Market Holds Support; Signs of Recovery Emerge

As mentioned yesterday, the Nifty 50 index held key support in the 24,100-24,150 range and advanced above 24,450, driven by a strong performance from the financial sector. The Headline Index closed up 0.52%, or 127 points, as the sectoral Bank Nifty Index gained 2.07%. Broader market sentiment shifted positive toward the close, with an A/D ratio of 1,528/971.

The PSU Banks segment saw another day of strong buying, with market leader State Bank of India rising over 5%. Indian Bank also attracted further buying interest, gaining 5.36% after a double-digit rise in the previous session. Increased value buying in PSU Banks suggests that "hot money" is moving toward undervalued stocks, as the market has seen sharp sell-offs in high-valuation stocks from a P/E and P/B perspective.

In defensive segments, Pharma, FMCG, and IT experienced moderate selling, with Nifty Pharma down 1.12%, IT down 0.41%, and FMCG slipping a marginal 0.08%.

In commodities, both Gold and Silver are near all-time highs on the Multi Commodity Exchange today, coinciding with Dhanteras, when people traditionally buy precious metals. Gold prices on MCX were quoted at 78,750, while Silver was near the 98,000 mark after recently touching the 1-lakh price level. Crude oil prices were flat at 5,736 per barrel after a sharp decline in the previous session.

In corporate earnings, Maruti Suzuki’s Q2 report showed a net profit of ₹3,069 crore, below the market estimate of ₹3,779 crore. The company noted that ongoing festive retail sales are expected to reach 3 lakh units, outpacing wholesale figures. Pharma major Cipla posted a 15.2% increase in net profit for Q2 at ₹1,303 crore, with revenue up by 5.6% at ₹7,051 crore.

Index Outlook

• NIFTY: The Nifty 50 Index held the key 24,100-24,150 support range and is likely to advance toward the 24,600-24,650 range if it remains above 24,350-24,400 intraday tomorrow. Strategy: Buy on dips with a closing stop loss below 24,150.

• BANK NIFTY: As expected, Bank Nifty advanced after breaking the 51,600-51,650 range, reaching an intraday high of 52,354. The index has moderate resistance at the 52,580-52,600 range and could reach 53,000 on a decisive breakout. Tomorrow’s outlook: Buy on dips.

• NIFTY MIDCAP Select: The Nifty Midcap Select Index has support at 12,400 and then 12,310, with resistance in the 12,600-12,650 range. Strategy: Buy on dips with a closing stop loss below 12,310, targeting 12,600-12,650.

Prepared by Bitupan Majumdar, SEBI-registered research analyst (INH30006962). Please consult your financial advisor before making investment decisions.

Also Read: Moderate Recovery in Nifty Driven by Short Covering; Cautious Outlook Ahead