Experts See Nifty Maintaining Support at 24,840, With Potential to Climb to 25,150-25,350
MUMBAI: Indian stock markets opened with strong positive momentum on Monday, buoyed by signals of a potential interest rate cut by the US central bank. The positive global sentiment, primarily driven by the prospect of a more accommodative monetary policy in the United States, fueled a rally across Indian benchmarks.
The Sensex began the week on a high note, gaining 251.41 points to reach 81,558. The Nifty 50 also traded in the green, rising by 71 points to open at 24,941. The rally was spearheaded by significant gains in the IT sector, which investors flocked to. The Nifty IT index surged by 1.77%, while the Nifty Metal index also saw a healthy increase of 0.88%. Most other sectoral indices also traded with modest gains. Among the top performers on the Nifty were Infosys, Tech Mahindra, TCS, Bajaj Finance, Hindalco, and NTPC. Conversely, ICICI Bank, Apollo Hospitals, and Maruti Suzuki were among the top losers.
Market Analysis and Outlook
According to technical analysts, the Nifty is currently holding a short-term support level around 24,840, which aligns with its 50-day Exponential Moving Average (EMA). Amrita Shinde of Choice Equity Broking stated that if the Nifty breaks below 24,840, it could decline to 24,650 and potentially test the critical support zone at 24,500.
Similarly, Vikram Kasat, Head of Advisory at PL Capital, noted that selling pressure might emerge at the 24,950 to 25,000 level. However, he identified the 24,600 to 24,673 range as a strong support area for the index.
Positive Global Cues Fueling the Rally
The positive sentiment in the Indian market mirrors a global trend, which began after the comments by US Federal Reserve Chairman Powell at the Jackson Hole symposium last week. Powell’s remarks indicated that a US interest rate cut could be a possibility in the near future, which boosted investor confidence. This has also led to positive sentiment regarding fresh investments from Foreign Portfolio Investors (FPIs) in the Indian market.
The bullish trend was visible across Asia-Pacific markets on Monday. China’s Shanghai index rose by 0.59%, Japan’s Nikkei by 0.68%, Hong Kong’s Hang Seng by 1.93%, and South Korea’s Kospi by 0.89%. Despite this, on August 22, Foreign Institutional Investors (FIIs) were net sellers of Indian equities, offloading shares worth Rs 1,622.52 crore, while Domestic Institutional Investors (DIIs) provided support by buying shares worth Rs 329.25 crore.
