The Nifty 50 defied odds during the final hour of Wednesday's trading session. The earlier part of the session was turning out to be as per script, with the index failing to cross the 19,600 mark, even slipping below the 19,500 mark at the day's low.

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However, a sharp intraday recovery in index heavyweights like Reliance Industries and ITC, not only took the Nifty 50 back in the green, but also ensured a close above the 19,600 mark for the first time in six trading sessions. Together, Reliance and ITC contributed to a third of the Nifty 50's recovery and subsequent 60-point surge.

Thursday is likely to be a volatile trading day for the Nifty 50 as it looks to edge higher after entering a resistance range. The index will not only have to contend with the Reserve Bank of India's monetary policy, but also the expiry of its weekly options contracts. With regards to the monetary policy, the street is anticipating a status quo from the Monetary Policy Committee.

The Nifty 50 index is currently placed at the important resistance of the downward sloping trend line around levels of 19,650 - 19,700, said Nagaraj Shetti of HDFC Securities. A decisive move above these levels will negate the bearish chart patterns, he said, adding that such a move could open up upside targets towards the 20,000 mark. Immediate support is seen at 19,460.

Ashwin Ramani of SAMCO Securities observed the formation of a hammer candle on Nifty 50's daily chart, which indicates the buyers' strength. With strong put writing seen at the 19,500 strike, Ramani believes that this level will continue to act as a strong downside support and the options activity at this strike will give cues about the index movement.

Similar to the Nifty 50, the Nifty Bank index also staged a recovery from its intraday low of 44,533, thereby respecting the crucial support level of 44,500. However, despite a 300-point recovery from the day's low, the index ended with losses and yet again below the mark of 45,000. Additionally, the day's high and low for the index were below Tuesday's respective levels.

Kunal Shah of LKP Securities expects a clear and decisive move in the index only after the RBI policy announcement on Thursday. While the 44,500 support level remains intact as evident from today's reversal, 45,150 continues to remain a resistance zone.

Bharat Forge emerged as the stock in the spotlight on Wednesday after it ended 7.5 percent higher post its June quarter earnings. Chairman Baba Kalyani said that the core business won new orders worth Rs 200 crore during the quarter and that the defence order book is increasing steadily. Kalyani also expects the US business to turn around by the March quarter of the current financial year.

“The main issue with Bharat Forge always has been the kind of unpredictability in terms of what happens in their truck orders overseas because that seems to be one of the major drivers. The company is well positioned in India but the international market volatility is something that you will have to get used to. If you look at the company as an auto ancillary play, perhaps it is a lot more volatile, if you look at it as a potential defense play then there is some optionality there but the valuation is something that we will have to get comfortable with,” Anand Tandon, Market Expert told CNBC-TV18.

What are the F&O Cues Indicating?

Nifty 50's August futures shed 0.7 percent or 74,200 shares in Open Interest. They are now trading at a premium of 57.05 points compared to 40.4 points earlier. On the other hand, the Nifty Bank's August futures shed 5.4 percent or 96,435 shares in Open Interest. Nifty 50's Put-Call Ratio is now at 1.17 from 0.98.

India Cements is out of the F&O ban list from Thursday's trading session, while Chambal Fertilisers, Delta Corp, Balrampur Chini, Hindustan Copper and Indiabulls Housing Finance continue to remain in the ban list.

Nifty 50 on the Call side for August 10 expiry:

Call writing for the Nifty 50 has shifted to the higher end post Wednesday's recovery. While the 19,600 and 19,550 call strikes saw Open Interest shedding for Thursday's expiry, addition was seen between 19,700 and the 19,800 strikes.

Nifty 50 on the Put side for August 10 expiry:

Nifty 50's Put strikes between 19,500 and 19,600 have seen Open Interest addition for Thursday's expiry, indicating that the 19,500 mark will continue to act as a key support for the Nifty 50 on the downside.

