Market outlook Jul 29: Nifty eyes 25K; Fed rate cut bets spark global rally

All you need to know before the market opens today: GIFT Nifty futures were quoting atop 25,000-mark, hinting at over 100 points gap-up. Nikkei rallied nearly 3 per cent, while Kospi gained over 1 per

Stock market preview, Monday July 29, 2024: Equity benchmark indices – the BSE Sensex and the NSE Nifty are likely to start today’s trading session on a bullish note amid upbeat cues from global peers backed by optimism over September Fed rate cut.

At 07:00 AM, GIFT Nifty futures quoted around 25,050, indicating a likely opening gap of over 100 points crack on the Nifty 50 index.

Among individual stocks, ACC, Data Patterns, HPCL, NDTV, Pfizer, Strides Pharma and Whirlpool of India are few of the notable companies scheduled to announce Q1 results today.

Global mood

The US market rallied sharply on Friday as PCE (Personal Consumer Expenditure)| inflation raised bets of an impending rate cut in September. Dow Jones surged 1.6 per cent (654 points) to 40,589. The S&P 500 and NASDAQ ended with gains in excess of 1 per cent each.

 

The US Federal Reserve will announce its July policy meeting decision on Wednesday. Market participants will closely track the US Fed commentary for remarks over the interest rate trajectory.

The US 10-year bond yield dipped to 4.2 per cent. Among commodities, Gold futures quoted around $2,385 per ounce levels, while Brent Crude Oil futures were hovering around $80 per barrel.

This morning in Asia – Japan’s Nikkei surged 2.7 per cent, and Kospi zoomed 1.4 per cent. 

FII, DII trading activity

Foreign institutional investors (FIIs) net bought stocks worth Rs 2,546.38 crore in the cash market on July 26. Domestic institutional investors (DIIs) were net buyers of shares to the tune of Rs 2,774.31 on Friday.

In the derivatives segment, FIIs net bought 69,774 contracts of index futures for a consideration of Rs 4,366.71 crore on July 26. FIIs net bought 63,023 contracts of Nifty futures, while added 2.433 contracts in Bank Nifty futures and the rest in MidCap Nifty futures.

Pursuant to which, FIIs index futures long-short ratio rose to 1.7. This ratio signifies that FIIs hold near about 2 long positions in index futures for every bet on the short side. The FIIs longs in index futures stood at 62.7 per cent.

Trading strategy for Monday, July 29 - 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 formed a bullish candle with a large body and smaller wicks on both sides. It has exceeded the 10-day moving average, with the daily RSI at 70. The hourly chart remains strong, above the average line of a rising parallel channel. The immediate support remains at 24,550, while resistance is placed at 25,000. Any minor correction towards the 24,750 zone could present a buying opportunity.

The Bank Nifty rebounded from lower levels, maintaining its position above the 50,000-mark and holding above the 50-day moving average. The support remains at 50,900; any minor correction toward 51,000 could be a buying opportunity for the 51,800-51,900 range.

Dhupesh Dhameja, Technical Analyst, SAMCO Securities

The bulls continue to maintain a substantial lead, with the Nifty staying above key averages. The Relative Strength Index (RSI) on the daily chart moved towards 70, further empowering the bullish sentiment.

The view remains ‘buy on dips’. The support levels for the upcoming sessions are at 24,700 and 24,600, while resistance is expected at 24,900 and 25,000.

The Bank Nifty formed a significant bullish candle and closed above the 51,200 mark. Additionally, it finished above the 50-day Exponential Moving Average (DEMA), with the Relative Strength Index (RSI) taking support near the 40 mark, both acting as a solid base for the index.

Based on existing options data and market sentiment, the outlook for the Bank Nifty remains sideways to bullish. As the index has regained above the 51,000 level and the RSI has established a strong base at 40, there will be buying interest as long as the index sustains above 51,000. The immediate resistance levels are at 51,900-52,000.

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

Technically, the Nifty formed a significant bullish candle on both the daily and weekly scales, indicating underlying strength. If the index sustains above 24,860, it may attempt to test the psychological level of 25,000.

The Bank Nifty has formed a bullish belt hold pattern and successfully maintained above 51,100 on a weekly basis, signaling strength. In the short term, 51,800-52,000 will serve as resistance levels for the index.

Rupak De, Senior Technical Analyst, LKP Securities

A fairly large green candle on the Nifty after several insignificant candles clearly signals a bullish trend ahead. The trend might remain positive as long as the index stays above 24,500. On the higher end, the index might move towards 25,250.

On the daily chart of Bank Nifty, an outside day pattern has formed, suggesting a possibility of price expansion. Additionally, the index has reclaimed the 50-period exponential moving average. Over the short term, the trend might witness a bullish reversal. Going forward, a move above 51,500 might induce a decent rally towards 52,500. On the lower end, support is placed at 51,000.

New listings 

RNFI Services to debut on the NSE SME platform on the Monday. The grey market premium indicates a likely robust listing for the RNFI stock.

Primary market update

Aprameya Engineering and Trom Industries IPOs to close for subscription today; the former has seen 5.5 times subscription while the latter was subscribed 32.4 times at the end of Day 2 of the offer period.

Espirit Stones and S A Tech Software India IPOs were subscribed 1.9 times and 13.5 times, respectively, at the end of Day 1 of the offer period on the NSE.

Meanwhile, Clinitech Laboratory IPO was subscribed up to 6 times on the BSE SME platform.