Home / Markets / Stock Markets /  Nifty breaks out above 17,500. Key levels to watch now

Indian stock market today closed at a four-month high, lifted by banking stocks and Reliance Industries. Cooling oil prices and strong buying from foreign investors lifted sentiment. The NSE Nifty 50 index rose 0.73% at 17,525 while BSE Sensex climbed over 400 points to 58,853. Mahindra & Mahindra was the biggest gainer from the Sensex pack, climbing 3%, followed by Bajaj Finserv, NTPC, Axis Bank, HDFC Bank, Larsen & Toubro, HDFC, Dr Reddy's, IndusInd Bank and Reliance Industries. Among the losers, SBI fell 2% after lower-than-expected earnings.

"FIIs, which were missing from the action over the past few months, have once again started taking exposure to local equities, thus providing a major impetus to the markets. Technically, after a muted opening, the market successfully cleared the short term resistance of 17500 which is broadly positive," said Shrikant Chouhan, head of retail equity research at Kotak Securities.

Oil prices hovered near multi-month lows today as data pointed to a slow recovery in China's crude imports in July. Crude has had a roller-coaster ride in 2022, soaring in the opening months of the year following Russia’s invasion of Ukraine, then sinking from June as global slowdown concerns gathered pace.

"Sustained FII buying and falling oil prices are the major drivers for the ongoing market rally. Heavyweights played a significant role in today's rise, while PSU banks remained under pressure following weak results of the SBI. Western markets continued to gain after strong US job numbers allayed worries of a recession. The week ahead is busy in terms of economic data with the domestic investors gearing up for the release of the inflation numbers along with the manufacturing production data to gauge the strength of the economy," said Vinod Nair, Head of Research at Geojit Financial Services.

However, data released today showed inflows into equity mutual funds fell for the second straight month as volatility in global crude prices, persisting geopolitical issues, soaring inflation and foreign selloff continue to impact investor sentiment. Net investments into equity and equity-linked schemes slumped 42.5% over the previous month to 8,898.2 crore in July, according to data released by the Association of Mutual Funds in India.

Nifty technical outlook

Nifty broke out upwards after a sideways close for three sessions. Nifty could now face resistance in the 17595-17651 band while 17408 could offer support," said Deepak Jasani, Head of Retail Research, HDFC Securities.

Indian markets will be closed on Tuesday for a holiday.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said "for benchmark Nifty, the key support level is 17400 and above which, the breakout formation is likely to continue till 17650-17700. On the other hand, below 17400, the index could slip till 17325-17300."

According to Nagaraj Shetti, Technical Research Analyst, HDFC Securities, “A long bull candle was formed on the daily chart and that is placed at the upper end of the short term high low range of 17200-17500 levels of the last 4 sessions. Technically, this pattern suggests decisive upside breakout of the range at 17500-17550 levels. This is positive indication and signal more upside for the short term. The short term trend of Nifty remains positive with range bound action. A sustainable move above 17550 levels could be considered as an upside breakout of the range and that could pull Nifty towards the next important resistance of 17800-17900 levels in the near term. Immediate support is placed at 17430 levels."




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