Market Ends Flat; Nifty Prediction for Tomorrow

Nifty Prediction for Tomorrow

Cautious Calm: Market Ends Flat Despite Sectoral Gains

The Indian stock market displayed a cautious mood on [Date], ending the day flat with a negative bias. While the headline indices, Sensex and Nifty, managed to close near their opening levels, the broader market witnessed selling pressure.

This news article delves deeper into the day’s market movements, analyzing sectoral performances, expert opinions, and technical indicators to offer insights for the upcoming session.

Global Cues and Domestic Market Sentiment

European markets opened higher on positive economic data from the region. However, this positive sentiment waned throughout the day, and the major indices closed modestly higher.

This muted performance in Europe had a limited impact on the domestic market, which primarily focused on domestic factors.

Sectoral Analysis – Winners and Losers

Despite the flat closing, specific sectors displayed contrasting performances:

• Power and Auto Stocks Surge: The power sector witnessed strong buying interest, likely fueled by optimism surrounding rising electricity demand during the summer months. Leading power companies like NTPC and Tata Power witnessed significant gains. Similarly, auto stocks like Maruti Suzuki and Bajaj Auto attracted buying, potentially due to positive industry data and upcoming model launches.

• Profit Booking in Banking and Realty: After a recent rally, banking and realty stocks faced profit booking. This could be attributed to investors taking some money off the table after a period of sustained gains. Major banks like HDFC Bank and ICICI Bank witnessed price declines.

• Consumer Goods, Oil & Gas, and Metals Rise: Consumer goods stocks like Hindustan Unilever and ITC witnessed buying, indicating continued investor confidence in the sector’s resilience. Oil & gas stocks, such as Reliance Industries and ONGC, witnessed modest gains, likely mirroring a slight uptick in global crude oil prices. Metal stocks also edged higher, potentially due to optimism surrounding infrastructure spending and industrial activity.

• Midcap and Smallcap Rally: The broader market, represented by the Nifty Midcap and Nifty Smallcap indices, outperformed the frontline indices. This suggests that investor interest may be shifting towards smaller companies with higher growth potential.

• Government Companies Shine: Public sector enterprises (PSUs) witnessed strong buying, pushing the Nifty PSU Bank index up by 1.5%. This could be due to government initiatives aimed at boosting the PSU sector and expectations of healthy dividend payouts.

Analyst Opinions – Cautious Approach Amidst Lack of Triggers

Market experts attributed the lack of significant movement to the absence of fresh positive triggers. Here’s a breakdown of key analyst viewpoints:

• Prashant Tapse of Mehta Equities: Tapse highlighted the cautious approach adopted by investors due to the absence of new positive triggers. The flat closing with a negative bias was attributed to profit booking in select banking and IT stocks. He further noted that even strong signals from the European market couldn’t bolster the domestic market. The ongoing withdrawal of foreign funds, albeit at a moderate pace, also added a layer of uncertainty.

• Deven Mehta of Choice Broking: Mehta pointed out the volatile nature of the market throughout the day. The Nifty opened lower but maintained a neutral stance despite high volatility. The Bank Nifty also witnessed similar volatility, eventually closing lower on the day of weekly expiry. However, Mehta emphasized that the Bank Nifty managed to find support around 47900, a crucial level.

Technical Analysis – Support and Resistance Levels

Technical analysts use Open Interest (OI) data along with support and resistance levels to gauge market sentiment and predict future movements. Here’s a breakdown of the key technical indicators:

• Open Interest (OI): Open Interest refers to the number of outstanding derivative contracts (calls and puts) at a specific strike price on a particular expiry date. Higher Open Interest on a call option suggests bullishness at that strike price, while higher Open Interest on a put option indicates bearishness.

• Support and Resistance Levels: Support levels represent price points where buying interest is expected to be strong, potentially preventing further declines. Conversely, resistance levels represent price points where selling pressure might increase, hindering further upward movement.

Deven Mehta of Choice Broking highlighted the support levels for Nifty at 22225-22175. On the options front, he noted that the highest OI on the call side was at 22500, followed by 22700, indicating some bullish bets at these strike prices.

Conversely, the highest OI on the put side was at 22000, suggesting some downside protection being built in by market participants.

Similarly, for Bank Nifty, Mehta identified support at 47700-47500, while resistance sits at 48300 and 48500 levels. This suggests a potential range-bound movement for Bank Nifty in the near future.