Trade Setup For May 24: Nifty, Sensex Record Run Likely To Continue On Strong Cues

Analysts expect the prevailing positive trend to continue in the near term after a record-breaking session a day ago likely as a result of short covering by overseas investors.

Technically, the NSE Nifty 50 crossed the barrier of 22,800 and managed to sustain above it, suggesting strength, according to Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C Mehta Investment Interrmediates Ltd. "Thus, as long as the index holds 22,800, we expect the rally to extend towards 23,100–23,200."

This positive momentum will continue on the back of an improving political environment, continued short covering by foreign institutional investors and strong domestic macros, according to Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd. "Sectors like defence, banking, and railways are expected to remain in focus."

The prevailing positive trend will continue, with the alignment of the banking index potentially adding further momentum, according to Ajit Mishra, senior vice president of research at Religare Broking Ltd. "We are now targeting the 23,100–23,400 zone for the Nifty, with the 22,600–22,800 zone expected to provide support in case of any pullback."

The GIFT Nifty was trading 11 points or 0.05% lower at 22,949.00 as of 06:54 a.m.

The Nifty May futures were 1.54% up to 23,002.7 at a premium of 32.55 points, while its open interest was up by 5.16%. The Nifty Bank May futures was up by 1.85% to 48,838.65 at a premium of 70.05 points, and its open interest was down by 3.4%.

The open interest distribution for the Nifty May 30 series indicates that the 21,000 level is seeing the most put strikes, and call strikes of 24,000 have the maximum open interest.

For the Bank Nifty options' May 29 expiry, the maximum call open interest was at 50,000 and the maximum put open interest was at 48,000.

Overseas investors turned net buyers on Thursday after three days of selling.

Foreign portfolio investors bought stocks worth Rs 4,670.95 crore and domestic institutional investors stayed net buyers for three straight sessions and mopped up equities worth Rs 146.5 crore, according to provisional data from the National Stock Exchange.

India's benchmark indices ended at a record high on Thursday after the Reserve Bank of India approved the highest-ever dividend of Rs 2.11 lakh crore to the government.

The NSE Nifty 50 gained 369.85 points, or 1.64%, to end at its highest closing of 22,967.65. The S&P BSE Sensex ended 1,196.98 points, or 1.61%, higher at 75,418.04, a record closing high.

Intraday, the Nifty gained 1.77% to a record high of 22,993.60. The S&P BSE Sensex rose 1.72%, or 1,278.85 points, to a fresh high of 75,499.91. The index posted the biggest intraday rise since Jan. 29.

On the NSE, 11 sectors advanced and one declined. NSE Nifty Auto rose over 2% to emerge as the top performing sector. The NSE Nifty Pharma sector was the top loser on Thursday.

Broader markets underperformed benchmark indices. The S&P BSE Midcap ended 0.58% higher, and the S&P BSE Smallcap settled 0.27% higher.

• UPL: The company and Aarti Industries entered into a joint venture for the manufacturing of specialty chemicals that find application in multiple downstream industries. The JV Company is expected to commence commercial supplies by Q1 fiscal 2026–27, with a peak annual revenue potential of Rs 400–500 crore in the next two–three years.

• Vodafone Idea: The company has clarified that they are in discussion with Ericsson and other network vendors for 5G network gear.

• Zee Entertainment Enterprises: The company seeks a termination fee of $90 million from Culver Max and Bangla Entertainment to terminate the merger cooperation agreement on account of a breach by Culver Max and BEPL.

• InterGlobe Aviation Q4 FY24 (Consolidated, YoY)

  Revenue up 26% Rs 17,825 crore versus Rs 14,161 crore (Bloomberg estimate Rs 16,860 crore).

  Ebitda up 66% at Rs 4,159 crore versus Rs 2,499 crore (Bloomberg estimate Rs 3,826 crore).

  Margin at 23.3% versus 17.6% (Bloomberg estimate Rs 22.7%).

  Net profit up 106.2% at Rs 1,895 crore versus Rs 919 crore (Bloomberg estimate Rs 1,916 crore).

Markets in the Asia-Pacific declined, tracking overnight losses on Wall Street as stronger than anticipated economic data compelled traders to push their rate cut expectation further.

The Nikkei 225 was trading 536.32 points or 1.37% lower at 38,566.90, and the S&P ASX 200 was trading 66.90 points or 0.86% down at 7,744.90 as of 06:51 a.m.

The US S&P Global Flash Composite Purchasing Managers Index rose to 54.4 in May from 51.3 in April, topping all estimates by Bloomberg. A reading above 50 indicates expansion, and below hints and contraction in activity.

Bonds sold off as data showed US business activity accelerated amid a pickup in inflation that will likely keep the Federal Reserve on hold. An earlier rally in stocks waned, though Nvidia Corp. jumped on a solid outlook, Bloomberg said.

The S&P 500 Index and Nasdaq Composite fell 0.74% and 0.39%, respectively, as of Thursday. The Dow Jones Industrial Average fell by 1.53%.

• US Dollar Index at 105.08

• US 10-year bond yield at 4.47%

• Brent crude down 0.06% at $81.31 per barrel

• Nymex crude down 0.13% at $76.77 per barrel 

• Bitcoin was down 0.07% at $67,703.88

The currency market was shut on Thursday on account of Buddha Purnima 

The Indian rupee closed stronger against the dollar on Wednesday on likely inflows into local stocks, even as market participants waited for the release of the minutes of the US Fed's latest meeting to give fresh direction to the market.

The local currency appreciated 3 paise to close at 83.28 against the US dollar, according to Bloomberg data.