Closing Bell: Nifty around 19,400, Sensex up 267 pts; all sectors in the green

Taking Stock: Nifty around 19,400; Sensex up 267 points; power, realty and metals shine

Top gainers on the Nifty were Bajaj Finance, Adani Ports, Power Grid Corp, Adani Enterprises and Hindalco Industries, while losers included Reliance Industries, M&M, Britannia Industries, SBI Life Insurance and BPCL... Read More

Market snapped its 2-day losing streak as the risk sentiment improved despite persistent Chinese economic concerns and hawkish Fed backdrop. Technically, Nifty could extend major recovery once it clears the 19537 mark. On the downside, bears will become active if Nifty slips below the 19251 mark.

Nifty ended higher on August 21 aided by buying across Metals, Power and IT stocks. At close, Nifty was up 0.43% or 83.5 points at 19393.6. Volumes on the NSE fell sharply compared to the recent average. Broad market indices rose more than the Nifty even as the advance decline ratio rose to 1.51:1.

Asian stocks stumbled on Monday after China delivered a smaller cut to lending rates than markets had counted on, continuing Beijing's run of disappointingly frugal stimulus steps.

European stocks rebounded from a one-month low as higher energy prices buoyed oil producers.

Nifty bounced up as expected post the doji formed in the previous session. 19483 is the resistance for the Nifty in the near term while 19253-19310 band could provide support.

Nifty opened with a gap up and continued to move up steadily throughout the day to close at 19,394, up 83 points.

The Foreign Portfolio Investors (FPIs) were seen covering their short positions on last Friday, (18th August) because of which the FPIs’ Long-Short Ratio moved up from 39.46% on 17th August to 42.04%

The Index has formed a morning star candlestick pattern on the daily chart. This bullish reversal pattern formation around the 50-Day Exponential Moving Average (DEMA) of 19,270 and the 50% Fibonacci retracement of 19,323 drawn from the low of 18,647 made on 26th June to the high of 19,992 made on 20th July can give a ray of hope to bulls in the coming days. The level of 19,300 on the downside will act as a strong support for Nifty while a close above today’s high of 19,426 can lead to initiation of fresh longs.

Bank Nifty broke the key resistance level of 43,950 on Intraday basis and closed at 44,002, up 151 points. Short covering was observed at 43,800 and 43,900 Strikes, which led to a strong up move in the index today. Bank Nifty has been consolidating in the 43,700-44,100 in the last five trading sessions. A decisive breakout on either side of the range can provide cues about Bank Nifty’s future direction.

Positive European market cues triggered a relief rally in domestic benchmark indices as investors resorted to short covering after taking a hit last week on the back of sharp FII selling and weak global cues. However, the market may continue to stay wobbly due to weak macroeconomic scenarios and volatility in global currency markets due to uptick in US bond yields. Technically, after a muted opening, the Nifty took support near the 50 day SMA (Simple Moving Average) or 19320 and reversed the trend thereafter. On daily charts, the index has formed a bullish candle and on intraday charts, and has also formed a double bottom formation. As long as the index is holding the 19320 level, the bullish sentiment is likely to continue. Above which, the index could rally till 19475-19500. On the flip side, below 19320, the uptrend would be vulnerable and could slip till 19250-19225.

Nifty remained turbulent all day after today's flat beginning, but it eventually stabilised and ended the day in the green. Investors and traders can keep their long bets open until the Nifty closes below 19300 because the markets are following the levels.

The market has traded positive with the Sensex gaining 0.41 percent and closed at 65216.09 and Nifty was up by 0.43 percent intraday and closed at 19393.60 levels whereas Bank Nifty was up by 0.34 percent and settled at 44002.00.

Among sectors Nifty pharma, Nifty IT and Nifty metal ended in green while Nifty PSU BANK, Nifty media and Nifty Oil & Gas ended on the lower side. In Nifty stocks, Bajaj Finance, Adani Ports and Adani Enterprise were the top gainers while Reliance, M&M and Britannia were the prime laggards.

India VIX was negative by 1.48 percent intraday and settled at 11.96.

