Domestic markets are expected to sustain the momentum on August 1 as well. Despite mixed global cues, analysts expect a positive beginning. The US stocks on Wednesday closed on a high note despite the US Fed keeping the rate unchanged. The Federal Open Market Committee voted unanimously to leave the benchmark rate unchanged in the target range of 5.25%-5.5%, a more than two-decade high, for the eighth straight meeting.
Gift Nifty at 25,097 indicates that Nifty might cross the much-awaited 25,000-mark. As Nifty August futures on Wednesday closed at 25,013, Nifty is expected to open with a gain of about 60-70 points. On Wednesday Nifty index closed at 24,951.
Ruchit Jain, Lead Research, 5paisa.com, said: In last three trading sessions, Nifty has consolidated within a narrow range as market participants seem to be waiting for the outcome of the Fed’s decision on interest rates in the US and the global markets reaction on the same. “However, the index has not breached any support in this consolidation, which is a good sign. The immediate support for Nifty is placed around 24750 followed by 24600. Only if the index breaks these supports then we could see some correction, else the uptrend shall continue. The 25,000-mark has not been breached yet and a breakout above the same could lead to an up move towards 25330,” he added.
However, Asian stocks are mixed with Tokyo stocks fell more than three per cent on Thursday, weighed by a surge in the yen after the Bank of Japan hiked interest rates. Hong Kong, Singapore, Chinese markets, too, are down in early deal even as Australian stocks edged up.
Meanwhile, fiscal and core output gave mixed signal.
Aditi Nayar, Chief Economist, Head of Research and Outreach at ICRA Ltd, said: ”The Government of India’s (GoI’s) fiscal deficit shrunk to Rs. 1.4 trillion or 8.1% of the FY2025 BE in April-June FY2025, from Rs. 4.5 trillion in Q1 FY2024, led by a sharp compression in capital expenditure during the Election months, as well as the substantial dividend received from the RBI. In Q1 FY2025, the net tax revenues rose by 27%, non-tax revenues expanded by 81% boosted by the RBI dividend, amidst a mild 2% growth in revenue expenditure, and a 35% YoY contraction in capex, she added.
“The core sector expansion slid to a 20-month low of 4.0% in June 2024, led by a moderation in growth or deepening contraction in five of the eight constituents, barring coal, fertilizers and cement, compared to May 2024. “With the onset of the monsoon, electricity growth reverted back to single digits after two months, while remaining healthy at 7.7%. With the dip in the core sector growth, we expect the IIP to post a rise of 3.5-5.0% in June 2024,” she added.
Meanwhile, trading in the derivative segment, especially the option market, indicates a mild bearish signal, says analysts.
“Recent activity in the options market hints at a slight increase in bearish sentiment, with a greater focus on writing call options compared to puts. This shift at all-time high levels serves as a cautionary sign, especially with the FOMC outcome looming. Significant open interest is noted at the 25,200 call (82.24 lakh) and 24,500 put (95.75 lakh) options, with notable trading interest in the 24,800-24,900 puts and 25,000-25,200 calls. The Nifty Put-Call Ratio (PCR) has slightly decreased from 1.09 on Tuesday to 1.03, suggesting a sideways to bullish outlook as the index holds above 24,800. The max pain level is positioned at 24,850, anchoring the index’s movement,” saidDhupesh Dhameja, Technical Analyst, SAMCO Securities
The India VIX experienced a minor intraday increase of 2.87 per cent, settling at 13.85, up from Tuesday’s 12.88. This indicates limited volatility in the market, as the VIX remains range-bound, he further said.
