Back home, apart from corporate earnings the focus will also shift towards the upcoming Union Budget. Finance Minister Nirmala Sitharaman is scheduled to present the first Budget of the Modi 3.0 on July 23, 2024. The Parliament’s Budget Session will take place from July 22 to August 12.

Global mood

The US market rallied on Friday as the jobs data raised hopes of a rate cut by the US Federal Reserve. According to the CME Group’s FedWatch Tool, the market now sees a 77.9 per cent chance of a Fed rate cut by in the September policy meeting.

On Friday, NASDAQ zoomed 0.9 per cent, the S&P 500 galloped 0.5 per cent, while Dow Jones added 0.2 per cent.

The US 10-year bond yield eased to 4.30 per cent. Among commodities, Gold futures bounced back to $2,395 per ounce, while Brent Crude Oil futures traded firmly around $86.50 per barrel.

Markets, in the Asia-Pacific region, exhibited a weak trend this morning. The Australian stock indexes – the S&P ASX 200 and All Ordinaries were down up to 0.4 per cent each. Japan’s Nikkei slipped 0.3 per cent, and Malaysia’s Kospi declined 0.1 per cent. Taiwan, however, was up 0.1 per cent. 

FII, DII trading activity

Foreign institutional investors (FIIs) were net buyers in the cash segment for the third day in a row on Friday. They net purchased stocks worth Rs 1,241 crore on July 05. On the other hand, domestic institutional investors (DIIs) net sold shares to the tune of Rs 1,651 crore; marking the third straight day of net selling.

In the derivatives segment, FIIs net sold 7,823 contracts in index futures worth Rs 496.24 crore on lower volumes. FIIs net sold 7,356 contracts in Nifty futures, 1,272 contracts in Bank Nifty; while net bought 991 MidCap Nifty futures contracts on Friday.

FIIs index long-short ratio remained stretched at 5.2:1; meaning more than 5 long index bets for every single short position in index futures. The FIIs net index longs stood at 83.85 per cent, while shorts at 16.15 per cent.

On the other hand, DIIs and retail investors index long-short ratio stood around 0.5:1; meaning nearly 2 index short positions for every long trade. 

Trading strategy for Monday, July 08 – Should you be a buyer or seller in the Nifty, Bank Nifty today? Here’s what market experts have to say:

Osho Krishan, Senior Analyst – Technical & Derivatives, Angel One

The collective involvement of mid-small caps and index heavyweights has significantly boosted market sentiment, laying a strong foundation for positive market dynamics.

The bulls have shrugged off overbought conditions and propelled major key indices to unprecedented highs. Despite the Nifty remaining technically stretched, there are no indications of the vertical rally losing steam. It is crucial to approach this scenario with caution and avoid being swayed by the prevailing trend.

As far as levels are concerned, 24200 is likely to provide a cushion for any short-term blips, followed by robust support at the 24,000-mark for the upcoming week. On the higher end, we anticipate 24,400-24,500 to provide resilience for the index in the comparable period.

Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities

Strong put writing was observed at the 24,200 & 24,300 Strike in the Nifty. The NSE benchmark index broke its higher high pattern on the daily chart but eventually closed above the previous day’s low.

So, we are yet to see a lower close on the daily chart, which is a positive sign. The put writers (Bulls) have strengthened their position at the 24,300 Strike in the Nifty. The option activity at the 24,300 strike will provide cues about Nifty’s future direction in coming session.

The Bank Nifty has formed a doji like candle on the daily chart. The put writers (1.23 lakh contracts) lead the call writers (1.09 lakh contracts) at the 52,500 Strike and the option activity at this strike will provide cues about Bank Nifty’s upcoming direction.

Om Mehra, Technical Analyst, SAMCO Securities

The sharp rise on the Nifty in the final hours indicated that the bulls magnificently prevented a breakdown of the rising trendline, with support at 24,200 on the hourly chart. The 23.6 per cent Fibonacci retracement level at 24,150 will act as immediate support. Surpassing the all-time high of 24,401 would push the index toward the 24,520-24,550 range.

The Bank Nifty closed below its 9-day moving average (DMA). The daily RSI has slipped to 62 from 67 levels. A breach of the 51,990 level could push the index lower in the short term; however, stronger support remains at 51,700.

The Bank Nifty might consolidate in the coming days on the other hand, if it surpasses 53,100, it would likely be an indication of resumption of the uptrend in the index.

Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates

Technically, the Nifty managed to defend the 24,200 support level on a closing basis, indicating strength. As long as the index holds this support, it may attempt to test the levels of 24,500-24,600.

The Bank Nifty, from a technical standpoint, is consolidating in the band of 52,000-53,200. Either side breakout will set the further direction for the index.

Rupak De, Senior Technical Analyst, LKP Securities

On the Nifty, the 24200 level witnessed heavy writing on the put side, marking a short-term support for the NSE benchmark index. The last-hour spike, on Friday, the resilience of the bullish trend. This strength is likely to prevail in the market until it breaks below 24200 decisively. A fall below 24,200 might induce profit booking in the market.

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities

The Bank Nifty is currently stuck in a range with resistance visible at 53,000-53,200, where aggressive call writing is observed, and support at the 52,300-52,100 zone. The index needs to break decisively on either side for trending moves. However, within the range, the view remains bullish, and declines should be utilized to buy the index.

Stocks in F&O ban period

A total of six stocks are in futures & options (F&O) ban period on Monday – Aditya Birla Fashion Retail, Bandhan Bank, GNFC, Hindustan Copper, India Cements and Piramal Enterprises.

Primary market update

Ambey Laboratories Initial Public Offer (IPO) to close on Monday. The SME issue has so far garnered 36.39 times subscription on the NSE.

Two other SME IPOs are also open for subscription – Ganesh Green Bharat and Effwa Infra & Research. The former saw up to 15.72 times subscription, while the latter 11.43 times on Day 1 of the offer period. Both the issues will close tomorrow, July 09.