The stock market has been cautious for most of this week, despite a strong rally on Tuesday. Since then, the Nifty has been moving within a range, and even the usual volatility from weekly options expiry was missing on Thursday. The market had to digest six Nifty company results that day and is now looking ahead to the big event on Friday—the Reserve Bank of India’s (RBI) monetary policy decision. This will be the first policy announcement under the new RBI Governor, Sanjay Malhotra. Investors are divided on whether the central bank will cut interest rates for the first time in five years.
On the downside, the key support levels for Nifty are now 23,550 and 23,500, with the latter being Thursday’s low. Despite falling in three out of four trading sessions this week, the index is still positive for the week. However, Thursday’s decline ended Nifty’s three-day trend of making higher highs and higher lows.
Apart from the RBI’s policy decision, the market also has to react to earnings results from ITC, Bharti Airtel, Hero MotoCorp, and Britannia. It doesn’t help that Trent and SBI, which announced their results during market hours, closed at their lowest points of the day.
While Nifty struggled on Thursday, the broader market saw plenty of stock-specific movements. Some stocks reacted to earnings results, like Swiggy, while others continued their trends. For example, Abbott and Castrol India extended their gains.
Rupak De of LKP Securities believes that 23,500 will act as an important support level, but if the index falls below that, sentiment could turn negative. On the upside, resistance is at 23,800 and 24,050.
Nagaraj Shetti of HDFC Securities thinks the Nifty’s short-term uptrend is still intact. He expects the index to find support between 23,500 and 23,450, with a breakout above 23,800 triggering further upside. Similarly, Shrikant Chouhan of Kotak Securities says Nifty could bounce back to 23,750 – 23,800 if it stays above 23,500. However, a fall blow 23,500 could weaken the trend as traders may exit their long positions.
Despite SBI’s weak closing, Nifty Bank ended in the green, outperforming Nifty. It has now closed higher for three days in a row and has been making higher highs for four straight sessions. Nifty Bank will be a key focus on Friday due to the RBI policy decision.
Om Mehra of SAMCO Securities says Nifty Bank is holding above its 38.2% Fibonacci retracement level at 50,100, with strong resistance at 51,000 (its 200-day moving average). A breakout above 51,000 could boost bullish momentum, while support on the downside is at 49,700.
Hrishikesh Yedve of Asit C Mehta Investment Intermediates expects Nifty Bank to stay in the 50,000 – 50,600 range in the short term. A breakout in either direction could decide its next move.