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Market Update

Nifty : 24,666.90 88.55 (0.36%)

Sensex : 81,330.56 182.34 (0.22%)

* The equity benchmark Sensex climbed nearly 200 points, and the Nifty ended above the 24,600 mark, driven by positive market sentiment after domestic retail and wholesale inflation for April fell to a six-year and 13-month low, respectively.

* Additionally, the encouraging global economic outlook, with the U.S. April inflation cooling to a four-year low of 2.3%, reduced trade tensions between the U.S. and China, and a rally in global markets, boosted sentiment.

* The Sensex rose by 182.34 points, or 0.22%, to close at 81,330, while the Nifty gained 88 points, or 0.40%, to finish at 24,666.

* Domestic inflation dropped to 3.16%, fueling expectations that the RBI may cut interest rates, given that inflation has fallen below its 4% by RBI’s target. Key gainers included stocks in defense, metals, real estate, mid-cap IT, and sugar sectors. The Nifty Defense Index surged by 3% following better-than-expected Q4 results from GRSE and HAL, with GRSE soaring 15% to close at 2,188 and HAL advancing 3.4% to 4,768. The Nifty Metal Index rose 2.5%, driven by a 6-week high in base metal prices on the LME, with Hindustan Copper, National Aluminium, SAIL, and Jindal Steel all seeing gains of 4-6%.

* Both Asian and European markets showed mixed performance amid expectations that the U.S. Federal Reserve might cut interest rates in response to the cooling U.S. April inflation.

Technical Outlook:

* Nifty Index opened on a positive note and inched slightly higher towards the 24770 zone during the initial hour of trade. However, follow-up buying was missing at higher levels, which led to a gradual decline as the day progressed. Despite the weakness, some support-based buying was visible at lower levels, which helped limit the downside.

* On the daily chart, Nifty has formed a small-bodied candle, indicating indecision and lack of strong directional momentum.

* Now it has to cross and hold above 24750 zones for an up move towards 25000 then 25200 zones while supports are placed at 24550 then 24444 zones.

Derivative Outlook:

* Nifty future closed positive with gains of 0.36% at 24728 levels. Positive setup seen in Titagarh Rail Systems, AB Capital, NBCC, JSL, SAIL, National Aluminium, Hindustan Copper, NMDC, MCX, Tata Steel, Sona BLW Precision, IRFC, HAL and LTIM while weakness in REC Ltd, Cipla, Patanjali Foods, Asian Paints, HUDCO, Chambal Fertilizer, PFC, SRF, United Spirits, Naukri and Voltas

* On option front, Maximum Call OI is at 25000 then 24700 strike while Maximum Put OI is at 24500 then 24600 strike. Call writing is seen at 24700 then 25000 strike while Put writing is seen at 24500 then 24600 strike. Option data suggests a broader trading range in between 24200 to 25200 zones while an immediate range between 24400 to 24900 levels

Global Market Update

* European Market - European stocks stalled as traders paused for breath after the rally spurred by trade optimism. Alstom SA slumped 12% as softer guidance overshadowed solid earnings. Both Germany and France Index decline by 0.2% and 0.5% respectively.

* Asian Market - Asian stocks rose, on track for a fourth-straight session of gains, as Chinese tech firms climbed ahead of earnings announcements. Both Hong Kong and China Index rose 2.3% and 1.2% respectively while Japan Index ended marginally lower.

* US Data - MBA Mortgage Application

* Commodity - Oil prices dipped 0.5% to $66/bbl as traders eyed a potential jump in U.S. crude inventories, though prices held near two-week highs amid relief after the United States and China agreed to temporarily lower their reciprocal tariffs. reply

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