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What is the story about?
Cautious sentiment surrounding the fragile US-Iran ceasefire weighed on domestic equities, leading to a muted start for Wednesday's trading session. Despite the subdued trade, the benchmark Nifty50 index continues to hold above the crucial 23,800 breakout zone on the daily chart.
However, the recent rally has triggered profit booking over the last two sessions, limiting further upside.
The Nifty extended its losing streak for a second straight day on Wednesday, ending 6 points lower at 23,907. The index largely remained range-bound as traders refrained from taking aggressive positions ahead of the holiday.
Among the index heavyweights, Tata Motors, Hindalco Industries and Power Grid Corporation of India led the gains, while ONGC, HDFC Bank and HDFC Life emerged as the top laggards.
Sectoral performance remained mixed. Media, metal and auto stocks outperformed, while financial services, private banks, IT and FMCG indices closed lower.
Broader markets continued to outperform the benchmark indices, with the Nifty Midcap 100 and Smallcap 100 gaining 0.42% and 0.15%, respectively.
The Indian rupee also recovered from intraday lows to end with marginal losses, aided by softer crude oil prices and weakness in the US dollar.
Easing month-end dollar demand further supported the late-session recovery ahead of the holiday.
According to Siddhartha Khemka of Motilal Oswal, domestic equities could continue their gradual recovery if crude oil prices remain soft and concerns over global energy supply disruptions ease further.
However, he cautioned that sentiment is likely to stay guarded amid mixed signals surrounding the US-Iran negotiations and fresh US military strikes in southern Iran, which have once again revived geopolitical risk premiums.
Khemka said that the market's path ahead appears narrower than what last week's rally had suggested.
Technical view
From a technical perspective, Nandish Shah of HDFC Securities said Nifty is hovering around its 50-DEMA near the 24,000 mark, while the recent swing high near 24,100 remains the immediate resistance level.
On the downside, support is placed at 23,800, where the previous breakout coincides with the 20-DEMA, while stronger support is seen near 23,600. According to Shah, these levels are likely to dictate near-term positioning until the index witnesses a decisive breakout.
Osho Krishan of Angel One said the index continues to trade within the narrow range defined by the 20 and 50 DEMA, indicating the absence of strong directional momentum.
He added that a decisive breakout from this zone is necessary to revive momentum in the near term.
Krishan further said that the 23,800-23,700 zone, which marks the confluence of the 20 DEMA and the previous week's closing level, is expected to act as a key support area, followed by the stronger 23,600 support zone.
On the upside, he believes a sustained move above 24,000-24,050 could reaffirm bullish momentum and potentially push the index towards the 24,300-24,350 zone in the near term.
Meanwhile, Vatsal Bhuva of LKP Securities said the Nifty managed to find support near its 20-day SMA during Wednesday's session, indicating buying interest at lower levels.
According to Bhuva, 23,800 will act as immediate support, while the 24,000-24,100 zone remains a strong resistance band. Positional support for the index is placed near 23,650.
The Bank Nifty index also moved out of its initial consolidation phase and climbed to an intraday high of 55,222. However, profit booking at higher levels erased gains, dragging the index lower to close at 54,854, down 0.43%.
Sudeep Shah of SBI Securities said the immediate resistance for Bank Nifty is placed in the 55,200-55,300 zone.
A sustained move above this range could extend the recovery towards 55,700 and subsequently 56,100 in the short term. On the downside, immediate support is placed in the 54,400-54,300 zone.
However, the recent rally has triggered profit booking over the last two sessions, limiting further upside.
The Nifty extended its losing streak for a second straight day on Wednesday, ending 6 points lower at 23,907. The index largely remained range-bound as traders refrained from taking aggressive positions ahead of the holiday.
Among the index heavyweights, Tata Motors, Hindalco Industries and Power Grid Corporation of India led the gains, while ONGC, HDFC Bank and HDFC Life emerged as the top laggards.
Sectoral performance remained mixed. Media, metal and auto stocks outperformed, while financial services, private banks, IT and FMCG indices closed lower.
Broader markets continued to outperform the benchmark indices, with the Nifty Midcap 100 and Smallcap 100 gaining 0.42% and 0.15%, respectively.
The Indian rupee also recovered from intraday lows to end with marginal losses, aided by softer crude oil prices and weakness in the US dollar.
Easing month-end dollar demand further supported the late-session recovery ahead of the holiday.
According to Siddhartha Khemka of Motilal Oswal, domestic equities could continue their gradual recovery if crude oil prices remain soft and concerns over global energy supply disruptions ease further.
However, he cautioned that sentiment is likely to stay guarded amid mixed signals surrounding the US-Iran negotiations and fresh US military strikes in southern Iran, which have once again revived geopolitical risk premiums.
Khemka said that the market's path ahead appears narrower than what last week's rally had suggested.
Technical view
From a technical perspective, Nandish Shah of HDFC Securities said Nifty is hovering around its 50-DEMA near the 24,000 mark, while the recent swing high near 24,100 remains the immediate resistance level.
On the downside, support is placed at 23,800, where the previous breakout coincides with the 20-DEMA, while stronger support is seen near 23,600. According to Shah, these levels are likely to dictate near-term positioning until the index witnesses a decisive breakout.
Osho Krishan of Angel One said the index continues to trade within the narrow range defined by the 20 and 50 DEMA, indicating the absence of strong directional momentum.
He added that a decisive breakout from this zone is necessary to revive momentum in the near term.
Krishan further said that the 23,800-23,700 zone, which marks the confluence of the 20 DEMA and the previous week's closing level, is expected to act as a key support area, followed by the stronger 23,600 support zone.
On the upside, he believes a sustained move above 24,000-24,050 could reaffirm bullish momentum and potentially push the index towards the 24,300-24,350 zone in the near term.
Meanwhile, Vatsal Bhuva of LKP Securities said the Nifty managed to find support near its 20-day SMA during Wednesday's session, indicating buying interest at lower levels.
According to Bhuva, 23,800 will act as immediate support, while the 24,000-24,100 zone remains a strong resistance band. Positional support for the index is placed near 23,650.
The Bank Nifty index also moved out of its initial consolidation phase and climbed to an intraday high of 55,222. However, profit booking at higher levels erased gains, dragging the index lower to close at 54,854, down 0.43%.
Sudeep Shah of SBI Securities said the immediate resistance for Bank Nifty is placed in the 55,200-55,300 zone.
A sustained move above this range could extend the recovery towards 55,700 and subsequently 56,100 in the short term. On the downside, immediate support is placed in the 54,400-54,300 zone.
