Markets awaiting global cues for next direction

On the back of renewed concerns over poor monsoon, RBI meeting minutes’ concern over rising inflation, rising US bond yields on the eve of US Fed Chairman Jerome Powell’s speech at the Jackson Hole and mixed global cues; Indian equity markets ended flat and extended profit booking for fifth consecutive week. The BSE Sensex was down 0.09 per cent or 62.15 points to close at 64,886.51 points, andNSE Nifty fell 0.22 per cent or 44.35 points to finish at 19,265.80 points. However, broader indices, BSE Mid-cap and BSE Small-cap outperformed and touched fresh highs during the week ended and added 1.5 per cent and 2 per cent respectively.

Index heavyweight Reliance Industries’ 46th annual general meeting (AGM) is expected to set the tone for the markets in the coming week, with investors eyeing a slew of major announcements. Keep track of the Supreme Court’s hearing on Tuesday in the Adani-Hindenburg case. Volatility is expected to be hvigh in the market with the August derivative series set for its expiry, weak global sentiment and domestic events., according to experts.

F&O / SECTOR WATCH

Amidst high volatility and consistent selling pressure, the derivative segment witnessed heightened activity in select stock futures. Both the NSE Nifty and the Bank Nifty indices concluded with marginal gains with mild outperformance from the Bank Nifty. The Options data indicates maximum monthly Call open interest (OI) at 19,500 strike, followed by 19,300 strike. On the Put side, the maximum open interest is at 19,000 strike, followed by 19,200 strike. In Bank Nifty, the highest open interest was observed at 45,000 strike, followed by 44,500 strike. On the put side, the highest call open interest was noted at 44,000 strike. Moving to implied volatility (IV), call options for Nifty settled at 10.04 per cent, while put options concluded at 11.59 per cent. The Nifty VIX, a measure of market volatility, concluded the week at 11.70 per cent. The Put-Call Ratio Open Interest (PCR OI), stood at 0.82. Traders are advised to monitor the India VIX closely, as it is trading near to the support level. A rebound in India VIX could be expected in the coming weeks. Nifty’s trading range will be between the psychological level of 19,000 and 19,500. Adopt a ‘sell on rallies’ approach until the Nifty surpasses the 19,500 level. True to predictions, on the back of strong dollar, IT biggies continued to witness strong delivery buying. Contrarian buying suggested in the sector for good medium term gains. Stay invested and adds in the present weakness for steady gains in DLF, Oberoi Realty and Godrej Properties. Stock futures looking good are Axis Bank, Astral, Birla Soft, Dalmia Bharat, Mphasis, Laurus Labs and NTPC. Stock futures looking weak are ABB, Bajaj Auto, Exide Inds, MGL, JSW Steel, HDFC AMC, ONGC and RIL.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)