Markets remained volatile for yet another week but managed to end in the green. Eventually, both the benchmark indices, the Nifty 50 and BSE Sensex, settled with modest gains to close at 19,751.05 and 66,282.74 levels, respectively. On a weekly basis, Nifty advanced for the second week in a row. Realty and Auto sectors gained the most while IT and banks declined the most. Besides, the positive tone on broader indices further eased the pressure.

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For this week, investors will closely monitor the Israel war situation, crude oil prices, September quarter (Q3FY24) earnings, and FII/DII trading activities. The market's initial reaction on the new week will be influenced by the sharp surge in crude oil prices over the weekend.

Furthermore, a slew of earnings reports by heavyweights expected this week from Wipro, Ultratech Cement, JSW Steel, Hindustan Zinc, Bajaj Finance, among others, will significantly impact market direction.

What Are The Experts Saying?

"We expect markets to remain range-bound for next week, as they will take further cues from a surge in crude oil prices, the Israel conflict, banks' quarterly results , as banks NIM (net interest margin} % will remain in focus," said Arvinder Singh Nanda, Senior Vice President at Master Capital Services.

"Apart from earnings, global cues would continue to play a critical role in setting the direction of our markets. Among the key indices, the US benchmark, the Dow Jones Industrial Average (DJIA), tested a hurdle at 33,800 and couldn’t surpass it. We need a decisive break above 34,200 for a steady recovery else the decline would resume," said Ajit Mishra, SVP - Technical Research at Religare Broking.

"Finally, we witnessed some optimism during the week that went by in our domestic markets. Earlier, before this week the benchmark indices remained under pressure but this time the markets managed to display some strength despite the uncertain global cues. The index initially sneaked below 19500 mark but as the week progressed it managed to retest 19800 and eventually close near 19750 with gains of around half a percent," said Mehul Kothari of Anand Rathi.

What Do The Nifty 50 Charts Indicate?

Nifty is currently hovering around the short term average (20 EMA) but facing stiff resistance due to lack of participation from two key sectors viz. IT and banking. "We doubt that it could make a meaningful recovery without their contribution as they combined hold nearly 50% weight in the index. At the same time, other sectors like auto, energy, pharma, realty and metal are showing resilience so traders should align their trades accordingly," Mishra said.

Buy the dip is likely to remain in focus as prices managed to trade above the key psychological mark of 19500 if it manages to close above 19900 then we can expect a new high, Nanda said. "Conversely, a decisive fall below 19300 will be seen as a short-term trend reversal which can lead Nifty towards 19000-18800."

Santosh Meena of Swastika Investmart said that Nifty is currently trading within a defined range, with the upside capped in the 19800–20000 zone and the downside protected in the 19450–19250 zone. "Given the proximity to the upper end of this range, there is a looming risk of a downward movement towards the lower end in the coming week. A discernible trend is likely to materialize following a decisive move beyond the 19300–20000 zone."

Will Bank Nifty manage to breach the 45,000-mark?

In the Bank Nifty index, the ongoing battle between the bulls and bears continued. Resistance is established at the 44,700 mark, while the support lies at 44,000.

The overall market sentiment remains bullish as long as the critical support at 44,000 holds, and a breach below this level, confirmed by a closing basis, may lead to renewed selling pressure, said Kunal Shah, Senior Technical and Derivative analyst at LKP Securities. On the upside, a substantial resistance level is placed at 45,000, and a breakout beyond this point is likely to trigger significant short-covering, Shah said.

Meena said that the 200-day moving average (DMA) at 43000 will be a crucial support level in the event of any market weakness. "A substantial short-covering rally is anticipated only if Bank Nifty manages to breach the 45,000 mark," he said.

"We are expecting prices to drift with a sideways to higher tendency. With the validation of its recent swing low of 44000, buying can be initiated from lower levels near 44100," Nanda said.

What Are The F&O Cues Indicating?

Nifty 50's October futures shed 3.7% or 3.56 lakh shares in Open Interest. They are now trading at a discount of 9 points compared to a premium of 49.5 points earlier. On the other hand, Nifty Bank's October futures added 10.4% or 2.2 lakh shares in Open Interest. Nifty 50's Put-Call Ratio stood at 1.14 from 1.21 earlier.

SAIL has entered the F&O ban list from today's session, joining the likes of BHEL, Delta Corp, Sun TV, Balrampur Chini, Hindustan Copper, India Cements, Manappuram Finance, Indiabulls Housing Finance, PNB and L&T Finance Holdings, that are already part of the list.

Nifty 50 on the Call side for October 19 Expiry:

For this Thursday's weekly options expiry, the Nifty 50 call strikes between 19,700 and 19,900 have seen Open Interest addition. The 19,700 strike has seen the highest Open Interest addition.

Nifty 50 on the Put side for October 19 expiry:

For the put side, the Nifty 50 strikes between 19,500 and 19,700 have seen Open Interest addition, with the 19,700 strike seeing the highest addition as well.

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

Lets take a look at the stocks that added fresh short positions on Friday, meaning a decrease in price but increase in Open Interest:

Some stocks witnessed short-covering on Friday, meaning an increase in price but decline in Open Interest:

Stocks to watch out for ahead of Monday's session:

Tata Motors: To sell 9.9% stake in Tata Technologies to TPG at a valuation of Rs 16,000 crore ahead of its IPO.

TCS: Concludes investigation pertaining to the Resource Management function. Action has been taken against all 19 employees wherein 16 have been separated from the company for Code of Conduct violation, while three have been removed from the Resource Management function. Additionally, six vendor entities, their owners, affiliates have also been debarred from doing any business with TCS.

HDFC Bank & Federal Bank: To report September quarter results today.

Delta Corp gets another tax payment notice from GST intelligence. Total tax payment notice now stands at Rs 23,206 crore (Rs 16,822 crore earlier + today’s Rs 6,384 crore). Today’s notice is for Delta Corp’s subsidiary Deltatech Gaming.

Avenue Supermarts: Net profit falls 9.1% at Rs 623.4 crore in Q2 as against Rs 685.7 crore year-on-year. Revenue surged 18.7% to Rs 12,624.4 crore versus Rs 10,638.3 crore YoY.

Adani Enterprises: The company said that the Ministry Of Corporate Affairs has initiated an investigation on accounts of its two Mumbai airports, Mumbai International Airport and Navi Mumbai International Airport. It further said that documents being sought by MCA are pertaining to the period starting from 2017-18 to 2021-22.

NHPC: NHPC expects loss or damage of Rs 788 crore caused by flash floods at Teesta basin, of which material damage is at Rs 297 crore and business loss of Rs 491 crore. Assets and business interruption loss of power station is insured under mega insurance policy.

Persistent Systems: The company has appointed Ayon Banerjee as the company’s chief strategy and growth officer w.e.f. October 13, 2023.

First Published:Oct 16, 2023 1:14 AM IST