Markets extended their recovery in a volatile session, gaining over 1% after a brief pause. Following a subdued start, a sudden surge in select heavyweight stocks mid-session lifted sentiment, although volatile swings in the final hour tempered the momentum. Ultimately, the Nifty ended above 24,700, marking its highest closing level since October 21.

Most sectors contributed to the rally, with IT, banking, and auto emerging as the top gainers. The IT index hit a record high, rising more than 2%, with Infosys and TCS leading the gains.

Bajaj Auto shares slipped despite company’s clarification on Freedom 125 Bike. Bajaj Auto responded to a UBS report that 72% of its “Freedom” portfolio has not seen any change as of date in terms of price of features as was originally envisaged at the time of its launch. UBS said that Bajaj Auto has cut the prices of Freedom 125 entry-level variant by ₹5,000, while that of the mid-level variant has been cut by ₹10,000. The prices of select Pulsar variants have also been cut post Diwali. Bajaj Auto said that the report does not present a full or accurate picture.

Market volatility today was largely induced due to uncertainty around MPC’s policy meet and the RBI’s focus on liquidity measures following a dip in economic growth.

While the IT and banking sectors continue to drive the index higher, broader sectoral participation will be essential for extending this rally.

For Thursday’s session, which also happened to be the weekly options expiry for the Nifty 50 contracts, the index traded in a range of nearly 600 points, 24,295 on the downside, and 24,857 on the upside.

Motilal Oswal’s Chandan Taparia said that multiple factors were behind such a whipsaw on the Nifty. Taparia said that earlier, the volatility would be distributed due to different weekly options expiries, but since the new SEBI regulation of allowing only one weekly expiry, the entire shift has turned to Thursday as Nifty is the only contract now to have weekly expiries.

“Apart from that, what we noticed that most of the options writer, or most of the algo trader who were participating, in the Nifty Bank to get the benefit of the Theta decay and ROI, used to be better because every day they used to write different strikes of different indices. But now, as ROI is lower due to the higher transaction charges and lower expiry days, most of the traders have shifted their focus to the weekly expiry on Niftym” Taparia said while speaking to CNBC-TV18.

The Motilal Oswal analyst added that the monthly expiry is now expected to be more volatile as all four NSE indices, Nifty, Nifty Bank, Nifty Midcap, will expiry on the last Thursday of the month.

Foreign institutions were net buyers again in the cash market on Thursday, while domestic institutions were net sellers.

What do the Nifty 50 charts indicate?

The Nifty 50 posted a strong recovery in the latter half of the session, ending with a gain of 0.98% at 24,708.40 after recording an intraday high of 24,857.75.

Om Mehra of SAMCO Securities said the index formed a long-legged bullish candle, indicating strong buying momentum, while the previous resistance at 24,500 has now turned into strong support. A breakout above a declining trendline on the hourly chart triggered a strong upward rally.

While the primary trend remains bullish, Mehra said that one should remain cautious of sharp intraday corrections. The immediate support is positioned at 24,550.

In the short term, the trend is likely to remain positive as long as it stays above 24,300. Traders may adopt a buy-on-dips strategy in the current market. On the higher side, the index could move towards 25,000 in the near term, said Rupak De of LKP Securities.

“For traders, the levels of 24,600/81500 and 24,500/81200 would act as key support zones. As long as the market is trading above these levels, the bullish sentiment is likely to continue. On the upside, it could rally to 24,850-25000/82200-82700,” said Shrikant Chouhan of Kotak Securities.

What do the Nifty Bank charts indicate?

The Nifty Bank closed at 53,603.55, up 0.63%, marking a higher high and higher low formation on the daily chart. The index is now just 864 points away from its 52-week high of 54,467.35.

“After a prolonged consolidation and breakout above 52,800, the primary bullish trend has been confirmed, with the index holding above the previous swing high. The short-term moving averages (SMAs) have crossed above the medium-term SMAs, forming multiple positive crossovers that further strengthen the bullish outlook. The daily RSI is comfortably positioned above 65, indicating the strong momentum,” Mehra said.

The analyst added that support level has shifted upward to 53,200, while immediate resistance is seen in the 54,100–54,200 range.

These are the stocks to watch ahead of Friday’s trading session:

Afcons Infrastructure completes longest tunnelling drive for Delhi Metro Rail Corporation (DMRC) in Delhi Metro Phase-4.

Nykaa: Nihir Parikh resigns as CEO of NykaaFashion.com with effect from December 5, 2024.

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