Caution increased among investors ahead of election results
On May 29, 2024, Indian equity indices closed negatively, with the Nifty 50 down 183 points (0.80%) and the BSE Sensex dropping 667.55 points (0.89%), driven by declines in banks, financial services, and IT stocks. Sectoral indices also fell, including the Nifty Midcap 100 and Nifty Bank. Heavy call and put writing suggests Nifty might settle around 22,800, with immediate resistance at this level. Bank Nifty's decline was significant, but a recovery is expected as indices approach critical Fibonacci retracement levels.
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May 29, 2024
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Negative closing
On May 29, 2024, gainers included Hindalco, Power Grid Corp, Divi’s Lab, Nestle India, and Sun Pharma. However, the Indian equity indices closed negatively, with the Nifty 50 down 183 points (0.80%) at 22,704.70 and the BSE Sensex dropping 667.55 points (0.89%) to 74,503. The declines were primarily driven by banks, financial services, and IT stocks, with major losers including HDFC Life Insurance, SBI Life Insurance, ICICI Bank, Tata Consumer Products, and Tech Mahindra.
Lower Sectoral indices
Sectoral indices also fell, with the Nifty Midcap 100 dipping 169 points (0.32%) to 52,125.75 and Nifty Bank closing 640.80 points (1.30%) lower at 48,501.35. In the broader market, both smallcap and midcap stocks ended in the red. Ajit Mishra, Senior Vice President of Research at Religare Broking, noted that the markets continued their corrective trend, losing over half a per cent, with Nifty fluctuating within a range and closing near the day’s low.
The Technicalities
From a technical perspective, heavy call writing was observed at the 23,000 and 22,800 strikes, while put writing was seen at the 22,800 and 22,700 strikes, indicating that Nifty might expire around 22,800. A drop below 22,700 could trigger further selling pressure, with immediate resistance at 22,800, according to Rupak De, Senior Technical Analyst at LKP Securities.
The Bank Nifty
Bank Nifty contributed significantly to the day's decline, with major contributions from HDFC Bank and ICICI Bank. Crucial support for Bank Nifty is at 48,300-48,250, aligning with the 20-day moving average and the 61.82% Fibonacci retracement level. Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, expects a recovery to resume over the next few trading sessions, as both indices have reached critical Fibonacci retracement levels.
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