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Market Update

Nifty : 23,437.20 +108.65 (+0.47%)

Sensex : 77,044.29 +309.40 (+0.40%)

* The equity benchmark indices extended their winning streak for the third consecutive trading session, closing at the day's highs, supported by gains in financials, FMCG, and oil & gas stocks. Market sentiment was buoyed by retail inflation dropping to a six-year low of 3.34%, coupled with the India Meteorological Department's (IMD) forecast of an above-normal monsoon at 105% of the long-period average. Furthermore, Foreign Institutional Investors (FIIs) turned net buyers for the first time this month, with inflows surpassing Rs.6,000 crore.

* In addition, both European markets and US futures rebounded after China signaled its willingness to engage in talks with the US, easing tensions in the ongoing trade dispute. As a result, the Nifty closed near its highs for the day at 77,044, up 309 points (0.40%), while the Sensex ended at 23,437, gaining 109 points (0.50%).

* Broader markets continued to outperform the benchmark indices, with the Nifty Midcap and Small Cap indices each rising by nearly 1%. The Nifty PSU Banking Index saw the biggest gains, up 2.5%, fueled by expectations of further rate cuts from the RBI, especially with retail inflation falling to a near six-year low of 3.34%, well below the RBI's 4% target. Key contributors to this surge included Union Bank, Bank of Baroda, Indian Bank, and Bank of India.

* The Nifty FMCG Index also gained almost 1%, driven by optimism regarding the IMD's monsoon forecast and the potential boost to rural demand from lower inflation. Notable individual stock performers included JBM Auto, Engineers India, Gujarat Mineral Development Corporation, NTPC Green Energy, Olectra Greentech, and 21 other Nifty 500 constituents, each posting gains of over 4%.

Technical Outlook:

* Nifty Index opened positive and after a drop to 23273 levels, it witnessed a pullback in the first couple of hours which was followed by some consolidation. The second half of the session witnessed a smart come back of the bulls and drove the index to 23450 levels to finally close at its higher band with gains of around 110 points.

* It formed a bullish candle with longer lower wick and has been making higher lows from the last five sessions. Now it has to hold above 23350 zones for an up move towards 23600 then 23750 levels while supports have shifted higher to 23250 and then 23050 level.

Derivative Outlook:

* Nifty future closed positive with gains of 0.43% at 23440 levels. Positive setup seen in Axis Bank, Cholafin, ONGC, Bank of Baroda, RBL Bank, HPCL, Indian Hotel, Dixon, MRF, Indian Bank, Havells, Paytm, AB Capital, Adani Port, HDFC Life, Marico and Bharti Airtel while weakness in Maruti, IGL, Glenmark, LTIM, DLF, Sun Pharma, Voltas, TCS, Cropmton, Infy MGL and Zyduslife.

* On option front, Maximum Call OI is at 24000 then 23500 strike while Maximum Put OI is at 23000 then 23300 strike. Call writing is seen at 23450 then 23700 strike while Put writing is seen at 23400 then 23350 strike. Option data suggests a broader trading range in between 22900 to 23900 zones while an immediate range between 23200 to 23600 levels

Global Market Update

* European Market - European equities retreated as the US administration’s restrictions on chipmaker Nvidia Corp.’s exports to China hurt investor sentiment. UK, Germany and France Index decline 1% each.

* Asian Market - Stocks in Asia fell as US trade conflicts showed no signs of abating after the Trump administration imposed new restrictions on Nvidia Corp.’s chip exports to China. Japan, South Korea, Hong Kong and Taiwan Index gained up to 1.5%. China Index close marginally positive after announced better than expected Q1 GDP.

* US Data - Industrial Production and Retail Sales.

* Commodity - Oil fell 1% to $64/bbl as wider markets turned lower and expectations increased for a glut because of the escalating trade war between the world’s two biggest economies.

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