NIFTY OUTLOOK FOR 31 JULY 2024

Market Overview

The domestic market ended relatively flat, largely due to profit-booking at higher levels. Despite the cautious sentiment, optimism was bolstered by expectations of dovish comments from the US Federal Reserve and the Bank of England (BoE) in their upcoming policy meetings this week. Additionally, investors are keenly observing the BoE and the Bank of Japan (BoJ), anticipating contrasting policy moves. The BoE is expected to consider lowering rates in response to rising unemployment and easing inflation, whereas the BoJ may increase rates due to surging inflation, potentially introducing market volatility.

Index Performance

The indices experienced a mixed session:

• Nifty50: After a muted opening, the Nifty50 surged higher, led by the Energy and Auto sectors. However, the gains were pared towards the session's end, with the index settling at 24,857, up 21 points. The formation of a DOJI candlestick pattern suggests indecisiveness between the bulls and bears. The index faces a strong psychological resistance at 25,000, with immediate support at 24,800 and 24,660.

• Sensex: The Sensex closed marginally higher, gaining 99 points ending at 81,455.

• Broader Markets: The broader markets continued their outperformance streak:

  • BSE Midcap Index: Rose by 0.3%.
  • BSE Smallcap Index: Advanced by 0.9%.

Sectoral Performance

Except for the FMCG and Healthcare sectors, all other sectoral indices ended in the green:

• Top Gainers: Power, Realty, and Auto sectors led the gains, up between 0.5%-1%.
• Sectoral Losers: FMCG and Healthcare sectors underperformed.

Top Gainers and Losers

• Top Nifty Gainers:

  • BPCL
  • NTPC
  • Tata Motors
  • Power Grid Corp
  • Asian Paints

• Top Nifty Losers:

  • Cipla
  • LTIMindtree
  • SBI Life Insurance
  • Grasim Industries
  • Sun Pharma

Market Sentiment

The market sentiment remains cautious but optimistic, influenced by global cues and expectations of policy announcements. The mixed performance across sectors indicates a careful positioning by investors, balancing between potential gains and risk aversion.

Outlook

The market's near-term direction will likely be influenced by the upcoming policy decisions from major central banks. Investors are advised to closely monitor global economic indicators and central bank comments for cues on market direction. The psychological resistance at 25,000 for the Nifty50 remains a crucial level to watch, with significant support at 24,800 and 24,660.