 "Stock market guide for May 24: Gift Nifty down 50 pts as global shares slip")
Pre-market update for Indian stock markets Friday, May 24, 2024: After a record-breaking gain of over 1.5 per cent yesterday, the bulls were eyeing further milestones in trades today on the BSE Sensex and the NSE Nifty. The Nifty 50 index, in particular, was within striking distance of the 23,000-landmark.
However, with global mood turning sour, the Indian stock market too may witness some profit-taking on Friday.
At 07:00 AM, Gift Nifty futures quoted around 22,940, hinting at a likely 50-odd point gap-down at the opening bell on the Nifty today.
Among individual stocks, 63 Moons Technologies, Aegis Logistics, Ashok Leyland, Bajaj Healthcare, Bosch, Cochin Shipyard, Coffee Day, EaseMyTrip, Excel Industries, Glenmark Pharma, HCC, Hindalco, Hindustan Copper, HUDCO, Indiabulls Housing Finance, JM Financial, Sai Silks, Kolte Paitl, Karnataka Bank, Manappuram Finance, Max India, NIIT, Noida Toll Bridge, NTPC, SPARC, SSWRL, Sun Tv, Suzlon, Torrent Pharma, TTK Healthcare, United Spirits and Zee Media to be in focus ahead of Q4 earnings.
Global mood
Despite Nvidia heroics, the US market ended notably in red overnight as fears of a delayed Fed rate cut resurfaced following positive activity data. Growth in activity at service providers was the fastest in a year and manufacturing output expanded at a quicker pace.
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Analysts say that such resilience is making it difficult for inflation to cool, helping explain why the Fed is intent on keeping rates higher for longer.
Dow Jones tumbled 1.5 per cent. Nasdaq slipped 0.4 per cent, and the S&P 500 was down 0.7 per cent.
Among commodities, Gold futures quoted eased to $2,330 levels, while Brent Crude Oil consolidatd around the $81-mark. The 10-year US bond yield inched a wee bit higher to 4.47 per cent.
Near home, in the Asia-Pacific region, Japan’s Nikkei shed 1.3 per cent. The S&P ASX 200, All Ordinaries and Kospi were down 0.9 per cent each. Taiwan, however, was up 0.3 per cent.
FII, DII flows
Foreign portfolio investors (FPI) were net buyers of stocks worth Rs 4,671 crore on Thursday. On the other hand, domestic institutional investors (DIIs) net purchased shares worth Rs 146.50 crore yesterday.
Trading strategy for Friday, May 24 - Should you be a buyer or seller today? Here’s what market experts recommend:
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty witnessed a clean breakout above its prolonged consolidation on the daily timeframe, suggesting a sudden surge of renewed optimism. The trend looks very strong following the formation of a large green candle on the daily chart. On the higher end, above 23,000, the Nifty might move towards 23,500 in the short term. On the lower end, support is placed at 22,800; the strength could remain intact as long as the index remains above 22,800.
Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities
The S&P 500 has rallied more than 6 per cent in the month of May while Nifty 500 is up only less than 3 per cent even after Thursday’s rally. So the Indian market was lagging behind peers mainly due to election related uncertainty.
As we move in to the last two phases of the election the uncertainty seems to be reducing and confidence of current dispensation continuing is growing. This has led to filling of this gap and pushed the markets to new highs.
We believe that Nifty could continue to move higher if it’s able to cross the resistance of 23,000 decisively. The next target for Nifty could be 23,500 before the elections results are out.
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities:
Call writers (Bears) exited and put writers (Bulls) aggressively built positions at the 22,500 & 22,600 Strike in Nifty, which led to a sharp Intraday move in Nifty. The call writers (Bears) also exited from the 22,700, 22,800 & 22,900 Strike in the Index. The focus shifts to 23,000 level in Nifty now. The call writers have sizeable positions at the 23,000 Strike, and if the call writers (Bears) exit from this strike, then Nifty is likely to move up even higher.
On the Bank Nifty; call writers (Bears) exited and put writers (Bulls) entered at the 48,000 Strike, which led the strong up move in Bank Nifty. The put writers (Bulls) are leading the call writers (Bears) at the 48,500 Strike by a thin margin and the option activity at this strike will provide cues about Bank Nifty’s future direction.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, the index has crossed the barrier of 22,800 and managed to sustain above it, suggesting strength. Thus, as long as the index holds 22,800, we expect the rally to extend towards 23,100-23,200.
The Bank Nifty has broken short-term resistance of 48,260 levels and managed to close above it, indicating strength. As long as the index holds above 48,000 levels, we expect it to test the levels of 49,000-49,500. Thus, a buy-on-dips approach should be adopted in Bank Nifty.