Trade setup for 2 May: Fed decision and Q4 earnings to drive markets this week.

Asian Markets Update @ 7 am 

The SGX Nifty is trading 30 points (-0.1%) lower compared to its last close, indicating a flat to negative start for the Nifty50 today. Major Asian markets are trading in the green. Japan's Nikkei 225 advanced 0.1%, while Hong Kong's Hang Seng rose 1.5%.

Global Market Update

US stocks ended lower on Monday despite the government takeover and sale of First Republic Bank to JP Morgan as investors await the Fed interest rate decision. The Dow Jones declined 0.1% to close at 34,051. The S&P 500 fell 0.04% to 4,167, while the Nasdaq Composite lost 0.1% to close at 12,212.

Index Action

Nifty50
May Futures @ 18,112 📈▲120 (+0.6%)
OI Contracts: 1,75,090 (+6.6%)

The Nifty continued its upwards move and closed above 18,000 for the first time since mid-February. The index formed a long green candle on the weekly charts and logged its biggest gains in nine months.

Going forward, the focus will be on the US Fed interest rate decision, Q4 earnings and auto sales numbers this week.

Sectorally, PSU Bank (+2.4%) and Media (+1.8%) were the top gainers, whereas Consumer Durables (-0.3%) was the only laggard.

The Nifty50 options expiring on 4 May have significant positions at 18,000 and 18,200 calls and 18,000 and 17,800 puts.

According to options data and OI analysis, the Nifty50's long range for the 25th May expiry is between 17,600 and 18,500. On the other hand, 17,800 and 18,250 is the short-term range for this week.

Bank Nifty
May Futures @ 43,230 📈▲217 (+0.5%)
OI Contracts: 91,628 (+3.8%)

The Bank Nifty settled in the green for the fifth straight session and clocked its highest weekly close for this calendar year. The weekly options contract has significant positions at the 43,000 strike for both call and put options suggesting this could be a pivotal level for the banking index for the coming week.

Among banking stocks, Punjab National Bank (+3.6%) and IDFC First Bank (+1.3%) were the biggest gainers, while ICICI Bank (-0.08%) and Axis Bank (-2.4%) were the laggards.

The Bank Nifty's options expiring on 4 May have significant positions at the 43,000 and 43,500 calls and 43,000 and 42,000 puts.

According to options data and OI analysis, Bank Nifty's range for the 25th May expiry is between 41,800 and 44,400. On the other hand, 42,800 and 43,800 is the short-term range for this week.

FII and DII Data💰

Foreign Institutional Investors (FIIs) bought shares worth ₹3,304 crore, while Domestic Institutional Investors (DIIs) bought shares worth ₹264 crore in the cash market. In the derivatives market, FIIs bought index futures worth ₹183 crore and sold index options worth ₹1,094 crore. Further, they bought stock futures worth ₹210 crore and stock options worth ₹155 crore.

India VIX

The fear gauge India VIX fell 4.2% to 10.95. Vix has now tested the pre-pandemic 2020 lows. Any spike in Vix from such low levels can leave the markets vulnerable to sharp profit-booking bouts.

Stock Action📊

Long build-up was seen in Aarti Industries, Syngene International. Indiamart Intermesh, Laurus Labs and IDFC First Bank.

Short build-up was seen in Atul Ltd, Axis Bank, Godrej Consumer Products, Shriram Finance and Voltas.

*In Futures and Options or F&O, long build-up means an increase in Open Interest (OI) along with an increase in price, and short build-up means an increase in Open Interest (OI) along with a decrease in price.

**Source: nseindia.com. Cash market figures are provisional.