In any other phase during the recent past, a gap down would result in the dip getting bought into at some point during the day. That did not happen on Friday. The dip came, but there was no buying at lower levels. Even the slightest recovery was swiftly sold into. From just above 25,000, the Nifty is now within touching distance of breaking below the 24,700 mark on the downside.
With the way the US markets sold off on Friday and with tensions rising in West Asia, that looks like a mere formality on Monday morning. US markets fell after the non-farm payrolls data and over fears that the Fed has been too late in starting to cut interest rates as the economy has started to weaken. The Nasdaq has already entered correction territory (10% fall from record high). The Japanese markets too had their worst day since 1987 on Friday.
The Nifty also snapped an eight-week gaining streak after Friday’s fall. Autos, Metals and IT led the losses on Friday, with Pharma emerging as the outperformer. Even the broader markets fell in-line with the benchmark indices. The fall resulted in the India Volatility Index seeing a sharp spike on Friday, with the 10% surge taking it to levels near 15.
Monday’s session will see earnings reaction from Nifty components like SBI, Divi’s Laboratories, Titan, Britannia, who reported results after market closing on Friday, along with broader market names like Amara Raja, Bank of India, JK Tyre, Nucleus Software, Savita Oil and others.
Bharti Airtel, ONGC, Bharti Hexacom, Honeywell Automation, Devyani International, Deepak Nitrite, Marico, among others will be reporting their results on Monday.
Foreign institutions were net sellers in the cash market on Friday, while domestic institutions were net buyers.
On an immediate basis, the Nifty is finding support between 24,600 – 24,500, while on the other hand, till the index closes above 25,100, it may see rangebound movement. However, a close below 24,500 will take the Nifty down to 24,250 or even 24,100 and a bounce towards 24,900 will be an opportunity to reduce long positions.
Nagaraj Shetti of HDFC Securities believes that the market action is indicating a short-term top reversal pattern for the Nifty at the new highs of 25,078. He expects some more weakness towards 24,600 – 24,500 levels before any potential upside bounce. Immediate resistance is at 24,900.
Angel One’s Osho Krishnan said that the Nifty has a strong support between 24,600 – 24,500 levels and till the index remains above those levels there should not be any cause of concern for the market. On the other hand, the bearish gap on the daily chart between 24,850 – 24,950 will be an immediate resistance.
In comparison to the Nifty, the Nifty Bank fell lesser in quantum and even managed to end higher for the week. The other important aspect is that the index managed to hold on to the mark of 51,000 which has been a key support for the index. It remains to be seen whether these levels are sustained in case of a gap down opening on Monday morning.
Hrishikesh Yedve of Asit C Mehta maintains that the Nifty Bank is consolidating between 51,000 – 52,300 and the traders are advised to wait for a breakout on either side of the range before taking further action on the Nifty Bank.
Kotak Securities’ Athawale said that the Nifty Bank remained above levels of 51,000, which is a positive and can help take the index back to 52,000. However, a close below 51,000 may lead to further weakness towards levels of 50,500 or even 50,200 on the downside.
What Are The F&O Cues Indicating?
These stocks saw fresh long positions on Friday, meaning an increase in both price and Open Interest:
| Stock | Price Change | OI Change |
| Chambal Fertilisers | 0.25% | 22.79% |
| Divi’s Laboratories | 1.21% | 6.78% |
| Info Edge | 4.27% | 6.20% |
| IEX | 2.63% | 5.50% |
| Torrent Pharma | 0.48% | 5.21% |
These stocks added fresh short positions on Friday, meaning a decline in price but an increase in Open Interest:
| Stock | Price Change | OI Change |
| Cummins India | -8.51% | 7.76% |
| UPL | -5.51% | 7.66% |
| IDFC | -1.93% | 6.57% |
| Tata Chemicals | -1.81% | 5.83% |
| Escorts Kubota | -6.34% | 5.25% |
Unwinding of long positions was seen in these stocks on Friday, meaning a decline in both price and Open Interest:
| Stock | Price Change | OI Change |
| GNFC | -3.44% | -11.37% |
| Maruti | -4.14% | -9.92% |
| Birlasoft | -6.38% | -9.91% |
| IndiaMART | -1.73% | -8.77% |
| MCX | -1.17% | -7.84% |
These are the stocks to watch out for ahead of Monday’s trading session:
- State Bank of India: Net profit of ₹17,035 crore, in-line with poll of ₹17,132 crore. Net Interest Income of ₹41,125 crore marginally below poll of ₹42,175 crore. Gross NPA at 2.21% from 2.24% in March. Net NPA unchanged at 0.57%. Provisions at ₹3,449.4 crore from ₹2,501 crore last year and ₹1,609 crore sequentially. Outgoing chairman Dinesh Khara said that he wishes to have a profit after tax of ₹1 lakh crore by the end of financial year 2025.
