Last Week in Nifty

Another week with bulls and bears unable to move the market to either side. After opening at 15,856 on Monday, Nifty made 4 red candles in the 5 trading days and even tested 15,500. 

Support from DIIs continued to be strong and Nifty ended the week at 15,763, down nearly 0.6% from Monday’s opening. 

Metals are back into the bullish mode with policy changes from the Chinese government, increasing tariffs on exports. IT stocks also saw buying with Infy, TechM, Coforge and many more hitting fresh 52-week highs. TechM jumped 7% on Friday after the results.

IDFC First Bank announced Rs 630 crores loss due to higher provisions. Bandhan Bank reported lower profits in Q1.

Auto stocks, Pharma, FMCG and Banks saw selling pressure in the week. Realty remained somewhat stable.

Reliance was bearish throughout the week, moving down on all 5-days after its results on Monday. Looking for a trendline breakout in the week, as the stock has reached its more than 2-month lows.

Foreign institutional investors sold heavily in July in the cash market for Rs 23,193 crores. This was the highest since March 2020, the month of the Covid crash. Out of this, more than Rs 10,000 crores was from last week alone.

But despite this, Nifty 50 has not fallen at all in July as Domestic Institutional Investors bought for Rs 18,393 crores this month, the highest since March 2020.

Week Ahead in Nifty

Markets this week are set to open with reaction to results from Nifty 50 companies UPL and Britannia. Bandhan Bank had also announced lower profits as provisions for bad loans increased.

There will also be announcements of auto sales data in the first days of the week. PMI numbers will be watched by investors this week, as last month’s data was below estimates due to the second wave and lockdowns.

Even on the monthly expiry, Nifty showed net consolidation even with the volatility. Nifty continues to consolidate between 15,500 and 16,000.

More Nifty 50 are set to report Q1 earnings including HDFC, Bharti Airtel, SBI, Titan, M&M, Cipla, Adani Ports, Hindalco Industries and Divis Labs. National Aluminium’s and Hindalco’s results will be watched by traders to predict Nifty Metal movements.

Berger Paints, Indigo Paints, JK Tyre, Tata Consumer, Tata Power, ZEEL, Apollo Tyres, Indiabulls Housing, BEML and Adani Enterprises are some other stocks announcing results.

4 fresh IPOs are coming this week – Devyani International, Windlas Biotech, Exxaro Tiles and Krsnaa Diagnostics. Devyani is likely to see the highest investor interest as it is the operator of Pizza Hut and KFC in India. Glenmark LifeSciences will list this week after a successful IPO.

The highest call OI stands at 15,900. Highest Put OI is also at a very aggressive 15,700 level. But there are currently many more call option contracts currently active in the market.

Nifty has closed below the 15,800 and Bank Nifty also was weak and closed below the 35,000 level. Even with intraday fall on Wednesday, Nifty has failed to close below 15,630. More weakness will be seen if this happens. The next major support will be at 15,450, with many more smaller levels in between.

On the other side, a close above 16,000 will confirm Nifty’s bullishness and push it higher to 16,200 and above.

Bank Nifty also has good support at 34,000, if closing below may result in bearishness.

Global markets including S&P 500 and NASDAQ closed slightly in the red on Friday night. We will be adding how the Futures of these global markets and Asian markets are performing in our pre-market report, tomorrow morning

Last week, we talked about how Nifty was in a mood to consolidate and more or less was what we saw. Nifty broke the 15,630 support once again but domestic institutions supported and pushed the index higher. Clearly, DIIs are supporting the market even when FIIs sell. Whose money will dry out first is the question.

I feel that the results from SBI and HDFC along with Auto Sales data and first week’s trend will be a deciding factor for Nifty this month.

What do you think will happen this week? Will FIIs return as net buyers in August after 4 consecutive months of selling? Or will DIIs finally run out of money to invest in the market? Let us know in the comments section of the marketfeed app.