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The Indian share market is bracing for another eventful trading session on 19th September 2024, with global and domestic factors shaping the market sentiment. From the US Federal Reserve’s latest rate cut to significant movements in commodity prices and individual stock news, today’s pre-market session presents a mix of opportunities and risks for traders and investors alike.
This article will delve into the global market cues, Indian market trends, and provide technical analysis of major indices such as Nifty 50 and Bank Nifty. We will also discuss the latest stock-specific developments and FII/DII activity to offer a comprehensive picture of what investors should look for in today’s trading session.
Global Market Overview – Caution After the Fed’s Rate Cut
Global markets are processing the impact of the US Federal Reserve’s 50 basis points rate cut, which was larger than expected. However, despite this aggressive monetary policy move, US stock markets ended lower on Wednesday, signaling investor caution about the future trajectory of the economy.
- Dow Jones: The Dow Jones closed 103.08 points lower (-0.25%) at 41,503.1, reflecting concerns about the Federal Reserve’s policy and economic outlook.
- Nasdaq and S&P 500: These major indices also saw slight declines, with tech stocks continuing to face pressure.
Asian markets reacted positively, with Japan’s Nikkei leading the way, buoyed by optimism following the Fed’s rate cut. Crude oil prices fell amid concerns over economic weakness, while the US dollar strengthened, reversing earlier losses.
Indian Market Sentiment – A Flat Start Expected
The Indian share market is expected to open flat, with GIFT Nifty showing muted movement. Despite the global caution surrounding the Fed’s rate cut, Asian markets have shown resilience, and the Indian markets are likely to take cues from the mixed global trends.
Indian Indices Performance
As of the latest data:
- Sensex: 82,948.23 (-131.43 points)
- Nifty 50: 25,377.55 (-41.00 points)
- Nifty Bank: 52,750.40 (+561.75 points)
Despite the losses in Sensex and Nifty 50, Nifty Bank posted substantial gains, driven by the strong performance of banking stocks like ICICI Bank, which hit a record high.
Technical Analysis – Nifty 50 and Bank Nifty
Nifty 50 Analysis
The Nifty 50 index reached a new record high of 25,482 on Wednesday but faced a sharp sell-off before recovering. This volatility reflects the market’s cautious stance ahead of global economic developments.
- Key support is at 25,300, and a decisive upmove towards 25,500 could lead to higher targets. However, 25,500 is expected to be a tough resistance level.
- A break below 25,300 could lead to a correction toward 25,000–24,900 levels.
- IT, Pharma, and Metal stocks experienced heavy selling pressure, with Nifty IT seeing its worst drop in two months.
Despite the market volatility, Nifty remains above its key moving averages, which indicates that the short-term trend is still positive. However, investors should brace for potential rangebound action in the coming sessions.
Bank Nifty Analysis
Unlike Nifty 50, Bank Nifty has continued to perform exceptionally well, driven by ICICI Bank’s record-breaking performance and the broader strength of the banking sector.
- Bank Nifty has gained 1,600 points over the last five sessions, forming a bullish candle on the daily chart.
- The index is nearing the 53,000 mark, which could act as resistance, with potential upside towards 53,500–53,800.
- Support is seen at 52,000 and 51,700 levels.
Banking stocks are likely to remain in focus today, particularly with ICICI Bank continuing to push the index higher.
Options Data – Nifty Call and Put Analysis
The Nifty options data provides critical insights into market sentiment and key levels to watch:
Nifty Call Options (Weekly Expiry)
- Maximum open interest is at the 26,000 strike (1.07 crore contracts), which will act as key resistance for the index.
- Significant call writing was observed at the 25,500 strike (21.59 lakh contracts added), followed by the 26,200 and 25,800 strikes.
Nifty Put Options (Weekly Expiry)
- Maximum open interest on the put side is at the 25,000 strike (71.31 lakh contracts), offering strong support.
- Significant put writing was seen at the 24,500 strike (17.23 lakh contracts), followed by the 24,800 and 25,000 strikes.
This options data indicates that while there is strong support at 25,000, the resistance at 25,500 will be a crucial level for the market to conquer if it is to maintain its upward momentum.
Stocks in Focus Today
Several stocks are expected to be active in today’s session due to recent developments and news. Here are some of the key names:
IREDA (Indian Renewable Energy Development Agency)
- IREDA received approval from DIPAM for the dilution of up to 7% of the government’s stake, which is expected to raise approximately ₹4,500 crore. This news is likely to drive interest in the stock.
Garden Reach Shipbuilders
- The company secured an additional $54 million order from a German firm, bringing its total order book to $108 million. This upgrade to a Schedule ‘A’ CPSE is a significant milestone.
Nazara Tech
- Nazara Technologies announced a ₹900 crore fundraise to support its expansion and acquisitions. Additionally, it increased its stake in Sportskeeda’s parent company to 91%, solidifying its position in the digital entertainment and gaming space.
Power Grid Corporation
- Power Grid won the bid to establish an inter-state transmission system in Madhya Pradesh, enhancing its portfolio of power transmission assets.
ION Exchange
- The company secured a ₹161.2 crore order from Adani Power, adding to its robust order book.
Macrotech Developers
- Macrotech Developers has approved the acquisition of Ivanhoe’s stake in digital infrastructure entities for ₹240 crore, marking a significant strategic investment in the digital space.
NTPC
- NTPC Green Energy, a subsidiary of NTPC, has filed draft papers to raise ₹10,000 crore via an IPO, which is expected to attract significant investor interest.
Sectoral Performance and Outlook
IT Sector
The IT sector faced heavy selling pressure, with major stocks like TCS, Infosys, HCL Technologies, Tech Mahindra, and Wipro seeing declines. Nifty IT recorded its worst performance in two months, driven by global uncertainties and the impact of the US Federal Reserve’s policy decisions on tech stocks.
Banking Sector
The banking sector remains the standout performer, with ICICI Bank leading the charge. Nifty Bank has been gaining momentum, and with support at 52,000, it is poised to test higher resistance levels in the coming days.
Energy and Power Sector
The energy sector saw significant activity, with companies like IREDA, Power Grid, and NTPC making headlines. The focus on renewable energy and infrastructure development continues to support these stocks, making them attractive for long-term investors.
Read More: Indian Share Market Pre-Market News – 18th September 2024: A Comprehensive Analysis for Investors
FII/DII Activity – Positive Inflows Continue
On 18th September 2024, Foreign Institutional Investors (FII) were net buyers, with total purchases amounting to ₹1,153.7 crore. Domestic Institutional Investors (DII) also continued their buying spree, with net purchases of ₹152.3 crore.
This consistent buying from both FIIs and DIIs reflects strong confidence in the Indian market, despite the global economic uncertainty.
Put/Call Ratio (PCR) – Sentiment Analysis
The Put/Call Ratio (PCR) is an important indicator of market sentiment:
- Nifty PCR: 0.9013, indicating cautious sentiment, but with a slight bullish tilt.
- Bank Nifty PCR: 1.1534, reflecting a bullish outlook for the banking sector.
The overall PCR data suggests that while some caution remains in the broader market, the banking sector continues to show strength and is likely to lead any upward momentum.
Conclusion – Navigating Today’s Market
As we move into the trading session for 19th September 2024, the Indian share market is set to open flat, with global cues providing a mixed backdrop. US Federal Reserve’s rate cut, along with positive inflows from FIIs and DIIs, will shape market sentiment. Investors should closely monitor key technical levels in Nifty 50 and Bank Nifty, as well as the performance of IT stocks
