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Buy dips in monthly expiry week as Nifty eying 26200

ICICIdirect Research 20 Sep 2024 DISCLAIMER

Nifty hit the new highs in tandem with US indices as US Fed delivered first rate cut in four years. Mid and small cap basket, however, underwent round of profit taking as they declined 1% for the week. Large Private banks outperformed for the week. In global arena, Hangseng was top gainer (5%) for the week

What to expect: Nifty witnessed follow through buying to last week’s gains, led by Banking stocks. In upcoming monthly expiry week, we recommend to buy dips as we expect bias to remain positive and index to gradually head towards 26200 over coming weeks gain further towards 26000 while last week’s low of 25200 would remain immediate support. Use dips as buying opportunity

BFSI leading: Bank Nifty scaled back to life highs led by large private banks. With banks having significant weightage on Nifty, strength in corporate banks and large NBFCs would act as tailwind for current uptrend. PSU Banks have also achieved price wise maturity of uptrend and provide favourable risk-reward

Dollar index at inflection point; lower dollar is liquidity positive: Fed’s 50 bps cut has put spotlight on dollar which is expected to weaken. Technically, its already in sequential downtrend. However, decisive breach of 100 mark would lead to sharp and quick decline towards 98 and would be positive in terms of global liquidity especially for EM including India

Sectorally, BFSI, Metal, consumption are expected to outperform while PSU banks are currently poised at key support

Large caps in focus: last few sessions, large caps have relatively outperformed Mid/small category which is reflected in weak breadth. With FII money flowing in, large caps may remain in focus going forward

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