 "GIFT Nifty, FII flows, Q1 results: Factors to set market trend on July 31")
Stock market preview, Wednesday July 31, 2024: Indian equity indices are likely to start Wednesday’s trading session on a muted note amid mixed cues from global peers.
At 07:00 AM, GIFT Nifty futures quoted around 24,920 levels, hinting at a likely flat start to the trading action on the NSE Nifty 50 index today.
The Nifty, in the last two trading sessions, came within striking distance of the 25,000 milestone, but fell short. Experts believe that the bias shall remain positive as long as the index holds above 24,750 – 24,800 support range.
On the macro economic data – India’s infrastructure output for the month of June will be announced today.
Among individual stocks - Adani Power, Ambuja Cement, Bank of Baroda, BHEL, Coal India, Crompton Greaves, Deepak Fertilisers, Fino Payments Bank, Godrej Properties, JK Lakshmi Cement, Mahindra & Mahindra, Maruti, Nitin Fire Protection, Prestige Estates, RITES, Sonata Software, Sundaram Fasteners, Tata Steel and Zee Entertainment are likely to be in focus as these companies are scheduled to announce Q1 results today.
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Global mood
The US market ended on a mixed note on Tuesday amid the ongoing earnings season. Dow Jones gained 0.5 per cent, while the S&P 500 slipped 0.5 per cent and NASDAQ dipped 1.3 per cent. Tonight, US stocks are expected to react of Microsoft and the Fed policy meet outcome.
The US 10-year bond yield eased to 4.15 per cent. Among commodities, Gold futures rallied strongly to $2,450 levels, while WTI Crude Oil futures hovered around $75 per barrel.
Closer home in Asia, Nikkei and Taiwan fell over 0.5 per cent each this morning; while, Kospi and Straits Times gained 0.5 per cent and 0.2 per cent, respectively.
FII, DII trading activity
Foreign institutional investors (FIIs) were net sellers of shares worth Rs 5,598.64 crore in the cash market on July 30. Domestic institutional investors (DIIs), on the other hand, net bought stocks to the tune of Rs 5,565.10 crore on Wednesday.
In the derivatives segment, FIIs net bought 5,077 contracts of index futures for a consideration of Rs 385.50 crore on July 30. FIIs net bought 708 contracts of Nifty futures, 3,628 contracts of Bank Nifty futures, and 1,857 contracts of MidCap Nifty futures yesterday.
Pursuant to which, FIIs long-short ratio in index futures rose to almost 2:1. This ratio implies that foreign investors hold near about 2 long positions in index futures for every bet on the short side. The FIIs longs in index futures rose to 66.05 per cent.
Trading strategy for Wednesday, July 31 - Should you be a buyer or seller in the Nifty, Bank Nifty today? Here’s what market experts recommend:
Om Mehra, Technical Analyst, SAMCO Securities
The Nifty is likely to remain range-bound; however, if it fails to cross 24,970 in the next session, selling on the bounce could be a strategy for capturing the short-term moves.
The Bank Nifty has formed a shooting star pattern for the second consecutive day and remained below the 23.6 per cent Fibonacci retracement level of 51,650. The immediate support remains at 51,000 followed by 50,750 levels with resistance placed at 52,100. The daily RSI currently stands at 48, struggling to hold above the average line of 50.
Dhupesh Dhameja, Technical Analyst, SAMCO Securities
On the daily chart, the Nifty formed a doji candlestick near all-time highs, while the hourly chart showed a double top pattern with a neckline at 24,750. As long as the index stays above 24,750, there's hope for a renewed upward movement. To see further gains, the index needs to sustain above the strong resistance level of 25,000.
The Bank Nifty faced strong rejection at the psychological level of 52,000, followed by a significant pullback at key Moving Average, indicating selling pressure. The index is trading in a lower high-lower low pattern, with the 20-day EMA acting as strong resistance, suggesting a bearish grip.
The index has a last support level at 51,200 for regaining upward momentum; if it fails to sustain above this level, 50,800 could be the next target.
Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One
The narrow price range and the small-bodied candlestick pattern at higher levels indicate a potential lack of momentum and uncertainty among the buyers. Though the muted price action on a closing basis does not change much of the scenario, such lackluster moves certainly raise concerns regarding the inherent strength of the Nifty.
Technically, the 25,000 milestone withholds the daunting task for the bulls, and a sustainable breakthrough could only direct the next leg of the rally in the index. On the lower end, 24,600 is seen as intermediate support, followed by the sacrosanct demand at the 24,500 zone.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, the Nifty on a daily scale has formed a ‘doji’ like candle, indicating uncertainty. Immediate support for the index is placed near 24,770, followed by 24,600. On the upside, 25,000 will act as a key hurdle for Nifty in the short term.
The Bank Nifty is encountering resistance from a falling trend line, which is placed near 52,300 levels. Thus, 52,000-52,300 will serve as a resistance zone for Bank Nifty, while on the downside, 51,000 will act as strong support.
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty oscillated between 24,800 and 25,000 before closing on a flat note. It seems that the bulls are taking a breather following a rally from 24,200. The trend remains positive, with Put writers putting their weight at 24,800. Buy-on-dips might remain the flavor of the market until the Nifty falls decisively below 24,700. On the higher end, a move above 25,000 might open the gate towards 25,250.
Stocks in F&O ban period
India Cements is the only stock in the futures & options (F&O) ban period on Wednesday.
New listings
Chetana Education and Manglam Infra and Engineering IPOs to debut on the NSE SME platform on Wednesday. The grey market premium data suggests a healthy 25 per cent a listing gain for the former, and a strong 90 per cent for the latter.
Primary market update
Utssav CZ Gold Jewels SME-IPO t o open for subscription in the price band of Rs104 – Rs 110 on the NSE today.
Akums Drugs and Pharmaceuticals Rs 1,857 crore IPO sailed through on Day 1 of the 3-day offer period, with up to 1.4 times subscription. Retail investors bid for up to 3.4 times the allotted quota, while HNIs (High Net Individuals) up to 2 times.
Bulkcorp International, Rajputana Industries, Ashapura Logistics and Sathlokhar Synergies E&C Global IPOs were subscribed up to 12.8 times, 18.7 times, 3.5 times and 5.8 times, respectively, at the end of Day 1 of the offer period on the NSE.
Espirit Stones and S A Tech Software India IPOs close today. These issues at the end of Day 2 were subscribed 16.1 times and 89.80 times, respectively, on the NSE.