 "Market outlook Jul 02: GIFT Nifty hints muted open; Allied Blenders to list")
All you need to know before the Indian stock market opens for trade on Tuesday July 02, 2024: Indian equity benchmark indices are likely to start Tuesday’s trading session on a quiet note amid benign cues from global peers.
At 07:00 AM, GIFT Nifty futures quoted around 24,245 levels, indicating a likely muted start to the trading action on Tuesday.
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Global mood
Overnight in the US, NASDAQ surged 0.8 per cent led by a pullback in Nvidia and Tesla shares. The S&P 500 advanced 0.3 per cent, while Dow Jones added 0.1 per cent. Tonight, the focus will be on the upcoming address by Federal Reserve Chair Jerome Powell for more cues on interest rates.
Further, expectations from the key payrolls data and the minutes of the Fed’s June meeting ahead of the trading holiday on July 4, is likely to keep trading sentiment in check.
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The US 10-year bond yield spiked to 4.47 per cent. Among commodities, Gold futures rose to $2,340 per ounce, while Brent Crude Oil jumped to $86.75 per barrel mark.
Markets, in the Asia-Pacific region, displayed a mixed trend this morning. Japan’s Nikkei quoted around its previous day’s close. The Australian equity benchmarks too were flat. Kospi, however, was down 0.8 per cent.
FII, DII flows
Foreign institutional investors (FIIs) net sold stocks to the tune of Rs 426 crore on Monday. On the other hand, domestic institutional investors (DIIs) were net buyers of shares worth Rs 3,917 crore.
In the derivatives segment, FIIs index long-short continued to remain firmly around 5:1, meaning nearly 5 long bets for every single short position in the index futures. The FIIs net index longs rose to 82.62 per cent, while shorts fell to 17.38 per cent.
FIIs net bought index futures for the 16th straight trading session on Monday. FIIs added 3,190 net longs in index futures for an investment of Rs 263.90 crore. FIIs mostly bought into Bank Nifty (3,657 contracts) and MidCap Nifty (2,360 contracts), while net selling 2,765 Nifty futures contracts.
On the other hand, DIIs and retail investors continued to remain net short in index futures. The former held 61.64 per cent trades in index shorts, while accounted for 65.86 per cent index shorts.
Trading strategy for Tuesday, July 02 - Should you be a buyer or seller in the Nifty, Bank Nifty today? Here’s what experts recommend:
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
The 24,000 & 24,100 Strike saw significant put writing, which led the steady up move in the Nifty Monday. The maximum put open interest for Nifty is placed at the 24,000 Strike. This level will act as the immediate support for Nifty. The call writers, the Bears, (1.62 lakh contracts) lead the put writers (62K contracts) at the 24,200 strike and the option activity at this strike will provide cues about Nifty’s future direction.
On the Bank Nifty, both the 52,500 & 52,600 Strike saw fierce battle between both the call (Bears) & put (Bulls) writers. However, the 52,900 & 53,000 Strike saw put writers exiting, making the resistance at 53,000, stronger. The put writers (1.43 lakh contracts) lead the call writers (1.13 lakh contracts) marginally at the 52,500 Strike and the option activity at this strike will provide cues about Bank Nifty’s upcoming direction.
Om Mehra, Technical Analyst, SAMCO Securities
On Monday, Nifty's opening and low values remained almost the same. However, the index has moved higher but with less momentum. The upper Bollinger band on the hourly chart is at 24,220, serves as immediate resistance, while another resistance level is at 24,300. Conversely, if the Nifty falls below 24,050, it could decline towards the 23,900-23,850 zone.
The Bank Nifty has formed a bullish candle in the daily time frame but moved below the regression line. The hourly MACD indicates a slight slowdown in the bullish trend. The 20-day moving average (DMA) is placed at the 51,000 level. Bank Nifty could consolidate or oscillate within the 52,200-53,200 range in the next session.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, the Nifty is finding resistance near the 24,150-24,200 levels. If the index sustains above 24,200, then the rally could extend towards 24,500-24,600 levels in the short term.
The Bank Nifty is still trading below short-term trend line resistance. Thus, for the short term, the 53,000-53,200 levels will act as a hurdle for Bank Nifty. If the index sustains above 53,200, then the rally could extend towards 54,000.
Rupak De, Senior Technical Analyst, LKP Securities
The Bank Nifty has made a lower top on the hourly time frame, signifying weakening bullishness. Immediate support is visible at 52,500. A decisive fall below 52,500 might trigger a correction in the banking space. However, if it sustains above 52,500, the index might move back towards higher levels. On the higher end, it might move towards 52,800/53,000 in the short term.
The Nifty remained in the bulls' grip as the index sustained above 24,000 in the initial trades, leading to a rally towards 24,150. Continuous short build-up by the put writers has been protecting the market from falling.
Going forward, the trend might remain strong as long as it stays above 24,000. A fall below 24,000 might lead to a correction towards 23,850/23,700. On the other hand, a decisive move above 24,200 might take the index towards 24,500.
New listings today
A total of 4 new stock listings are going to take place on Tuesday, 1 on the main board, and 3 SMEs. The main board IPO - Allied Blenders and Distillers likely to debut at 20 per cent premium, suggests quotes from grey market premium.
That apart, shares of Divine Power IPO were seen commanding a 150 per cent premium in the grey market, and Petro Carbon and Chemicals up to 50 per cent. The Money Fair SME, however, was quoting at 6 per cent premium.
Primary market update
Bansal Wire Rs 745 crore IPO and Emcure Pharma Rs 1,952 crore IPO to open for subscription today. The former share sale is in the price band of Rs 243 – Rs 256 per share; while the latter is offering stocks in the price range of Rs 960 – Rs 1,008.
Meanwhile, Nephro Care India IPO will close for subscription on Tuesday. The issue has garnered over 127 times subscription so far.