Nifty surges above 19,400 as stock market closes on a high note

Mumbai, Nov 7: In a turnaround from the initial downturn, the stock market managed to end on a positive note on Tuesday.

Out of the Nifty companies, 29 recorded advances, while 21 saw declines. Sun Pharma, BPCL, NTPC, Dr Reddy, and IndusInd Bank emerged as the top gainers, while Hero MotoCorp, Bajaj Finance, Divi’s Lab, JSW Steel, and M&M were among the top losers.

Varun Aggarwal, founder and managing director, Profit Idea, said, “Equity benchmark Nifty closed above 19400 level. Cool off in the US labour market bolstered market confidence that the US Federal Reserve can avoid implementing further monetary tightening. US 10-Year Bond Yield and Dollar Index fell to 2-month low on the expectation that the Federal Reserve is finished tightening monetary policy”.

Aggarwal said, “On the domestic front, impressive quarterly results, fall in oil price and gradually reduce in FIIs selling, added fuel in the market sentiments. Cement witnessed the biggest rally today. Metal, private banks and small & mid-cap Index recorded handsome gain”.

Several factors contributed to this upward trend in the stock market. A cooling-off in the US labour market boosted market confidence, suggesting that the US Federal Reserve might not need to implement further monetary tightening.

Aggarwal said, “Going ahead it will be interesting to see how Nifty moves forward. Nifty has good resistance at 19463-19767 levels. On the downside, support lies at 19210. Major support lies in 18837. OI data has strong call writing at 19500 levels and put writing at 19000 levels. The range of Nifty has become wider and trading must be done as per that. The rally should be played with strict stop losses. For investors, any dip will be a golden opportunity for the long term”.

US 10-year Bond Yields and the Dollar Index both fell to 2-month lows in anticipation of the Federal Reserve’s possible policy shift.

On the domestic front, robust quarterly results, falling oil prices, and a gradual reduction in Foreign Institutional Investors’ (FIIs) selling bolstered market sentiments.

The cement sector experienced a significant rally, while metal, private banks, and small and mid-cap indices recorded substantial gains.

“Mid and small cap with long term perspective can be good for medium to long term investors. On the weekly front, the Maximum Call OI is at 19500 then 19400 strike while the Maximum Put OI is at 19000-19300 strike. Option data suggests a broader trading range between 18800 to 19600 zones while an immediate trading range is between 19000 to 19400 zones. Every dip is a golden opportunity for medium to long-term investors. The medium target for Nifty remains 20466-21234. We remain biased against the Indian economy. Expect India to outperform global markets. On the sectoral front, we remain positive on IT, Pharma, Banking, FMCG, Petrochemicals, and Metals”, said Aggarwal

Looking ahead, the market’s performance remains intriguing. Nifty faces strong resistance at 19,463-19,767 levels, with support at 19,210 and major support at 18,837.

Option data indicates a broader trading range between 18,800 and 19,600 zones, with an immediate range between 19,000 and 19,400 zones.

This market environment presents opportunities for both short-term traders and long-term investors. The Indian economy continues to show promise, and India is expected to outperform global markets.

Positive sentiment surrounds sectors such as IT, pharma, banking, FMCG, petrochemicals, and metals.

Vinod Nair, Head of Research at Geojit Financial Services, said, “The market witnessed some resistance at higher levels as caution prevails due to the start of the key state elections, and further negative global cues on account of a more than expected fall in Chinese exports, highlighting a continued slowdown in global trade”.

Nair added, “Despite the extension of supply cuts by Saudi Arabia and Russia, crude oil prices moderated, a positive for India in the midst of geopolitical tension. This, along with the moderation in US bond yields and the positive ongoing earnings season, will support long-term returns”.

Investors are advised to seize any dips as golden opportunities for medium and long-term investments, with a medium target for Nifty between 20,466 and 21,234.


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