The September Futures & Options (F&O) series for the Nifty can be divided into two distinct halves. In the first 9 trading sessions, the index showed minimal movement and by September 11, it had dropped over 250 points for the series.
However, the following 11 sessions saw a sharp reversal, with the Nifty surging 1,300 points, leading to a strong close for the month. So far this week, the Nifty has risen by 1.6% and is on track for its third consecutive weekly gain. The index has now posted gains in six of the last seven weeks.
Nifty 50 Index Reshuffle Set for Friday
Friday’s post-closing trading session will see a reshuffle of the Nifty 50 index. Trent and Bharat Electronics (BEL) are set to join, replacing LTIMindtree and Divis Laboratories. The rejig will also bring changes to the Nifty Bank and Nifty 500 indices, with several stocks witnessing adjustments in weightage.
Banking Heavyweights Drive the Rally
HDFC Bank and ICICI Bank, two of the largest constituents in the Nifty, played a pivotal role in Thursday’s gains. The Nifty Bank index has been a key catalyst, driving the Nifty’s upward momentum as the market prepares for the October series. The six-day winning streak has added more than 800 points to the Nifty index.
Auto and Metal Stocks Provide Support
Maruti Suzuki, India’s largest passenger carmaker, led the charge among auto stocks, with its market capitalization now surpassing Rs 4 lakh crore. In addition to the auto sector, metal stocks extended their rally on expectations of further stimulus in China, contributing to Thursday’s market strength.
US Dollar
The US Dollar Index (DXY), which measures the value of the dollar against a basket of six foreign currencies, traded down by 0.14% at 100.81.
Crude Oil
WTI crude prices are trading at $67.37 down by 3.33%, while Brent crude prices are trading at $71.20 down by 3.08%, on Thursday evening.
FII, DII Data
Foreign institutional investors (FII) mopped shares worth Rs 629.96 crore, while domestic institutional investors (DII) bought shares worth Rs 2,405.12 crore on September 26, 2024, according to the provisional data available on the NSE.
Technical View on Nifty
Commenting on the Technical outlook of Nifty Praveen Dwarakanath, Vice President of Hedged.in said that Nifty has given a breakout above the psychological level of 26000 and is also walking on the Upper Bollinger band, a strong sign of bullishness. Today’s upside move can also be due to the short covering in the sold calls of today’s expiry.
“The Options writer’s data for October’s expiry shows increased put writing at 26000 levels, indicating a further rally from the current levels. Immediate support for Nifty is now at 26000 levels, while Nifty can test 26500 levels soon,” added Dwarakanath.
Whereas Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas said that Nifty opened on a flat note and consolidated during the first half. A late surge helped the Nifty to close in the green up ~182 points. On the daily charts we can observe that the Nifty is heading towards the upper end of the rising channel 26560.
“Divergence on the momentum indicator suggests that caution should be maintained on the longs. Until there is evidence of weakness on the price front, we shall continue to ride the uptrend with a trailing stop-loss mechanism which should be maintained with 26000,” added Gedia
Bank Nifty Outlook
Commenting on Bank Nifty outlook Riyank Arora Technical Analyst at Mehta equities said that the Bank Nifty is showing signs of a potential breakout above the key resistance level of 54,200. Traders should look to buy on a confirmed breakout with a strict stop loss set at 54,000 to manage risk effectively. The immediate targets are Rs 54,500 and Rs 54,600, aligning with the ongoing bullish momentum. The index continues to display strength, and the breakout could signal further upside in the near term.
“Bank Nifty started the day on a positive note, witnessed heavy buying interest and as a result registered a new lifetime high of 54,467.35 levels and witnessed some profit booking. As a result, Bank nifty index settled the day on a positive note at 54,375. Technically, the index is oscillating within a rising channel. The index has also witnessed a fresh rounding bottom pattern breakout,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.
However Yedve also added that index might face an immediate hurdle near 54500 levels and if sustains above it then it might test the levels of 55,000-55,500, where the upper trend line resistance of the channel pattern is placed. On the downside, the breakout level near 53,350 and the Psychological level of 53,000 will serve as support points. Thus, buy on dips strategy should be adopted in Bank Nifty for the short term.
Top Stocks to Watch on September 27
UNO Minda: The company has acquired a 49% stake in Minda Nabtesco Automotive from Nabtesco Automotive Corporation for Rs 13 million. Following this acquisition, Minda Nabtesco Automotive Private Limited (MNAPL) has now become an associate company of UNO Minda.
RVNL: Rail Vikas Nigam Limited (RVNL) has signed a Memorandum of Understanding (MoU) with Engineers India Ltd. to strengthen collaboration on infrastructure projects. The agreement aims to explore new business opportunities and identify projects across the globe.
Reliance Infra: The Company has announced that its board of directors will meet on October 1 to consider and approve plans for raising long-term resources. The meeting will focus on exploring options to strengthen the company’s financial position through potential fundraising initiatives.
Trent: The Tata Group retail giant that has seen its value triple over the past year, will be one of two new companies added to the Nifty 50 index. Among the top 10 names in the index, Trent is expected to attract the highest inflows, with nearly $500 million projected, according to a note from Nuvama Alternative. This inclusion further highlights the company’s remarkable growth trajectory.
Union Bank of India: The PSU bank announced that the Joint Forum of the All India Union Bank Officers’ Federation (AIUBOF) and the All India Union Bank Employees’ Association (AIUBEA) has agreed to withdraw its planned strike. However, a separate joint forum comprising AIUBEF, AIUBSF, UBSA, and UBIEU in Delhi has called for a strike on September 27. The bank cautioned that in the event of this strike, the functioning of its branches in certain locations may be impacted.
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