Nifty Bank Closes 4.2% Higher, Reliance Drags Nifty; Bandhan Bank Q2 Results Beats Consensus

Nifty, -0.2%; Sensex, -0.4%; Nifty Midcap, +0.4%; Nifty Smallcap, -1.6%; Model Portfolio, -0.3%

Market Pulse Rally Attempt

Nifty, after a gap-up opening, witnessed selling pressure and traded toward the day's low of 11,557 in the initial hour. However, it found support near its 50-DMA, staged a reversal from there, and moved about 150 points off lows to close near 11,700 holding minor gains. Volume was slightly higher compared with the last session. Though heavyweight Reliance Industries (-8.7%) dragged Nifty down, Financials heavyweights such as ICICI Bank, Axis Bank, and HDFC  helped the market push higher. Nifty is trading at 1% and 9% above its 50- and 200-DMA, respectively.

On the sectoral front, stocks from financial space were the leading gainers for the day. Nifty Bank, Nifty Fin Service, Nifty PSU Bank, and Nifty Pvt Bank all closed higher in the range of 3.5–4.5%. On the flip side, Nifty IT, Metal, Pharma, and Auto closed 20–90bps lower. Of 2,213 stocks traded, 643 advanced, 1,126 declined, and the rest remained unchanged.

Looking forward, we would like Nifty to reclaim its 21-DMA. If it fails to reclaim the 21-DMA, 50-DMA (11,542) can act as strong support. We will continue to monitor general conditions and the behavior of leading stocks, looking for evidence that a real move is commencing. During this time, one should look for stocks with quality fundamentals, RS line trending higher, and breaking out from consolidation areas.