NIFTY OUTLOOK FOR 25 SEP 2024

Market Overview:

The Indian equity markets witnessed a mix of bullish and bearish activity in today’s volatile trading session. The session started on a muted note, with the Nifty Index correcting slightly before oscillating within a narrow range. The Information Technology (IT) sector provided significant support, helping the Index surpass the psychological barrier of 26,000. However, the gains were wiped off towards the end, with the Nifty closing just below the 26,000 mark.

The market was characterized by mixed performance across sectors, with Metals leading the gainers and Public Sector Banks (PSU Banks) emerging as the major laggards. The broader markets showed a diverging trend, with Midcaps outperforming the frontline Index, while Smallcaps ended the session in the red.

Key Market Data:

• Nifty closed at 25,940.40, up by 1.40 points or 0.01%.
• Sensex closed at 84,914.04, down by 14.57 points or 0.02%.
• Market breadth was mixed with 1,871 shares advancing, 1,946 shares declining, and 84 shares remaining unchanged.

Technical Analysis:

A Spinning Top candlestick pattern formed at record levels, signaling indecisiveness between bulls and bears. This pattern suggests that while the market touched high levels, the fight between buyers and sellers intensified, leading to a flat close.

• Resistance: A strong breakout above 26,000 will pave the way for the Nifty to reach 26,100.
• Support: On the downside, the 25,800-25,850 zone will act as a crucial support area for the index.

The Nifty is still trading above its critical 21-day EMA (Exponential Moving Average), and the bullish crossover in the daily RSI indicates short-term positivity. However, to maintain the upward trajectory, a decisive break above 26,000 is essential. Otherwise, the index is likely to remain range-bound between 25,800 and 26,000 in the near term.

Sectoral Performance:

• Top Gainers:

  • Metals: The Metal Index surged by 3%, with stocks like Tata Steel and Hindalco Industries leading the gains.
  • Oil & Gas: Up by 0.6%, supported by gains in major energy companies.
  • Power: The Power Index rose by 1.4%, with Power Grid Corp among the top contributors.

• Top Losers:

  • PSU Banks: The PSU Banking sector was the worst performer, down by 0.5-1%.
  • FMCG: Marginally down as well, weighed by stocks like HUL.
  • Telecom: Also saw a decline of 0.5-1% during the session.

Top Gainers & Losers:

• Biggest Nifty Gainers:

  1. Tata Steel
  2. Hindalco Industries
  3. Power Grid Corp
  4. Tech Mahindra
  5. Adani Enterprises

• Biggest Nifty Losers:

  1. SBI Life Insurance
  2. HUL (Hindustan Unilever)
  3. Grasim Industries
  4. UltraTech Cement
  5. Shriram Finance

Broader Market Performance:

• Midcap Index: Outperformed the frontline index, showing resilience amidst volatility.
• Smallcap Index: Ended on a flat note, signaling weakness in smaller stocks compared to their midcap counterparts.

Outlook:

The short-term sentiment remains positive for Nifty, but the market appears to be taking a breather after a three-day rally. For the rally to continue, it is crucial for Nifty to break decisively above 26,000. Until that happens, expect range-bound movement within the 25,800-26,000 range.

The broader market performance also reflects a mixed sentiment, with Midcaps showing strength while Smallcaps remain under pressure. Investors should continue to monitor the 26,000 level closely for further direction, with Metals, IT, and Power sectors looking promising for the next sessions.