Nifty Outlook for August 3: Index may react to positive FCNR flows, results amidst oil fall

The Nifty extended its winning streak to a third consecutive session on Friday, gaining 66 points to settle at 24,383.

The index opened 44 points higher and advanced through the first half of the session, touching an intraday high of 24,429 before profit booking trimmed some of the gains towards the close.

With four out of five sessions ending in the green last week, the benchmark posted a weekly gain of 2.59%.

Among the Nifty 50 stocks, Bajaj Finance, Bajaj Finserv and Jio Financial Services emerged as the top gainers, while TCS, Eternal and Infosys were the biggest drags.

Sectoral breadth remained positive. All major sectoral indices, barring IT, FMCG and Consumer Durables, ended higher. Media, Auto and Financial Services led the gains.

The broader market also remained firm, with both the Nifty Midcap 100 and Nifty Smallcap 100 advancing 0.44%.

The focus now shifts to a packed week for markets. Investors will track the Reserve Bank of India

's monetary policy decision, Manufacturing and Services PMI readings, crude oil prices and developments in West Asia.

The ongoing Q1FY27 earnings season is also expected to keep stock-specific action elevated. Major earnings over the weekend included Divi's Laboratories, APL Apollo Tubes, CDSL, AU Small Finance Bank and Persistent Systems.

Meanwhile, banks have mobilised $36.7 billion through FCNR(B) deposits between June 8 and July 31 under the RBI's temporary swap facility. The healthy inflows, driven by attractive deposit rates and leverage offered to NRIs, are expected to support liquidity and provide an additional tailwind for domestic markets.

Nagaraj Shetti of HDFC Securities said the underlying trend for Nifty remains constructive. According to him, a sustained move above the 24,400 mark could pave the way for a rally towards the 24,600-24,700 zone, while immediate support is seen around 24,200.

Nandish Shah of HDFC Securities said the index has reclaimed both its 200-day DEMA and a key swing-high resistance level, strengthening the near-term bullish setup.

He expects resistance around 24,530, followed by the 200-day SMA near 24,778, while support is placed at 24,100.

LKP Securities' Rupak De said the benchmark maintained its positive bias by holding above key hourly moving averages, although momentum remained subdued amid uncertainty over crude oil prices and geopolitical developments in the Middle East.

He added that the broader trend continues to favour the bulls as Nifty is trading above its 50-day EMA on the daily chart. Support is placed at 24,200, while resistance is seen near 24,500.

Hitesh Rathi of Angel One believes the near-term trend will strengthen only if Nifty decisively breaks above the 24,550-24,600 zone. A sustained move beyond 24,650-24,700 would signal a stronger trend reversal and could open the door for further upside. On the downside, immediate support is placed in the 24,250-24,200 range, with a stronger base around 23,980-23,950.

Meanwhile, Bank Nifty underperformed the benchmark. The index opened lower and slipped to an intraday low of 56,769 before buying at lower levels helped it recover most of the losses. It eventually closed 0.10% lower at 57,148.

The banking index has been consolidating within the 57,330-56,672 range over the past four sessions, signalling a period of range-bound trade.

Sudeep Shah of SBI Securities said Bank Nifty faces immediate resistance in the 57,500-57,600 zone. A sustained move above this hurdle could trigger a rally towards 58,000 and subsequently 58,400. On the downside, key support is placed in the 56,700-56,600 zone.