We had asked the question on Monday evening whether HDFC Bank will eventually lead the Nifty out of the range? It sort of did, but on the wrong side.

One may wonder that HDFC Bank was anticipated to get a weightage increase at the latest MSCI rejig. It did. So what went wrong? Well, the street wanted the weightage to be increased in one go, but MSCI decided to increase it in two tranches. The first one now, and the second in November, subject to compliance with the foreign headroom limit.

That did not please the market participants. HDFC Bank’s shares were already down 11% from the July 3 peak and Tuesday saw another 3% drop. 50% of the Nifty’s fall on Tuesday came from India’s largest private lender. The Nifty yet again faced pressure above 24,350 and swiftly reversed from those levels, once HDFC Bank continued to decline.

Besides HDFC Bank, SBI, ITC and Bajaj Finance also contributed to the Nifty fall on Tuesday, albeit in a lesser quantum compared to the index heavyweight.

Wednesday will now be the weekly expiry for both Nifty and the Nifty Bank as Thursday will be a market holiday on account of Independence Day and the Parsi New Year.

For the weekly expiry session, 24,100 becomes the key level on the downside for the Nifty. Tuesday’s low of 24,117 is the same as last Thursday’s close so that will be the first level to watch. The fact that the Nifty has closed near the lowest point of the day will not please the bulls. A little far away is of course last Monday’s swing low of 23,890, which will be another key level.

Wednesday’s trading session will see the final bits of earnings reactions from stocks like Hero MotoCorp, Apollo Hospitals, Manappuram Finance, Muthoot Finance, SJVN, MTAR Technologies among others.

Foreign institutions continued to remain net sellers in the cash market on Tuesday, while domestic institutions continued to be net buyers.

Nagaraj Shetti of HDFC Securities said that a long negative candle was formed on the Nifty’s daily chart and that has moved below the immediate ascending trend line support of 24,300. He added that the recent high of 24,472 seems to be a lower top for the Nifty and a slide below 24,000 – 23,900 levels can trigger a reasonable downward correction. 24,350 on the upside remains a resistance.

It now appears as if the Nifty will test the 50-Day Exponential Moving Average support of 24,040 – 24,000 and potentially dip below the recent low of 23,900, said Rajesh Bhosale of Angel One. He advises keeping positions light and prepare for market fluctuations. 24,350 – 24,500 remains a key hurdle and only a move beyond that will favour the bulls.

Kotak Securities’ Shrikant Chouhan said that a reversal formation and a bearish candle on the daily charts indicates further weakness from current levels. 24,000 will be the trend decider for the day traders, below which the selling pressure could accelerate towards 23,850 – 23,775 levels.

A fall like Tuesday’s in shares of HDFC Bank was bound to reflect on the Nifty Bank index as well. Adding to that was the weekly expiry of the financial services index. The Nifty Bank failed to hold on to 50,000 but has clinging on to the lower end of the range around the 49,750 mark from which it saw a marginal recovery by the close of the session, only marginal.

The index goes into Wednesday’s weekly expiry by first looking to reclaim 50,000 on the upside and if not, protect 49,700 on the downside, a level it has not closed below since June 4, the day the Lok Sabha Election results were declared.

The Nifty Bank continues to oscillate between 49,700 on the downside and 50,600 on the upside, said Om Mehra of SAMCO Securities. With the daily RSI at 36, it is suggesting a weaker trend but also indicating that the index is heading towards oversold territories. The next key support has now shifted further down to 48,800 with 50,000 getting repeatedly breached.

Hrishikesh Yedve of Asit C Mehta Investment Interrmediates said that the Nifty Bank is struggling to surpass the 50-Day Exponential Moving Average around 50,830 levels, while the recent swing support lies at 49,660. A break below that level can take the Nifty Bank further down to 49,000.

What Are The F&O Cues Indicating?

Fresh short positions were seen in these stocks on Tuesday, meaning a decline in price but an increase in Open Interest:

Stock	Price Change	OI Change
Aarti Industries	-15.59%	15.60%
Chambal Fertilisers	-7.21%	8.26%
SBI	-2.07%	7.82%
GNFC	-2.38%	6.91%
ICICI Bank	-0.08%	6.61%

Short covering was seen in these names on Tuesday, meaning an increase in price but a decline in Open Interest:

Stock	Price Change	OI Change
Balrampur Chini	3.32%	-12.50%
Hindustan Copper	3.77%	-6.64%
Siemens	0.96%	-6.43%
Dixon Technologies	2.23%	-4.33%
Federal Bank	0.77%	-3.75%

Unwinding of long positions was seen in these names on Tuesday, meaning a decline in both price and Open Interest:

Stock	Price Change	OI Change
Mahanagar Gas	-2.02%	-10.96%
Sun TV	-0.04%	-9.37%
HPCL	-2.79%	-7.70%
City Union Bank	-1.89%	-7.49%
Piramal Enterprises	-0.22%	-7.23%

These are the stocks to watch out for ahead of Wednesday’s trading session:

• Hero MotoCorp: Net profit up 36.1% to ₹1,122.6 crore, lower than poll of ₹1,201 crore. Revenue up 15.7% to ₹10,143 crore, which is also below the estimates of ₹10,565 crore. EBITDA increased by 21% from last year to ₹1,459.7 crore, also lower than the estimates of ₹1,576 crore. EBITDA margin expands by 60 basis points to 14.4%, but lower than estimates of 14.8%. Volumes during the quarter stood at 15.35 lakh units from 13.53 lakh units last year. Witnessed positive trends across domestic, EV and global businesses. Have a slew of product launches planned in both ICE and EV category. Revenue crossed ₹10,000 crore for the first time ever.
• Apollo Hospitals: Net profit up 83.2% to ₹305.2 crore, marginally higher than estimates of ₹274 crore. Revenue up 15.1% to ₹5,085.6 crore, in-line with estimates of ₹5,077.7 crore. EBITDA up 32.6% to ₹675.1 crore, also in-line with estimates of ₹677.6 crore. EBITDA margin at 13.3% in-line with estimates and higher than 11.5% last year.
• NBCC: Net profit up 38.5% to ₹107.2 crore. Revenue up 11.3% to ₹2,144.2 crore. EBITDA up 60.6% at ₹91.7 crore. EBITDA margin at 4.3% from 3% last year. Project management revenue increases to ₹1,493 crore from ₹1,396 crore last year. EPC revenue up to ₹84.9 crore from ₹61.6 crore last year.
• SJVN: Net profit up 31.4% to ₹357.1 crore. Revenue up 29% to ₹870.4 crore. EBITDA up 33% to ₹667.5 crore. EBITDA margin at 76.7% from 74.5% last year.
• MTAR Tech: Net profit down 78.3% to ₹4.4 crore. Revenue down 15.9% to ₹128.3 crore. EBITDA down 51.9% to ₹16.6 crore. EBITDA margin down to 12.9% from 22.6% year-on-year. Looking forward to generating the highest ever revenue in Q2. Execution in the second half will be better than the first. Expect progressive improvement in margins starting from Q2. Recently received orders worth ₹140 crore in the clean energy segment. Expecting more clean energy orders that shall be executed this fiscal itself. There will also be significant inflow of orders from oil & gas and other sectors in the second half.
• Vedanta: Board approves sale of 11 crore shares of Hindustan Zinc by way of an Offer for Sale (OFS). The number of shares to be sold amounts to 2.6% of the total equity. Price and dates for the OFS are yet to be disclosed.