Nifty Trades Below 19500, Sensex Below 65300; Media, Metal Stocks Tank

The benchmark equity indices posted a tepid opening on Monday. The NSE Nifty 50 opened at 19,521.60 down 0.10%, the BSE Sensex opened at 65,419.02 up 21.4 points.

The broader indices opened largely in green. The Bank Nifty index opened at 43,822.70, up 99.65 points. Among the other sectoral indices Auto, FMCG, IT, Pharma and Realty opened in red, while Financial Services, Media, Metal, PSU Bank, Private Bank opened in the positive territory on Monday.

Market Outlook

“In the past week, the Nifty index closed at 19,513, marking a downbeat performance influenced by surging US Treasury yields and lackluster initial earnings reports from companies like INFY, BAJAJ FINANCE, and TCS. HDFC BANK’s results also did little to improve sentiment, while geopolitical tensions led to reduced investor exposure. The 2-year and 10-year Treasury notes approached levels not seen since 2006 and 2007, with the 10-year yield nearly reaching the 5% mark, last witnessed in July 2007.

However, hopes of sentiment improvement rest on the positive Q2 results from ICICI Bank, Kotak Bank, and RBL Bank, driven by lower provisions and enhanced asset quality. The technical landscape for Nifty and Bank Nifty is challenging, with Nifty trading below the rising trendline from March 2023 and downside risk at the October low.

Bank Nifty is also at risk of breaking the trendline from June 2022, with potential downside at 41500. Despite this, optimism remains for TATA Motors, DIXON Technologies, Zomato, and Coal India, offering trading opportunities. Zomato stands out as a stock to consider, with long positions at the current price (CMP 113) targeting 121/143 and more aggressive 1-year targets at 175. Nifty’s options data suggests a trading range of 18900-19700, with 20000 as a key resistance zone. The Volatility Index stands at 10.81.”