As we head into the trading session on 20th September 2024, the Indian markets are expected to open on a positive note, largely driven by a global rally. The US Federal Reserve’s 50 basis points rate cut has set the tone for a bullish outlook in markets worldwide, leading to record highs in key indices such as the Sensex and Nifty 50. With positive momentum from global markets, traders and investors can expect a strong start to the day.
In this article, we provide a comprehensive breakdown of global and domestic market trends, technical analysis of Nifty 50 and Bank Nifty, and key developments in specific stocks. Additionally, we will explore how Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) are shaping market sentiment.
Global Market Overview: Bullish Momentum After Fed’s Rate Cut
The global markets rallied significantly after the US Federal Reserve implemented a 50 basis points rate cut, which was larger than expected. This move has injected optimism into stock markets, leading to strong performances across global indices.
- Dow Jones surged by 522.09 points (+1.26%), crossing the 42,000 mark for the first time, signaling robust investor confidence.
- Nasdaq saw an impressive gain of 440.68 points (+2.51%), driven by a rebound in tech stocks.
- S&P 500 added 95.38 points (+1.70%), further supporting the bullish trend in the US markets.
Asian markets followed Wall Street’s lead, with Japan’s Nikkei and South Korea’s Kospi both posting strong gains. European stocks also rallied, buoyed by optimism surrounding the Fed’s rate cut and a weaker US dollar.
The crude oil market softened slightly due to economic concerns, while gold prices remained stable as investors evaluated the long-term implications of the Federal Reserve’s monetary policy.
Indian Market Sentiment: Record Highs Expected
The Indian stock market is expected to open higher today, with Gift Nifty showing a premium that signals a positive start. Indian indices, including the Sensex and Nifty 50, have already hit record highs in the previous session, and this momentum is expected to continue.
Indian Indices Performance
As of the pre-market session:
- Sensex: 83,184.8 (+236.57 points)
- Nifty 50: 25,415.8 (+38.25 points)
- Nifty Bank: 53,037.6 (+287.20 points)
The rally in Nifty Bank is particularly noteworthy, as the index outperformed other major indices and moved closer to its previous record high. Overall, the sentiment remains bullish for the day ahead, with major global trends supporting the positive outlook.
Technical Analysis – Nifty 50 and Bank Nifty
Nifty 50 Outlook
The Nifty 50 index hit a new record high, crossing 25,600 during the previous session. However, the index later corrected by 200 points due to profit booking. This indicates that while the index is moving higher, there are potential risks of a pullback.
- Immediate support is found at 25,350 and 25,160 levels.
- Resistance levels are identified between 25,540 – 25,580.
If Nifty fails to hold above 25,550 – 25,600, sentiment could shift to sideways or weak. Traders should watch these levels closely to assess the potential for a sustained upward move.
Despite the profit booking, Nifty remains above key moving averages, and positive momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest that the uptrend is still intact.
Bank Nifty Outlook
Bank Nifty continues to outperform the broader market, closing at 53,038 after gaining 287 points. The index has maintained a higher highs-higher lows formation for six consecutive sessions, which is a strong bullish indicator.
- Immediate resistance for Bank Nifty is at 53,350, with potential upside to 53,500 – 53,800.
- On the downside, support levels are found at 52,750 and 52,000.
The index has formed a bullish candlestick pattern, resembling a Shooting Star, which signals potential profit booking at the peak. Traders should be cautious around resistance levels, but overall, the momentum remains positive for the banking sector.
Nifty Options Data: Key Levels to Watch
The Nifty options data offers insights into market sentiment and key support/resistance levels:
Nifty Call Options (Weekly Expiry)
- Maximum open interest is at the 25,400 strike with 2.41 crore contracts, making it a key level to watch.
- Significant call writing was seen at the 25,400 strike, adding 1.84 crore contracts, followed by the 25,500 and 25,800 strikes.
- Unwinding was observed at the 25,300 strike, shedding 10.42 lakh contracts.
Nifty Put Options (Weekly Expiry)
- Maximum open interest on the put side is also at the 25,400 strike with 2.09 crore contracts.
- Strong put writing was observed at the 25,400 strike, with 1.79 crore contracts added, followed by the 25,500 and 25,300 strikes.
