GIFT Nifty down 1%, Nikkei slides 5%: Triggers for stock market on Aug 2

All you need to know before market opens on Friday: Global shares tumble as fears of US economic slowdown resurface; 24,800 is key support for on the Nifty, say experts. Ola Electric IPO opens today.

Stock market preview, Friday August 02, 2024: Equity benchmark indices are likely to start today’s trading session on a dismal note mirroring the gloomy mood in global peers.

At 07:00 AM, GIFT Nifty futures quoted around 24,800 levels – hinting at over 200 points gap-down at the opening bell on the Nifty 50 index.

On Thursday, the NSE Nifty 50 topped the 25,000-mark for the first time ever, while the Sensex crossed the 82,000 mark in intra-day deals. However, weak cues from global peers are likely to weigh on the sentiment today.

Why are global markets falling today?

Overnight in the US market, stocks fell sharply on earnings disappointment and weaker-than-expected manufacturing data. The US ISM manufacturing index for July contracted to 46.8, below the 48.2 forecast; thus sparking fears that the economy may be slowing down.

 

NASDAQ plunged 2.3 per cent to 17,194. The S&P 500 and Dow Jones tumbled over 1 per cent each to 5,447 and 40,348, respectively.

The US 10-year bond yield dipped below the 4 per cent mark. Among commodities, Gold futures hovered near about the $2,500-mark, while WTI Crude Oil futures slipped below the $77-mark.

Closer home in Asia, Japan’s Nikkei which plunged 2.6 per cent yesterday was down another 5 per cent this morning with Japanese bond yields falling below 1 per cent mark on fears of further interest rate Malaysia’s Kospi shed 2.8 per cent, and Straits Times was down 0.9 per cent in morning deals.

Indian stock market: GIFT Nifty hints at a weak start; here’s how experts recommend trading Nifty and Bank Nifty today.

Trading strategy in Nifty for Friday, August 02 2024

Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One

Despite the Nifty heading for new highs, the market breadth remains restrained, with limited support from the bulls indicating a sign of timidity. The correction in the mid and small-cap indices stirred some caution and dampened the undertone.

From a technical standpoint, Nifty refrained from showcasing an authoritative move and was crippled due to broad-based profit booking. As far as levels are concerned, 24,800 remains the crucial support zone with anticipation of buying emergence, followed by the sacrosanct support of 24,600-24,500 zone. On the higher end, 25,080-25,100 seems an intermediate obstacle, followed by the golden retracement placed at 25,340 zone in the comparable period.

Om Mehra, Technical Analyst, SAMCO Securities

The Nifty maintained its strong upward momentum, staying above all the short-term moving averages. The robust support at 24,800, and any pullback towards the 24,900 level presents a buying opportunity for the short term. The Nifty's position within the upper band of the Donchian Channels on the hourly chart further signals a bullish outlook.

Trading strategy in Bank Nifty for Friday, August 02 2024:

Dhupesh Dhameja, Technical Analyst, SAMCO Securities

The outlook for Bank Nifty remains bearish. The index faces resistance from its 20-day EMAs. Trading within a range of 52,000-51,200, a sustained breakout above 52,000 could drive the index up to 52,500-52,800. Conversely, a breakdown below 51,200 could trigger a downward move, with the next support level at 50,800. Until the index breaks out of this range, no major movements are expected.

Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates

Technically, the Bank Nifty is still consolidating in the band of around 51,000-52,300. Moreover, the Bank Nifty is facing rejection from a falling trend line at 52,300 levels. Thus, 52,000-52,300 will serve as a resistance zone for the Bank Nifty, while 51,000 will act as strong support.

Where is the big money moving? Here’s an update on the latest FII, DII trading activity

On Thursday, foreign institutional investors (FIIs) net bought stocks worth Rs 2,089.28 crore. On the other hand, domestic institutional investors (DIIs) were net sellers of shares to the tune of Rs 337.03 crore.

In the derivatives segment, FIIs net bought 22,059 contracts of index futures for a consideration of Rs 1,390.15 crore on August 01. FIIs net bought 22,475 contracts of Nifty futures, and 639 contracts of Bank Nifty; while were net sellers of 946 contracts of MidCap Nifty futures.

Pursuant to which, FIIs long-short ratio in index futures stood at 2:1. This ratio implies that foreign investors hold 2 long positions in index futures for every bet on the short side. The FIIs longs in index futures stood at 66.34 per cent.

ALERT derivatives trader - Stocks in F&O ban period

Birlasoft, GNFC, Granules India, India Cements IndiaMart and RBL Bank are the six stocks in the futures & options (F&O) ban period on Friday. 

New listings 

S A Tech Software India to list on the NSE SME platform today. The stock commanded an over 90 per cent premium to its issue price in grey market deals.

Whereas, Esprit Stones was seen quoting at premium of 37 per cent ahead of its NSE SME listing.

Primary market update

Ola Electric Rs 6,145.56 crore IPO opens for subscription on Friday in the price band of Rs 72 – Rs 76 per share. The company has successfully raised Rs 2,763 crore from anchor investors. Here’s all you need to know about the issue. READ MORE

That apart, Picturespot Studios IPO opens for subscription in the SME segment. Shares of the company’s Rs 18.72 crore IPO are available in the price band is Rs 22 – Rs 24 per share. Similarly, Afcom Holdings to offer shares worth Rs 73.83 crore in the price band of Rs 102 – Rs 108 per share on the BSE SME platform starting today.

Meanwhile, Utssav Cz Gold Jewels IPO closes today. The issue so far was subscribed 8.4 times. Ciegall IPO and Dhariwalcorp IPO were subscribed up to 0.6 times and 3.4 times at the end of Day 1 on Thursday.