Indian stock markets experienced positive momentum, on Thursday, driven largely by gains in information technology (IT) stocks. The optimism was fueled by the minutes from the U.S. Federal Reserve’s recent policy meeting, which indicated a strong possibility of a rate cut by the U.S. central bank in the coming month.
Nifty and Sensex
The Sensex and Nifty, two of India’s key stock indices, showed resilience throughout the trading session, bolstered by the favorable outlook from the Fed. The latest U.S. jobs data, covering the 12 months ending March 2024, revealed that fewer jobs were created than previously estimated. This significant data has clarified the path for the Federal Reserve to consider rate cuts, which many investors view as beneficial for the stock markets.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, elaborated on the market sentiment, stating, “The most likely scenario now is a Fed turning dovish and starting the rate cut cycle with a 25 basis point rate cut in September, indicating further cuts to follow. This can keep the markets stable since the room for uncertainty is coming down.”
Nifty50 index
As market participants digested this information, the Nifty50 index showed promising signs, with seven of its stocks displaying an “RSI Trending Up” signal on August 21. This signal, indicating that the Relative Strength Index (RSI) values have surged above 50, suggests increasing momentum and potential buying opportunities for these stocks.
Conversely, three stocks within the Nifty500 index fell more than 1.5% below the Volume Weighted Average Price (VWAP) on the same day, signaling a potential bearish trend and heightened selling pressure, according to data from stockedge.com. This mixed market activity highlighted the cautious optimism that characterized the day’s trading.
Indian Renewable Energy Development Agency (IREDA)
One of the standout performers was the Indian Renewable Energy Development Agency (IREDA), whose shares surged nearly 9% to reach ₹259.3. The sharp rise came after the company’s board announced plans to discuss raising ₹4,500 crore through a Follow-on Public Offer (FPO) on August 29. This development attracted significant investor attention, contributing to the overall positive sentiment in the market.
As the trading day unfolded, the firm opening of the market, followed by Nifty reclaiming the 24,670 mark within the first hour, signaled that the index was not inclined to succumb to the bearish expectations that had been prevalent over the past two days. Analysts pointed out that the nearest challenge for Nifty would be the 24,900-24,975 range. However, the broader question that had been on the minds of market watchers all week was whether it was time to look beyond this immediate resistance.
Technical studies, particularly those focusing on standard deviation, suggested that while upticks might be restrained, there is a potential for further narrowing of the Bollinger Bands, which could limit upside objectives in the short term. Despite this, the relatively higher momentum observed at the start of the week provided some confidence that the uptrend could continue. For intraday traders, the downside marker was identified at 24,710/640, with the broader uptrend support pegged at 24,410.
Must Read: WhatsApp Business Introduces AI Assistant and Meta Verified Badge for Enhanced User Experience
