 "Market outlook July 05: Nifty eyes 5th weekly gain; SME Nephro Care to list")
Pre-market update Friday, July 05, 2024: The NSE Nifty 50 is in the process of completing a 5-week winning streak, and has rallied nearly 8 per cent during this period. At present levels, the NSE benchmark index holds a weekly gain of nearly 300 points, to make it fifth in a row.
The recent gains are driven by renewed buying interest by foreign investors; hopes of a rate cut in the US and upcoming Union Budget expectations, said analysts.
On Friday, at 07:00 AM, GIFT Nifty futures quoted around 24,367 levels, indicating a likely flat start on the Nifty 50 index.
Global mood
The US market was shut for trading last night owing to the Independence Day holiday. Tonight, the focus will be on the non-farm payrolls and employment data for the month of June. That apart, Fed official Williams is scheduled to address.
Markets, in the Asia-Pacific region, exhibited a lacklustre trend. The Australian stock indexes – the S&P ASX 200 and All Ordinaries were down 0.2 per cent. Japan’s Nikkei was flat, while Malaysia’s Kospi advanced 0.7 per cent.
More From This Section
FII, DII trading activity
Foreign institutional investors (FIIs) were net buyers of stocks worth Rs 2,575.85 crore on Thursday. On the other hand, domestic institutional investors (DIIs) net sold shares to the tune of Rs 2,375.18 crore on July 04.
In the derivatives segment, FIIs net bought index futures worth Rs 898.20 crore on lower volumes. FIIs added a total of 13,362 contracts in index futures; with 4,495 additions in Bank Nifty and 8,902 contracts added to Nifty futures yesterday.
FIIs index long-short ratio edged towards to 5.2:1; meaning more than 5 long index bets for every single short position in index futures. The FIIs net index longs stood at 83.77 per cent, while shorts at 16.23 per cent.
On the other hand, DIIs and retail investors index long-short ratio stands close to 0.5:1; meaning nearly 2 index short positions for every long trade.
Trading strategy for Friday, July 05 - Should you be a buyer or seller in the Nifty, Bank Nifty today? Here’s what market experts have to say:
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
Strong call writing was observed at the 24,400 Strike while strong put writing was observed at the 24,300 Strike in Nifty. The put writers (Bulls) have strengthened their position at the 24,000 & 24,200 Strike in Nifty. The call writers, the Bears, with 1.24 lakh contracts lead the put writers (1.22 lakh contracts) marginally at the 24,300 strike and the option activity at this strike will provide cues about Nifty’s future direction.
In the case of the Bank Nifty, the put writers strengthened their position at the 53,000 Strike. However, the call writers (72K contracts) lead the put writers (36K contracts) sizeably at the 53,200 Strike and the option activity at this strike will provide cues about Bank Nifty’s upcoming direction.
Om Mehra, Technical Analyst, SAMCO Securities
Moving higher within a channel, Nifty opened strong but faced some downward pressure. The key support levels are at 24,140 and 24,100; while resistance remains at 24,440 and 24,500. Notably, the India VIX, the fear gauge, has dipped below 13 levels, indicating lower volatility and more headroom on the higher side.
The Bank Nifty found support from the rising trendline, highlighting the positive trend. If the Bank Nifty slips below 52,800, it can potentially head towards 52,200. The daily RSI displays strength.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, the Nifty has sustained above the 24,200 barrier, indicating strength. As long as the index holds the support of 24,200, it may attempt to test the levels of 24,500-24,600.
The Bank Nifty is consolidating in the band of 52,000-53,200. If the index sustains above 53,200 on an hourly basis, then the rally could extend towards 54,000-54,200 levels.
Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One
Technically, there have been no significant changes since the last closure, but the decline from highs could be interpreted as the initial sign of exhaustion for the bulls. On the level-specific front, the highs of 24,400 could be seen as intermediate resistance for Nifty. While on the lower end of the spectrum, 24,200-24,150 is likely to provide some cushion to any upcoming blips, while 24,100-24,000 withholds the sacrosanct support in the near term.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities
The Bank Nifty index is hovering around the 53000 mark. A sustained move above this level will confirm the ongoing uptrend towards the 53,600 - 54,000 mark. The immediate lower-end support is placed at the 52,700 - 52,500 zone, and dips should be utilized to buy the index. Once the index surpasses the hurdle of 53,200 on a closing basis, further short covering is expected.
The higher-end resistance for the Nifty is placed at 24,500, where the highest open interest is build on the call side. A break above this mark will likely see a fresh move on the upside. The lower-end support is at the 24,200 - 24,150 zone, and a decisive break below this level could lead to further selling pressure towards the 24000 - 23800 mark.
New listings today
Nephro Care India IPO to debut on the SME platform today. This will be the first SME listing post Sebi cap on SME listing price announced on Thursday.
“To standardise the opening price discovery/ equilibrium price across exchanges during special pre-open session for initial public offer (IPO) for the SME platform, it has been decided to put an overall capping up to 90 per cent over the Issue price for SME IPOs,” said NSE in a circular.
In contrast, Nephro Care stock commanded near about 200 per cent premium to its issue price in the grey market.
Primary market update
Two IPOs (Initial Public Offer) in the SME segment – Ganesh Green Bharat and Effwa Infra & Research to open for subscription on Friday.
Meanwhile NSE data shows, Bansal Wire – SME IPO was 2.5 times; and the main-board Emcure Pharma IPO was subscribed 2.1 times at the end of Day 2 of the offer period. Ambey Labs SME IPO saw demand for up to 15.5 times on Day 1.