Volume profile indicates Index has a strong support around 19250-19300 zone. Coming to the OI Data, on the call side, the highest OI observed at 19500 followed by 19600 strike prices while on the put side, the highest OI is at 19300 strike price. On the other hand, Bank Nifty has support at 43450-43600 while resistance is placed at 44600-44800 levels which are also close to 50 and 20 Day EMA levels respectively.

Markets started the week with an uptick and gained nearly half a percent. After the initial choppiness, Nifty maintained a positive tone for most of the session however profit taking in the end trimmed some gains. Eventually, it settled at 19383.60 levels; up by 0.43%. Meanwhile, the tone was mixed on the sectoral front wherein the metal and IT posted decent gains while auto and banking traded dull. The broader indices also participated in the move as both midcap and smallcap rose in the range of 0.6%-0.9%.

Participants shouldn’t read much into intermediate rebound or a pause until Nifty decisively reclaims 19650 levels or forms a reversal pattern. And, we recommend continuing with stock-specific trading approach and maintaining a focus on risk management.

The Nifty witnessed yet another range-bound day of trade. It snapped the two-day losing streak and closed in the positive up ~83 points. On the daily charts, we can observe that the Nifty has been hovering around the 40-day moving average (19360) for the past five trading sessions. Considering that the Nifty has been falling for the last four weeks a pullback is likely.

On the hourly charts, we can observe positive divergence indicating that momentum is weakening on the downside. However, we shall await further confirmations on the price front to change our short-term outlook. Until the Nifty trades below 19480 – 19500, we can expect the weakness to continue, and we shall continue to maintain our negative outlook on the index. On the downside, we expect the Nifty to target levels of 19100. Crucial support is placed at 19280 – 19240 while immediate hurdle is placed at 19480 – 19500.

Bank Nifty has also witnessed a pullback and snapped the seven-day losing streak. It has closed in the green and more importantly, holding on to the support of the 20-week moving average (44000) which indicates that a pullback is likely in the short term. The pullback can last till the 44400 – 44500 zone

A rebound in the global market after a significant correction prompted buying in domestic equities, particularly within the IT sector. However, the potential for volatility to linger in the near term remains due to the increasing dollar index and elevated US bond yields, fuelled by concerns about rate hikes. Investors are keenly observing the commentary from the Fed chair during its forthcoming summer conference for interest rate insights. Meanwhile, Asian markets displayed a mixed performance, reacting to the smaller-than-anticipated rate cut initiated by the Chinese central bank.

Indian equities started the week on a steady note at 19,350 and in the presence of a strong follow-through, Nifty50 kept compounding its gains throughout the day to end the session at 19,393.60 with gains of 83.45 points. Among the sectors, Metal and IT were the outperformers by ending the day with gains of over 1% while PSU Banks and Media were the laggards.

On the daily chart, Nifty50 has made a Morning Star DOJI candlestick which is a bullish trend reversal pattern. The area of 19,260-19,320 will continue to act as a crucial support zone while on the higher side, the Index needs to breach the immediate hurdle of 19,470 for continuing its uptrend.

Indian rupee ended flat at 83.11 per dollar against Friday's close of 83.10.

The resilience of the US economy and tightness of the labour market have come as a surprise. The main reason for this strength of the economy is the $5 trillion of fiscal stimulus provided by the US Govt during Covid lockdown. The fiscal stimulus didn’t result in spending since there were no avenues for spending during the lockdown.

It is possible that monetary tightening might slow down after a lag. Inflation is down to around 3% and slowdown can cause further decline in inflation, allowing the Fed to cut rates by 2nd quarter of 2024.

The present high yield on US bonds is a headwind for equity markets. But high yields are unlikely to last long.

Benchmark indices ended on a positive note on August 21 supported by buying across the sectors.

At close, the Sensex was up 267.43 points or 0.41 percent at 65,216.09, and the Nifty was up 83.40 points or 0.43 percent at 19,393.60. About 2060 shares advanced, 1558 shares declined, and 167 shares unchanged.

Top gainers on the Nifty were Bajaj Finance, Adani Ports, Power Grid Corp, Adani Enterprises and Hindalco Industries, while losers included Reliance Industries, M&M, Britannia Industries, SBI Life Insurance and BPCL.

All the sectoral indices are trading in the green with Information Technology, realty, metal, power and capital goods up 1-2 percent.

The BSE midcap and smallcap indices added nearly a percent each.