The 25,400 level emerges as a key point of interest for both call and put options, which indicates a potential pivot level for the index. Traders should monitor this level closely for any directional breakout.
Key Stocks in Focus
Several stocks are expected to be in the spotlight today, driven by recent news and developments:
Reliance Infrastructure
Reliance Infra plans to issue 12.56 crore equity shares and/or warrants at ₹240 per share through a preferential allotment. The company also plans to raise up to ₹3,000 crore via a Qualified Institutional Placement (QIP). This is a significant capital-raising initiative that will likely keep the stock in focus.
IIFL Finance
The RBI has lifted restrictions on IIFL Finance’s Gold Loan business, allowing the company to resume operations. This is a positive development, as the restrictions had led to a significant decline in the company’s Gold Loan AUM. With these restrictions removed, IIFL Finance is expected to see a recovery in its gold loan business.
NTPC
NTPC has approved an investment of ₹11,130.98 crore in the Darlipali Super Thermal Power Project and ₹9,790.87 crore in the Sipat Super Thermal Power Project. These large-scale investments in thermal power projects demonstrate NTPC’s continued focus on expanding its energy infrastructure.
IDFC Bank
IDFC Bank received RBI approval for the re-appointment of V Vaidyanathan as the MD and CEO for another three years. This extension of leadership is expected to provide stability and continuity for the bank, making it a stock to watch today.
Infosys
Infosys has made an investment of ₹17 crore in GalaxEye Space Solutions, a SpaceTech startup. This investment aligns with Infosys’ strategy to diversify into emerging tech sectors, and it may attract attention from investors looking at tech stocks.
Power Grid Corporation
Power Grid has been declared the successful bidder for the Khavda transmission project in Gujarat. This is a significant win for the company, which continues to expand its portfolio of transmission projects across India.
Other Notable Stocks
- Jyothy Labs: Acquired the laundry service brand Quiclo for ₹70 lakh, marking its entry into the laundry services market in Hyderabad.
- Phoenix Mills: Its subsidiary, Casper Realty, won a bid for two prime city plots in Mohali, worth ₹891 crore.
- HUDCO: The company plans to extend loan assistance worth ₹75,000 crore to ₹1 lakh crore under the PMAY-U 2.0 scheme.
Sectoral Analysis and Outlook
IT Sector
The IT sector, represented by major stocks like Infosys, remains under focus due to emerging investments in SpaceTech and other cutting-edge technologies. While global tech stocks have seen volatility, Indian IT companies are continuing to explore growth avenues.
Banking Sector
The banking sector remains one of the strongest performers in the Indian market, with Bank Nifty leading the charge. IDFC Bank and IIFL Finance are key players to watch, especially with regulatory approvals and capital-raising initiatives in play.
Energy Sector
The energy sector is witnessing significant activity, with NTPC leading the way in power project investments and Power Grid Corporation expanding its transmission projects. These stocks are expected to perform well, given their strategic importance in India’s energy infrastructure.
Market Sentiment – FII/DII Activity
On 19th September 2024, Foreign Institutional Investors (FIIs) were net sellers, with sales amounting to ₹2,547.5 crore. In contrast, Domestic Institutional Investors (DIIs) were net buyers, purchasing ₹2,012.9 crore worth of equities. This divergence between FII and DII activity reflects differing sentiment, with domestic investors showing more confidence in the market.
Put/Call Ratio (PCR) – Sentiment Analysis
The Put/Call Ratio (PCR) provides a snapshot of market sentiment:
- Nifty PCR: 0.7893, indicating a slightly bearish outlook.
- Bank Nifty PCR: 0.922, signaling a more neutral sentiment for the banking sector.
The PCR data suggests that while there is some caution in the broader market, the banking sector remains relatively strong.
Conclusion – Navigating Today’s Market
As we move into the trading session for 20th September 2024, the Indian markets are expected to open higher, driven by a global rally and strong performance from US markets. Key levels to watch for Nifty 50 include 25,400 as a pivotal point, while Bank Nifty is poised for further gains with resistance at 53,350.
Traders and investors should focus on stocks like Reliance Infrastructure, IIFL Finance, and NTPC, which are likely to see significant action based on recent news. Additionally, the divergence between FII and DII activity highlights the need to stay alert to shifts in sentiment.
