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The Indian share market is poised for a dynamic trading day on 18th September 2024. This article delves deep into the key market trends, global and domestic influences, and stock-specific developments that traders and investors need to be aware of. From cautious sentiments surrounding the US Federal Reserve’s rate decision to significant movements in oil and commodity prices, the market outlook presents a nuanced picture. Let’s explore the major highlights of today’s pre-market session, technical analysis, and actionable insights.
Global Market Sentiment – A Mixed Outlook
The global markets are treading cautiously, with investors awaiting crucial economic updates, especially from the US Federal Reserve. The Federal Reserve is expected to cut interest rates, and investors are keenly watching for signals about future rate movements. This global economic backdrop is influencing markets worldwide, including the Indian market.
- Dow Jones: The Dow Jones closed slightly lower, with a loss of 15.90 points (-0.04%), after hitting an intraday record high.
- Nasdaq and S&P 500: These US indices closed with minor gains, reflecting the mixed performance of US markets ahead of the Federal Reserve’s policy decisions.
- Asian markets: Showed mixed results, largely reflecting concerns over Japan’s export growth slowdown and an emerging trade deficit.
Crude oil prices remained steady after reaching their highest levels in over two weeks, while the US dollar held firm amid slight movements in Treasury yields. Gold prices, on the other hand, remained stable as investors await the Federal Reserve’s upcoming announcement.
Indian Market Outlook – A Cautious Start Expected
The Indian markets are expected to open flat, with cautious sentiment driven by global cues. GIFT Nifty indicates a flat opening, and with mixed results in Asian markets, a slow start seems likely for the Indian indices. However, there are several domestic developments that will influence market activity throughout the day.
Key Domestic Market Highlights
Indian Indices Performance
As of the pre-market session:
- Sensex: 83,079.66 (+90.88 points)
- Nifty 50: 25,418.55 (+34.80 points)
- Nifty Bank: 52,188.65 (+35.50 points)
The steady performance of Nifty Bank suggests that financial stocks may lead the market today. The India VIX volatility index is also indicating relatively stable market conditions.
Impact of Government Policies
A significant domestic development is the removal of the windfall tax on domestically produced crude oil, effective 18th September 2024. This is a notable move that will have a positive impact on companies involved in crude oil production, such as ONGC, Oil India, Vedanta, and Reliance Industries. Investors can expect heightened activity in these stocks as they react to this policy change.
Read More: Pre-Market News for Indian Share Market – 17th September 2024: Key Insights and Market Analysis
Technical Analysis – Nifty 50 and Bank Nifty
Nifty 50 Analysis
The Nifty 50 index closed at 25,419, marking a new high with gains of 35 points. The index is moving within a rangebound pattern, which might indicate a breather before a continuation of the current uptrend.
- Immediate support is at 25,350. A break below this level could lead to a correction toward 25,000.
- Resistance is at 25,500. If the index moves above this level, it could see a strong upside with the next target at 26,000.
A Doji candlestick pattern has emerged, signaling market indecision. The index is trading near an upward-sloping resistance trendline, which could either result in a breakout or a brief pullback. Traders should monitor these levels closely for short-term opportunities.
Bank Nifty Analysis
The Nifty Bank has continued to exhibit bullish momentum, supported by a 20-day moving average (DMA) crossing above the 50-DMA, forming a bullish crossover.
- Immediate support is at 51,700 – 51,750, and as long as the index holds these levels, it is likely to test 52,800 – 53,000.
- Despite some selling pressure, Bank Nifty has managed to close above the flat line, signaling sustained bullish sentiment.
The index has now formed higher highs and higher lows for the fourth consecutive session, and traders should be mindful of any bearish candlestick patterns, as volatility remains a concern.
Nifty Options Data
The Nifty options data provides valuable insights into market sentiment:
- Maximum open interest in call options is observed at the 26,000 strike (1.07 crore contracts), which will act as a key resistance level.