- Titan: Revenue at ₹12,053 crore versus poll of ₹12,250 crore. EBITDA at ₹1,211 crore versus poll of ₹1,191 crore. EBITDA margin at 10% versus poll of 9.7%. Gross and EBITDA margin stable. Jewellery business EBIT margin at 11.2% from 11% last year. However, buyer growth at less than 2% from last year. Share of studded jewellery at 26% is also unchanged. There is a tailwind of lower excise duty announced in the budget ahead of the upcoming festive and wedding season.
- Britannia: Revenue at ₹4,250 crore versus poll of ₹4,190 crore. EBITDA at ₹754 crore versus poll of ₹775 crore.. EBITDA margin at 17.7% versus poll of 18.5%. Domestic volume growth of 8% versus expected range of 7-8%.Rural market share grew at a faster pace than urban. Continue to expand the distribution footprint and enhance product offerings in the rural market. Modern trade and e-commerce grew handsomely compared to last year. Gross margin at 43.4% from 41.9% last year.
- Divi’s Laboratories: Revenue up 19.1% to ₹2,118 crore but below estimate of ₹2,191 crore. EBITDA at ₹622 crore also below poll of ₹659 crore. EBITDA margin at 29.4% versus expectations of 30.1%. Higher tax expenses weigh on profit. Commentary from management largely positive. See opportunity from the Biosecure Act. Also seeing opportunity in phase 2 and phase 3 molecules. Positive on the GLP 1 drug opportunities but pricing pressure remains in large volume APIs.
- Bank of India: Net profit up 10% to ₹1,702.7 crore. Net Interest Income up 6.1% to ₹6,275.8 crore. Gross NPA at 4.62% from 4.98% in March. Net NPA at 0.99% from 1.22% in March.
- Delhivery: Net profit of ₹54.4 crore versus loss of ₹89.5 crore last year. Revenue up 12.7% to ₹2,172.3 crore from ₹1,927.8 crore last year. EBITDA profit of ₹97 crore from EBITDA loss of ₹15.1 crore year-on-year. EBITDA margin at 4.5%. Part Truckload Revenue up 25% despite challenging market environment. Supply Chain Solutions revenue up 26% led by strong season and new accounts.
- LIC Housing Finance: Net Interest Income up ₹1,989.1 crore from poll of ₹2,194.2 crore. Net profit of ₹1,300.2 crore from poll of 1,244.8 crore. Gross NPA at 3.29% from 3.31% last year. Net NPA at 1.68% from 1.63% last year. Disbursals up 19% year-on-year to ₹12,915 crore. AUM growth of 4.4% at year-on-year to ₹2.88 lakh crore. Net profit down 1.8% year-on-year to ₹1,300.2 crore.
- JK Tyre: Net profit up 37.3% to ₹211.4 crore. Revenue down 2.1% to ₹3,639 crore. EBITDA up 9.3% to ₹500 crore. EBITDA margin at 13.7% from 12.3% year-on-year. Replacement market contributed 62% of the consolidated topline.
- Power Mech Projects: Wins order worth ₹142.5 crore from Meenakshi Energy in Andhra Pradesh for the revival of Phase II (2 X 350 MW) in Nellore District. The order needs to be executed within eight months.
- Gland Pharma: USFDA issues form 483 with three observations for the Hyderabad-based Pashamylaram facility. The facility was inspected between July 25 – August 2. The company said these observations are procedural in nature and corrective steps will be submitted within a stipulated period.
- M&M Financial: Overall disbursement in July up 3% to ₹4,530 crore. Collection efficiency at 95% from 96% last year. Stage-3 and Stage-2 assets remain below 10% put together. Continue to enjoy a comfortable liquidity position of over ₹7,600 crore on its balance sheet.
- SJVN: Cabinet approves investment proposal of ₹5,792.36 crore for the 669 MW lower Arun Hydro Electric project in Nepal at a levelized tariff of ₹4.99 per unit.
- Ashoka Buildcon: Declared lowest bidder for two projects worth ₹1,280.8 crore from the MMRDA.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
