Closing Bell: Nifty around 19,450, Sensex up 213 pts led by bank, metal, capital goods

Taking Stock: Sensex gains 213 pts, Nifty around 19,450; banks rally, power drags

Mixed trends seen on the sectoral front, with bank, metal, capital goods and realty up 0.4-1 percent each, while power, FMCG, and oil & gas down 0.3-1 percent.... Read More

Markets traded volatile and ended marginally in the green, in the absence of any major trigger. The beginning was subdued but recovery in the middle helped the Nifty to retest hurdle at 20 EMA around 19,470. But, it couldn’t surpass that resistance and eventually closed at 19,444; up by 0.25%. On the sectoral front, a strong rebound in the banking and financial majors kept the tone positive while the majority traded flat to negative. Meanwhile, the broader indices extended their prevailing tone and edged higher.

Interestingly, both Nifty and the banking index, have reached their immediate hurdle of short term moving average i.e. 20 EMA together. Their alignment and a decisive breakout above the hurdle would help in extending the recovery else the tone may again turn dull. Amid all, we reiterate our view on maintaining focus on stock selection.

Nifty overcame early volatility to end higher for the third session on August 23. At close, Nifty was up 0.25% or 47.6 points at 19444. Volumes on the NSE was higher than the previous two days. Broad market indices rose more than the Nifty even as the advance decline ratio remained firm at 1.47:1.

Global markets were trading mixed Wednesday ahead of Federal Reserve Chair Jerome Powell's highly anticipated speech later in the week at Jackson Hole. Investors also awaited results from tech darling Nvidia later to see if the sector's lofty valuations still look justified. Survey data showed German and euro area business activity slumped in August.

Nifty formed a high wave type candle and made a higher high compared to the previous session. It could now stay in the 19320-19483 band for the near term and a breach on the upside could take the Nifty to 19558.

After wobbling in the morning session, markets turned upwards and ended higher in line with the trend in other global indices. Cautious optimism was the preferred theme as Nifty held steady amidst improving market mood in global stock markets. Technically, Nifty could see extended recovery only it clears the 19537 mark. On the downside, bears will become active only if Nifty slips below the 19251 mark.

One 97 Communications shares rallied 5.5 percent to Rs 904.75, the highest closing level since February 11 last year, on the NSE, continuing uptrend for second consecutive session.

The stock almost filled up the gap created with the sharp fall on February 14 last year, and formed strong bullish candlestick pattern on the daily charts with healthy volumes. Also, it surpassed the high of June month, from where we have seen correction up to Rs 752 on July 28, which experts said can be a critical support levels for the stock going ahead. Since then, the stock continued its gradual upmove along with intermittent correction and consolidation till today.

Today, the stock has seen a breakout after several weeks of consolidation. Also, there was a breakout of downward sloping resistance trendline adjoining highs of June 19 and August 17.

Further, the stock traded above all key moving averages (20, 50, 100 and 100-day exponential moving averages), which is a positive sign.

The Nifty opened on a positive note and witnessed a volatile day of trade today. It closed in the green up ~48 points. On the daily charts, we can observe that the Nifty is trading exactly around the falling resistance trend line. Considering the number of touchpoints on this trend line increases the importance of this trend line and should be closely watched out for. On the upside, there is multiple resistance in the form of the 20-day moving average (19,529) which shall restrict the up move. The daily momentum indicator has a negative crossover, and this rise could fizzle out. Overall, we shall continue to maintain our negative outlook on the index though a pullback is likely over the next few trading sessions. Crucial support is placed at 19,370 – 19,350 while Immediate hurdle is placed at 19,520 – 19,550.

Bank Nifty has witnessed a sharp pullback. On account of the rise it is now very close to the 44,600 – 44,700 where resistance in the form of the 20 and 40-day moving averages are placed which are likely to restrict a further sharp up-move. Bank Nifty is in a pullback mode which is also supported by the positive crossover on the daily momentum indicator.

While market undertone remains cautious, investors are cherry picking stocks that were beaten down in recent sessions or have the potential to gain further in the medium term because of sound business fundamentals. In an extremely volatile session, buying in banking, power and metal stocks fuelled a recovery in markets, while concerns over dismal global macroeconomy and fluctuation in US bond markets have made investors adopt a risk averse stance.

Technically, the Nifty took support near 19350 and recouped lost ground thereafter. However, it failed to breach the key resistance level of 19500. Currently, the index is witnessing a positive consolidation.

For day traders, 19400 would act as a trend decider level and above which, the index could rally till 19535. On the flip side, below 19400 the index could retest the level of 19350-19315.

The Bank Nifty index exhibited a powerful bullish resurgence, effectively overpowering the bearish sentiment. Notably, buying activity was observed in both private and public sector banks, showcasing strong confidence. The critical resistance at 44200 was convincingly breached, supported by substantial trading volumes, leading to an extension of the upward movement towards 44500.

The overall market sentiment remains bullish, with the index poised for further gains. As long as the index sustains above the level of 44200, the trajectory is likely to continue upwards, potentially targeting the 45000 level. On the downside, a crucial support is situated at 44000, where significant put writing was evident on both the weekly and monthly expiries. This support level could act as a buffer against downward movements.

Global markets have restrained from making significant moves as they await the outcome of the central bankers' gathering at Jackson Hole scheduled for Friday. With the earnings season nearing its end, the heightened possibility of another rate hike in the US, along with the resultant increase in bond yields, are expected to keep the global market’s volatility high. On the domestic front, sentiments remained positive, backed by strong demand in the banking sector, though IT and pharma limited the gains.

D-street started the day on a positive note by following its global counterparts and in the opening trade itself, the index retested its strong support of 19,370 followed by a firm follow-up buying; however, in the last hour of trade, the index pared off some of its gains to settle at 19,444.00 with gains of 47.55 points.
The index rally was mainly driven by financial stocks, especially banking while FMCG and Energy segments witnessed a round of correction. Mid and Smallcap indices extended their streak of outperformance by settling with gains of 0.39% and 0.91% respectively.

On the daily time-frame, Nifty50 has made a DOJI candlestick pattern at the higher end of the congestion which indicates a reversal to retest its support zone.

The Nifty continues to trade within the broader range of 19,300 and 19,500. On the daily timeframe, the headline Nifty index has been fluctuating between the boundaries set by the 21-day Exponential Moving Average (EMA) at 19,471 and the 50-day EMA at 19,281.

Looking ahead, the Nifty is likely to maintain this range bound movement as long as it remains within these established thresholds. A significant breakthrough above the 19,500 mark could potentially trigger a rally towards higher levels.

Indian rupee ended 25 paise higher at 82.68 per dollar versus Tuesday's close of 82.93.

: Benchmark indices ended higher on August 23 with Nifty around 19,450 led by metal, bank, capital goods and realty stocks.

At close, the Sensex was up 213.27 points or 0.33 percent at 65,433.30, and the Nifty was up 47.50 points or 0.24 percent at 19,444. About 2016 shares advanced, 1487 shares declined, and 156 shares unchanged.

Hindalco Industries, Axis Bank, ICICI Bank, SBI and L&T were among the top gainers on the Nifty, while losers were Adani Enterprises, Adani Ports, Sun Pharma, Bharti Airtel and Tata Motors.

Mixed trends seen on the sectoral front, with bank, metal, capital goods and realty up 0.4-1 percent each, while power, FMCG, and oil & gas down 0.3-1 percent.

BSE midcap index rose 0.4 percent and smallcap index added 0.6 percent each.