- Significant call writing has been noted at the 26,000 strike (11.18 lakh contracts added), followed by the 25,800 and 26,500 strikes.
On the put options side, maximum open interest is at the 25,000 strike (60.69 lakh contracts), providing strong support. Noteworthy put writing was observed at the 25,400 strike (10.32 lakh contracts added).
Top Stocks in Focus Today
Several stocks are expected to see increased activity based on the latest developments:
Infosys
- Infosys has partnered with Metro Bank to accelerate the bank’s digital transformation. This strategic partnership is likely to boost Infosys’ market standing in the financial services domain.
Reliance Power
- The company has settled a ₹3,872.4 crore obligation with CFM Asset Reconstruction and is now debt-free from banks and financial institutions. This will likely generate positive investor sentiment and propel the stock upwards.
Torrent Power
- Torrent Power has received a Letter of Intent (LoI) for procuring 1,500 MW of energy storage capacity from Maharashtra State Electricity Distribution Company. This is a significant step towards renewable energy expansion.
Oil Companies
- ONGC, Oil India, Vedanta, and Reliance Industries will be in focus after the government removed the windfall tax on domestic crude oil production, effective from today. This policy change should provide a positive boost to these stocks.
RattanIndia Enterprises
- Revolt Motors, a subsidiary of RattanIndia Enterprises, has launched two new electric motorcycles—the RV1 and RV1+—priced at ₹84,990 and ₹99,990, respectively. The electric vehicle market in India is rapidly growing, and these launches position the company as a key player in the sector.
Sectoral Analysis
Energy Sector
The removal of the windfall tax on domestically produced crude oil has set a positive tone for energy companies, especially those involved in oil and gas production. Stocks like ONGC, Vedanta, and Reliance Industries are expected to benefit significantly from this policy change.
Information Technology
The IT sector continues to see strong activity, with Infosys announcing strategic partnerships to boost digital transformation efforts globally. The sector is likely to perform well today, driven by demand for IT services and ongoing technological advancements.
Electric Vehicles
The electric vehicle sector is gaining momentum, with Revolt Motors launching two new electric bikes. The company’s competitive pricing and focus on expanding its product portfolio indicate strong growth potential in the Indian EV market.
Market Sentiment and Institutional Activity
FII/DII Activity
On 17th September 2024, Foreign Institutional Investors (FII) were net buyers, with purchases amounting to ₹482.7 crore. Domestic Institutional Investors (DII) also showed strong buying interest, with total purchases of ₹874.2 crore. This simultaneous buying from both FIIs and DIIs suggests a broadly positive sentiment towards the Indian markets.
Put/Call Ratio (PCR)
The Put/Call Ratio (PCR) for major indices indicates market sentiment:
- Nifty PCR: 1.0377, suggesting a moderately bullish outlook.
- Bank Nifty PCR: 1.1667, reflecting a more bullish sentiment for the banking sector.
- Fin Nifty PCR: 0.8814, slightly bearish, indicating cautious sentiment in the financial sector.
The overall sentiment suggests that while some caution remains, there is potential for upside movement in the broader market.
Conclusion – Navigating the Market on 18th September 2024
The Indian share market is expected to open flat, with global cues playing a significant role in dictating initial market movements. However, strong domestic factors, such as the removal of the windfall tax on crude oil, robust institutional buying, and positive stock-specific news, could lead to a positive market trajectory as the day progresses.
Investors should focus on oil companies, IT stocks, and electric vehicle manufacturers, as these sectors are likely to see significant action. Nifty and Bank Nifty are trading at key support and resistance levels, so traders should monitor these levels closely for potential breakouts or corrections.
In conclusion, while global factors like the US Federal Reserve’s interest rate decision and Japan’s export slowdown may introduce volatility, the Indian market remains resilient, with several bullish opportunities across sectors. Keep a close eye on market trends, and stay updated with technical levels to make informed trading decisions today.