NIFTY WEEKLY REPORT & OUTLOOK FOR 5 AUG 2024

Overview

The Indian benchmark indices ended their five-day winning streak with a significant decline. The Nifty index closed below the crucial 24,750 mark, driven by a global sell-off and lack of new upward triggers.

Key Indices Performance

• BSE Sensex: Down 885.60 points (1.08%) to close at 80,981.95
• NSE Nifty: Down 293.20 points (1.17%) to close at 24,717.70

Market Analysis

The market experienced a sharp decline, with the Nifty forming a spinning top pattern on the daily timeframe. The Relative Strength Index (RSI) indicator showed a downward trend, suggesting a bearish crossover. The market sentiment appears to favor "sell on rise" traders as long as the Nifty remains below 24,800.

Support and Resistance Levels:

• Nifty Support: 24,530 and 24,400
• Nifty Resistance: 24,820 to 24,850

Bank Nifty Performance:

• Consolidated around the 40-day moving average (51,318), with less intensity in the fall compared to Nifty.
• Bank Nifty Support and Resistance Levels: 52,550 to 50,440

Sectoral Performance

• Outperformers: BSE Power, BSE Healthcare, BSE Oil & Gas, and BSE Power
• Underperformers: BSE Realty, BSE Auto, BSE IT, and BSE FMCG

Market Breadth

• Advances: 1426 shares
• Declines: 1960 shares
• Unchanged: 83 shares

Key Gainers and Losers

• Top Nifty Gainers: Divis Labs, HDFC Bank, Dr Reddy's Labs, Sun Pharma, Kotak Mahindra Bank
• Top Nifty Losers: Eicher Motors, Maruti Suzuki, Tata Motors, Hindalco Industries, JSW Steel

Midcap and Smallcap Performance

• BSE Midcap Index: Down 1%
• BSE Smallcap Index: Down 0.5%

Domestic and Global Factors

• Domestic Data: India Manufacturing PMI at 58.1, GST collection growth of 10%
• Global Influences:
  • US Fed kept rates unchanged with a hint at a potential rate cut in September.
  • Bank of England announced a 25 basis points rate cut.
  • Weak earnings from the US IT sector.
  • Concerns over a rise in US unemployment and potential further rate hikes by the Bank of Japan.
  • Slowdown in China’s growth.

Future Outlook

• Nifty: Expected to retrace towards 24,600 to 24,550, with support from the 20-day moving average and the 38.2% Fibonacci retracement level.
• Bank Nifty: Likely to remain range-bound, with crucial levels to watch between 52,550 and 50,440.

The recent broad-based sell-off indicates market exhaustion and lack of new triggers for further upward movement. Investors will closely monitor Q1FY25 earnings and global equity market trends in the coming weeks.