The Indian stock market rebounded after an initially weak start on Wednesday, responding to strong global market sentiments. The Nifty 50 index closed 51 points higher at 19,716 levels, while the BSE Sensex gained 173 points, concluding at the 66,118 mark. However, the Bank Nifty index saw a decline of 35 points, finishing at 44,588. In the broader market, the small-cap index increased by 0.68%, and the mid-cap index gained 0.76%. The positive shift in domestic equities followed reports of Nomura upgrading its rating on the Indian markets to ‘Overweight.’ Nifty recovered from lower levels, driven by buying in index heavyweights, ultimately closing with marginal gains of 52 points at 19,716 levels. The broader market outperformed, with Nifty Midcap 100 and Nifty Smallcap 100 rising by 0.8% and 1%, respectively. Various sectors ended on a positive note, with Pharma, FMCG, and PSU Bank leading the gains.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal, stated, “Markets saw some respite after the previous day’s sell-off, but the pressure still continues given several concerns regarding rising interest rates, crude oil prices, and growth concerns in China.” Nagaraj Shetti, Technical Research Analyst at HDFC Securities, mentioned regarding Nifty 50, “The short-term trend of Nifty seems to have reversed up, and a follow-through upmove could confirm a short-term higher bottom reversal pattern. Immediate support is placed around 19,600-19,550 levels, and a decisive move above the hurdle of 19,750 levels could pull Nifty towards 19,950-20,000 levels.”
Discussing the Bank Nifty outlook, Ashwin Ramani, Derivatives & Technical Analyst at SAMCO Securities, highlighted that Bank Nifty rebounded from the 78.6% retracement level of 44,186 (drawn from the low of 43,600 on August 16 to the high of 46,310 on September 15) and closed at 44,588, a decrease of 36 points. Ramani noted strong put writer additions at 44,200 and 44,300 strikes. Despite the weak underlying trend in Bank Nifty, a decisive close above 44,800 levels could stimulate buying interest, and the downside support is at 44,500 after the day’s closing.
Regarding Nifty call option data, Chinmay Barve, Head of Technical & Derivatives Research at Profitmart Securities, reported that major total Call open interest was concentrated at 19,700, 19,800, and 19,900 strikes, with a total open interest of 221,432, 320,958, and 227,488, respectively. Significant Call open interest additions were observed at 19,750, 19,800, and 19,850 strikes, adding 67,409, 55,835, and 49,049 contracts, respectively. Call unwinding occurred at the 19,650 strike, reducing open interest by 13,266 contracts. Concerning Nifty put option data, Barve mentioned that major total Put open interest was concentrated at 19,700, 19,650, and 19,600 strikes, with a total open interest of 229,775, 166,173, and 278,492 contracts, respectively. Significant Put open interest additions were observed at 19,600 and 19,500 strikes, adding 102,977 and 100,500 contracts, respectively. Put unwinding occurred at the 19,800 and 19,900 strikes, reducing open interest by 10,788 and 6,896 contracts.