Stock Market News: The Indian stock market opened positively on Wednesday, with key indices showing minor gains at the start of trading, as investors looked ahead to comments from the US Federal Reserve regarding interest rates later in the day. By the second half of the trading session, the indices managed to sustain their gains.
At 13:50 IST, Sensex climbed 601.66 points, starting at 76,503.07, while the Nifty 50 rose by 188.55 points, at 23,145.80. Market experts anticipate that the Fed will likely maintain its current benchmark policy rate, but there is significant interest in the central bank’s outlook and future policy direction, particularly given President Donald Trump’s call for lower rates.
According to market experts, the commentary from the Federal Reserve is indeed vital for global markets, particularly as it affects foreign investments in emerging economies like India. On Wednesday, Asian stocks experienced a slight uptick during the thin trading session of the Lunar New Year, following a rebound in Wall Street fueled by technology stocks. This was in response to a decrease in concern over the Chinese AI firm DeepSeek.
With many markets in Asia closed for the holidays, investors’ attention was primarily on the Fed’s impending rate decision, expected later in the day. Meanwhile, US futures remained relatively flat, and reports indicated a decline in oil prices, as per reports.
Market Outlook by Jay Thakkar, Vice President & Head of Derivatives and Quant Research, ICICI Securities
Nifty 50
Nifty 50 seems to have taken a good support in the range of 22,800 to 23,000 levels for this week ahead of the monthly expiry. There has been significant additions in 23,000 strike put options and the OI is more than 1.4cr and this has helped the PCR to jump upto 0.97 levels which is neutral now.
There is not much of aggressive call writing at the higher levels, hence the probability of 22,800 to 23,000 range holding until the expiry day is quite high. The upside seems to be capped at 23,600 levels for this monthly series as the VWAP of the last 30 days is near 23,600 levels which will act as a resistance. The Max pain and modified max pain levels are 23,100 and 23,025 levels respectively and Nifty 50 is trading at/above these levels, so overall 23,000 to 23,600 seems to be the range for the 2 days of this series. The India VIX is now well above 18 which was already anticipated by us earlier as well. Now, above 18 levels the next level comes to 20 levels, so the volatility is not expected to cool off at least ahead of the budget.
The IVs has shot up to 24.73 whereas the IVP and IVR levels have gone up to 99.20 and 84.30 respectively, so by the Budget Day they should be at their peak indicating that post budget the IVs are very likely to cool off as the IVs in the last 1 year is reaching the upper end of the range. So, going forward if the IVs are likely to cool off then there is a high probability of bounce back in Index as well at least until 23,600 levels.
Stocks To Buy in the near-term – Jay Thakkar
Buy Hero Motocorp February Futures at CMP: ₹4,100; Stop Loss: ₹3,950; Target: ₹4,500
HeroMotocorp has clearly shown a divergence wherein the prices have corrected quite a lot but the momentum indicator has provided bullish crossover. There has been huge shorts built up In the futures segment and with this divergence the probability of a short covering is also quite high. The fall from 6000 to 4000 has been on account of good amount of short built up which has reached to almost it life time high levels of at least in last 10 years, hence there is a huge scope of short covering from hereon. In the Options Feb data, the 4000 strike has seen good put addition, hence that becomes an immediate support whereas 4100 strike has highest call OI which when taken off there is no major hurdle seen. The max pain and modified max pain levels are 4100 and 4166, which are the short term resistance which when taken off will lead to further short covering.
Buy State Bank of India (SBI) February Futures at CMP: ₹761; Stop Loss: ₹737; Target: ₹800
SBI has been relatively outperforming the Bank Nifty in the fall, however, now the Banknifty has bounced back quite sharply and there is early signs of short covering in it indicating that there is much more room for the short term uptrend. As far as the options data of FEB is concerned there has been good additions in puts of 740 and 750 strikes, whereas, there has been call unwinding at the higher levels, this too indicates that SBI is likely to witness short covering. The OI has reached to the upper end of the range and based on the past 5 years of data, there is a higher chance of a short covering from these OI levels. The max pain and modified max pai levels of 770 and 782 may act as a resistance whereas the 30-day VWAP is at 794, hence once 770 is taken off the stock is likely to inch towards 794 and 800 levels.
Buy United Breweries (UBL) February Futures at CMP: ₹2,074; Stop Loss: ₹1,990; Targets: ₹2,200
UBL has recently witnessed long built up after a significant reduction in the OI which was on account of profit booking. The prices consolidated and the fall in OI was a clear sign of some consolidation. Now, the overall trend in the medium term is still positive and the stock is witnessing some long built up, so there is a higher probability of the stock resuming its next leg up. In feb Options data, There has been good additions on the put side at 2000 strike which will act an immediate support and there has not been much of call writing at the higher levels, so the risk : reward for the longs is quite favourable.
Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 28/01/2025 or have no other financial interest and do not have any material conflict of interest.
The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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