Pre-Market Update: GIFT Nifty Signals Muted Start for Nifty 50 on August 17

Pre-Market Update at 7:30 AM: The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to open on a cautious note on Monday, August 17. As of 7:21 AM, Gift Nifty was trading around 24,394, indicating a discount of 30 points over the previous close of Nifty futures and pointing to a muted start. Asian markets opened mixed, while U.S. stock futures were largely unchanged.

Japan’s economy grew at an annualised rate of 1.1 per cent in the second quarter, below economists’ expectations of 2 per cent. Growth slowed from 2.1 per cent in the previous quarter as weaker domestic demand offset robust exports. On a year-on-year basis, GDP growth accelerated to 0.7 per cent from 0.5 per cent in the first quarter. The quarter was also the first full three-month period to reflect the impact of the Iran war, which has increased energy costs for businesses and households.

Crude oil prices remained largely steady as renewed clashes in Lebanon and attacks on vessels in the Strait of Hormuz clouded hopes of a ceasefire in the U.S.-Iran conflict. Brent crude traded below USD 89 a barrel after gaining 6 per cent last week, while WTI hovered around USD 82. Oil prices have risen more than 40 per cent so far this year as the U.S.-Iran war enters its sixth month.

U.S. President Donald Trump indicated that his administration plans to intensify economic pressure on Iran, while Treasury Secretary Scott Bessent said additional sanctions could be announced as early as this week. Meanwhile, Iran and Oman appeared to be moving closer to an understanding over the management of the Strait of Hormuz. However, the U.S. has not been involved in the discussions and is unlikely to support an arrangement that does not ensure free passage through the key waterway, which previously handled around one-fifth of global daily oil and LNG supplies.

Gold prices edged higher in early Asian trading on Monday, supported by a weaker U.S. dollar and economic data that reduced expectations of a U.S. interest rate hike next month. Spot gold rose 0.3 per cent to USD 4,388.62 per ounce, while U.S. gold futures for December delivery gained 0.2 per cent to USD 4,444.30.

For the August 18 expiry, the Put-Call Ratio stood at 0.88. On the Put (PE) side, significant open interest addition was seen at the 24,300 strike, while the highest concentration of open interest was at the 24,000 strike. On the Call (CE) side, significant open interest addition was recorded at the 24,350 strike, while open interest concentration remained highest at the 25,000 strike.

The Nifty 50 closed at 24,366 on August 14 after forming a Doji-like candlestick, indicating continued indecision and the possibility of range-bound trading. On the upside, immediate resistance is placed at 24,397, followed by 24,423 and 24,464, with 24,500 emerging as a key hurdle. On the downside, support is seen at 24,315, 24,289 and 24,248, while 24,200 remains a crucial support level, coinciding with the 100-day EMA, 50-day EMA and 50 per cent Fibonacci retracement level. A decisive break below 24,200 could weaken the trend further and drag the index towards 24,050-24,000. The RSI slipped to 52.21, while the MACD continued to show a bearish crossover, indicating weakening momentum and a mildly bearish near-term bias.

Stock-specific action is likely to remain in focus on Monday. Reliance Industries and Rolls-Royce announced their strategic intent to partner for the design, development, manufacturing and delivery of a sovereign indigenous combat engine for India’s AMCA programme. The companies will also explore setting up a dedicated Aerospace Gas Turbine Complex in India.

PB Fintech will remain in focus after IRDAI issued a show-cause notice to Policybazaar Insurance Brokers, a wholly owned subsidiary of PB Fintech, following observations from an inspection conducted in October 2024. Juniper Green Energy received a Letter of Award from SECI for 230 MW of contracted capacity for a Firm and Dispatchable Renewable Energy Round-the-Clock power project. CESC’s subsidiary Purvah Green Power also received an LOA from SECI for 70 MW of FDRE-RTC power from an ISTS-connected renewable energy project.

Dr Reddy’s Laboratories said the U.S. FDA completed a GMP inspection at its FTO-3 formulations facility in Bachupally, Hyderabad, and issued a Form 483 containing four observations. Texmaco Rail & Engineering executed a Share Subscription and Shareholders Agreement with Texmaco Defence Technologies and Calculus for an investment of up to Rs 200 crore. Calculus will hold a 30 per cent stake in Texmaco Defence Technologies after the proposed subscription.

Bank of India appointed Vineet Srivastava as Chief Financial Officer, replacing B Kumar, effective August 14. Kitex Garments’ board approved raising up to Rs 3,000 crore through equity shares, NCDs along with warrants, QIPs or other permitted modes. BEML received a USD 6.65 million order from Mauritius for BE220G hydraulic excavators, taking its international Order Bookings to approximately USD 119 million.

For August 17, LICI, Manappuram Finance, SAIL and Bandhan Bank are under the F&O ban.

Institutional activity turned positive on Friday. Foreign Institutional Investors were net buyers of Indian equities worth Rs 508.12 crore on August 14, while Domestic Institutional Investors bought shares worth Rs 356.40 crore during the session.

Indian benchmark indices ended lower on Friday, August 14, snapping their two-week winning streak. Investor sentiment remained cautious amid uncertainty over a potential U.S.-Iran peace deal, volatility in crude oil prices, rising bond yields and concerns over a possible revival in inflation. The Sensex declined 71 points, or 0.09 per cent, to 78,009.25, while the Nifty 50 fell 30 points, or 0.12 per cent, to settle at 24,366.

Wall Street is also likely to remain a key global cue. U.S. stock futures were largely flat on Sunday evening, with the S&P 500 heading for a fourth consecutive week of gains despite ending lower on Friday. Dow Jones Industrial Average futures edged up 11 points, or 0.02 per cent, while S&P 500 and Nasdaq 100 futures advanced 0.1 per cent and 0.2 per cent, respectively. The S&P 500 has posted three consecutive weekly gains and reached fresh record highs last week, supported by a strong earnings season. However, ongoing Middle East tensions and concerns over the sustainability of the AI-driven market rally remain key risks for global equities.

Overall, Indian markets are likely to begin Monday’s session on a cautious note, with Gift Nifty indicating a muted opening. Investors will closely monitor crude oil prices, developments around the Strait of Hormuz, U.S.-Iran tensions, global equity cues and domestic derivatives positioning. Nifty 50’s 24,200 support and 24,500 resistance levels are likely to remain important for the near-term market direction.

Disclaimer: The article is for informational purposes only and not investment advice.

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