Decisively After Breaking 22,400 Support Level

The volatility will remain on the higher side ahead of the Lok Sabha election results and the global environment provides weak cues for domestic markets, according to analysts.

Nervousness ahead of an exit poll on June 1 and weak global cues continue to dent sentiments. Global markets remained under pressure due to rising bond yields and denting hopes of a rate cut, according to Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd. "We expect market volatility to heighten as we approach the general election outcome."

The Nifty found support at the 50-double exponential moving average of 22,386 and had a pullback towards the finish, according to Neeraj Sharma, assistant vice president of technical and derivatives research at Asit C Mehta Investment Interrmediates Ltd.

Therefore, 22,400 will serve as an immediate support zone for the index, followed by 22,000, while 22,800 and 23,110 will operate as significant barriers in the short term, he said.

A decisive break of the 22,400 level could trigger a further drop to the 22,000–22,150 zone, Ajit Mishra, senior vice president of research at Religare Broking Ltd. "We suggest aligning trades accordingly and adopting a hedged approach."

The Bank Nifty has defended the support of the 21-DEMA at 48,403 and found resistance near 49,000–49,050 levels, Sharma said. "If the index sustains above 49,050, then the rally could stretch towards 49,690 and 50,000 levels.“

The GIFT Nifty was trading 16.50 points or 0.07% down at 22,693.5 as of 06:37 a.m.

The Nifty May futures were down by 0.89% to 22,627.35 at a premium of 138.7 points, with its open interest up by 48%. The Nifty Bank May futures were up by 0.24% to 49,037.4 at a premium of 355 points, while its open interest was up by 12.06%.

The open interest distribution for the Nifty June 6 series indicates that the 21,000 level is seeing the most put strikes, and call strikes of 24,000 have the maximum open interest.

For the Bank Nifty options' June 5 expiry, the maximum call open interest was at 53,000 and the maximum put open interest was at 40,000.

Overseas investors in Indian equities remained net sellers on Thursday for the second straight session.

Foreign portfolio investors offloaded stocks worth Rs 3,050.2 crore and domestic institutional investors stayed net buyers for eight straight sessions and mopped up equities worth Rs 3,432.9 crore, according to provisional data from the National Stock Exchange.

The benchmark equity indices fell for the fifth consecutive session on Thursday as heavyweights weighed on them. The NSE Nifty 50 closed 216.05 points or 0.95%, down at 22,488.65, while the S&P BSE Sensex ended 617.30 points or 0.83%, lower at 73,885.60.

Both the Nifty and the Sensex closed at their lowest levels in seven sessions. The last time the benchmarks fell for five consecutive days was in October, when geopolitical tensions in the Middle East were weighing on the markets.

During the day, the Nifty fell as much as 1.27% to 22,417 and the Sensex dropped 1.12% to Rs 73,668.73.

The broader markets underperformed the benchmarks as the BSE MidCap declined 1.21%, and the BSE SmallCap fell 1.33%.

On the BSE, 19 out of the 20 sectoral indices closed lower, with Metal being the top loser, and Bankex emerging as the top gainer.

• Sunteck Realty: The company approved raising up to Rs 2,250 crore through private placement and the issue of equity shares, post the approval of shareholders. The company is to raise Rs 1,500 crore through private placements in one or more tranches and Rs 750 crore by way of equity shares or other securities convertible into equity.

• Subex: The company’s arm won a contract worth $1.1 million from a telecom operator in Europe for fraud management on the HyperSense AI/ML platform.

• Jio Financial Services: The company unveils the JioFinance App in a beta version, marking a significant step forward in its digital transformation journey to enhance the financial well-being of every Indian.

• Apollo Hospitals Q4 FY24 Highlights (Consolidated, YoY)

  • Revenue up 14.9% to Rs 4,944 crore versus Rs 4,302 crore (Bloomberg estimate: Rs 4,945 crore).

  • Ebitda up 31.2% to Rs 641 crore versus Rs 488 crore (Bloomberg estimate: Rs 637 crore).

  • Ebitda margin at 13% versus 11.3% (Bloomberg estimate: 12.9%).

  • Net profit up 77.5% to Rs 258 crore versus Rs 146 crore (Bloomberg estimate: Rs 265 crore).

  • The board has recommended a final dividend of Rs 10 per share.

Stocks in the Asia Pacific region were trading higher on Friday on expectations of the Federal Reserve to start cutting interest rates this year after US economic data signaled slowing momentum.

The Nikkei 225 was 156 points or 0.41% up at 28,215, and the S&P ASX 200 was 51 points or 0.68% higher at ,7679, as of 06:37 a.m.

Traders in Wall Street sent US stocks down for the second consecutive session and bonds up after the latest round of economic data signalled momentum is slowing.

The S&P 500 Index and Nasdaq Composite fell 0.60% and 1.08%, respectively, as of Thursday. The Dow Jones Industrial Average fell 0.86%.

• US Dollar Index at 104.75

• US 10-year bond yield at 4.54%

• Brent crude down 0.16% at $81.73 per barrel

• Nymex crude down 0.24% at $77.72 per barrel 

• Bitcoin was down 0.21% at $68,324.31

The Indian rupee closed stronger against the US dollar tracking the slight decline in the dollar index.

The local currency strengthened 3 paise to close at Rs 83.32 against the US dollar. It had closed at Rs 83.35 against the US dollar on Wednesday.

The Indian rupee had a weak opening on Tuesday, tracking the overnight rise in the dollar index and US Treasury yields, only to turnaround and close the day stronger.