Lets take a look at the stocks which added fresh long positions on Wednesday, meaning an increase in price and Open Interest:

Here are the stocks which added fresh short positions on Wednesday, meaning an increase in Open Interest but decrease in price:

Here are the stocks which saw short covering on Wednesday, meaning an increase in price but decrease in Open Interest:

Here are the stocks to watch out for ahead of Thursday's trading session:

Zee Entertainment: Revenue and EBITDA margin surpass street expectations. Net profit impacted due to merger related expenses. Ad revenue down 4 percent year-on-year, while subscription revenue up 18 percent year-on-year. The management said in its earnings call that the Mumbai bench of the NCLT has heard the matter and reserved orders for final hearing on August 10. Ad revenue likely to recover in festive season.

Tata Power: Earnings optically higher aided by multiple-one offs, lower coal prices. Net profit aided by an exceptional gain of Rs 235 crore from dilution of stake in Tata Projects. Favourable CERC order for Maithon Power led to additional accruals of Rs 100 crore. Planned nearly Rs 12,000 crore capex for financial year 2024.

PI Industries: Top down beat after pharma revenues consolidated this quarter. Revenue growth of 24 percent aided by Pyraxosulfone sales. Agrochemical revenues increased by 21 percent. Domestic revenues subdued due to delayed monsoon, leading to volume decline of 13 percent. EBITDA growth aided by a favourable product mix and operating leverage.

IRCTC: Internet ticketing revenue and margins decline year-on-year, while catering and rail neer business sees strong recovery. Exceptional loss of Rs 51.9 crore impacts net profit. Exceptional loss on account of provisions made for the difference between Tejas train charges made by the Ministry of Railways vs charges in previous years.

Bata: Revenue growth of only 2 percent during the quarter, while EBITDA margin declines by 90 basis points. Company said demand remains subdued in the footwear sector. Overall average selling price increased by 3 percent from last year.

Max Financial Services: VNB margin in-line with estimate of 22.2 percent. Margin increased by 110 basis points from the same quarter last year. Annuity grew by 260 percent, in-line with the company's focus on retirement.

Sula Vineyards: Revenue growth of 21 percent known with the business update. Gross margin sees pressure of 110 basis points to 73.4 percent from 74.5 percent. EBITDA margin expands by 30 basis points year-on-year. No provision created for excise duty demand.

Granules India: Revenue down 3 percent while net profit declines by 62 percent year-on-year. Company says IT incident impacted numbers but they are lower than estimates. Management said short-to-medium-term growth trajectory intact. Net debt for the quarter stood at Rs 856.9 crore. EBITDA margin of 17 percent is the lowest in nearly two years.

Suzlon: Launches QIP issue to raise Rs 2,000 crore. Base size of Rs 1,500 crore with a greenshoe option of another Rs 500 crore. Floor price of Rs 18.44 per share. Proceeds to be used for debt repayment and for general corporate purposes.

Eicher Motors: Amazon commits to acquire 1,000 electric trucks from the company. 50 trucks to be purchased by Amazon in the first phase.

What Are Global Cues Indicating?

Asian equities have opened lower ahead of the July Consumer Price Index data from the US later this evening. Inflation is expected to come in at 3.3 percent, slightly higher than 3 percent in June.

The Nikkei 225 has opened 0.3 percent lower, while the Topix is down 0.2 percent. Japan's wholesale inflation slowed to 3.6 percent in July from 4.3 percent in June. The Kospi in South Korea is down 0.4 percent while the Kosdaq has shed 0.7 percent in early trading.

Hang Seng futures are pointing towards a negative open.

Wall Street sold off overnight with all three major indices ending lower. The Nasdaq ended with cuts of 1.2 percent, the Dow Jones lost 0.5 percent, while the S&P 500 declined by 0.7 percent.

Foreign investors were net buyers in the cash market on Wednesday for the first time in ten trading sessions. On the other hand, domestic investors turned net sellers.

Ruchit Jain of 5paisa.com said that the Nifty 50 can resume its uptrend towards its all-time high if it manages to surpass its crucial resistance zone of 19,650 - 19,700. On the downside, 19,500 - 19,400 will now act as an important support range.

The bearish gap of 19,678 - 19,705 for the Nifty 50 will act as an immediate resistance for the Nifty 50, said Osho Krishnan of Angel One. Surpassing this level will take the Nifty 50 towards the next resistance around 19,800 - 19,850. On the downside, 19,500 is a key support, followed by 19,440 - 19,380.

First Published:Aug 9, 2023 10:34 PM IST