Trade Setup For Dec. 6: Nifty 50 Can Test 25,000 Levels As Attention Shifts To RBI MPC Meet Outcome

The recent momentum shown by NSE Nifty 50 can push the benchmark index towards the 25,000-level, analysts said ahead of the outcome of the Reserve Bank of India's Monetary Policy Committee meeting on Friday.

"It appears that the market has already digested tomorrow's MPC outcome... The index is heading towards the psychological barrier of 25,000, whereas the support has shifted higher to 24,550," said Aditya Gaggar, director of Progressive Shares Brokers Pvt.

For traders, the levels of 24,600-24,500 would act as key support zones, according to Shrikant Chouhan, head of equity research at Kotak Securities Ltd. "On the upside, it could rally to 24,850-25,000.".

Technically, on the daily chart, Nifty has formed a bullish candle, which indicates strength, suggested Hrishikesh Yedve, assistant vice president for technical and derivatives research at Asit C Mehta Investment Interrmediates Ltd.

"The index has crossed the 24,575 obstacle and closed above it, indicating strength. As per this breakout, the index could test 24,850-25,000 levels in the short term," he said.

On the downside, the 100-day exponential moving average, or DEMA support is placed near 24,320 levels, Yedve pointed out. "Thus, 24,300-24,320 will act as strong support for the index. As long as the Nifty stays above 24,300, traders should adopt a buy-on-dips strategy."

Bank Nifty, one of the keenly tracked indices, has also formed a "bullish candle" on the daily charts, from a technical perspective, the analyst said. "If the index holds today's low of 52,850, its upward movement might extend to 54,000-54,500. Thus, a buy-on-dips strategy needs to be adopted in Bank Nifty as long as it holds above 52,850 levels," Yedve said.

Overseas investors stayed net buyers of Indian equities for the third consecutive session on Thursday, while the domestic institutional investors stayed net sellers for a third day.

Foreign portfolio investors mopped up stocks worth Rs 8,539.91 crore, the highest amount bought by FPIs so far this month, and domestic institutional investors sold shares worth Rs 2,303.64 crore, according to provisional data shared by the National Stock Exchange.

The Nifty November futures were up by 0.87% to 24,775 at a premium of 67 points, with the open interest down by 3.2%.

The open interest distribution for the Nifty 50 Dec. 12 expiry series indicated most activity at 26,000 call strikes, with the 21,600 put strikes having maximum open interest.

The benchmark equity indices turned volatile in the last hour of trade on Thursday but still managed to close at their highest levels in more than a month, tracking records made by their US peers.

The Nifty 50 ended 240.95 points, or 0.98%, higher at 24,708.40, and the BSE Sensex closed 809.53 points, or 1%, up at 81,765.86.

During the day, the Nifty rose as much as 1.6% to 24,857.75, its highest level since Oct. 22, and the Sensex added as much as 1.68% to 82,317.74, its highest level since Oct. 9.

• Canara Bank: The RBI has approved the bank's plan to divest 13% of its shareholding in Canara Robeco AMC and 14.5% in Canara HSBC Life Insurance through an IPO. Additionally, the bank has been instructed to adhere to the deadline of Oct. 31, 2029, for increasing its stake in these entities to 30%.

• FSN E-Commerce Ventures: Nihir Parikh has resigned from his position as chief executive officer of Nykaa Fashion.com, effective from Thursday.

• Ola Electric Mobility: The company has received additional communication from the Central Consumer Protection Authority requesting further documents and information related to its previous response. The CCPA has given the company a 15-day timeline from the date of the email to submit the required response.

The Indian rupee closed flat at 84.73 against the US dollar on Thursday after opening flat in the morning at 84.74. The domestic currency closed at 84.73 on the previous day.

The rupee had reached its lowest point in recent trading when it fell to 84.74 on Wednesday, marking a continued weakening trend. Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, attributed this decline to persistent dollar buying, particularly due to defence-related deals that added pressure on the domestic currency.