The NSE Nifty 50, after tumbling in the trading session on Tuesday, faces key support at 23,000 level, according to stock market analysts.
"The market remains highly volatile. On the downside, 23,000 serves as a key support level, and a break below this mark could trigger further selling toward 22,800," said Hardik Matalia, derivative analyst at Choice Equity Broking Pvt.
On the upside, immediate resistance is seen at 23,200 level, with a critical hurdle near 23,300, the analyst added. For a continued uptrend, the Nifty 50 must sustain above the 23,500-mark, he further said.
Given the heightened volatility, traders are advised to "maintain strict stop-loss measures" and avoid overnight positions to protect capital, Matalia noted.
The current market texture is "weak but oversold", which suggests that level-based trading would be the "ideal strategy for day traders", as per Shrikant Chouhan, head of equity research of Kotak Securities Ltd. He also believes that the 23,000 level would be crucial support zone for the benchmark index.
If the market holds above this level, "we could expect a quick pullback rally towards 23,200-23,225", he said. On the flip side, if Nifty 50 slips below 23,000, then the selling pressure is likely to accelerate, and the index may decline to 22,900-22,850 levels, Chouhan added.
For Bank Nifty, the key support is placed at 48,000 level, whereas 49,700 will act as an immediate hurdle, according to Hrishikesh Yedve, assistant vice president for technical and derivatives research at Asit C. Mehta Investment Intermediates Ltd.
Market Recap
The Indian equity benchmark indices closed lower, taking the steepest fall in three weeks. The Nifty 50 ended 309.80 points, or 1.32% down at 23,071.80, and the 30-stock BSE Sensex settled 1,015.25 points, or 1.31% lower at 76,296.55.
The NSE Nifty Bank also closed lower by 577.60 points, or 1.16%, at 49,403.40.
FII/DII Activity
Foreign portfolio investors stayed net sellers of Indian equities for the fifth straight session on Tuesday as they offloaded stocks worth approximately Rs 4,486 crore.
Domestic institutional investors stayed net buyers for the fifth straight session as they mopped up equities worth Rs 4,002 crore, according to provisional data from the National Stock Exchange.
Also Read: FPIs Stay Net Sellers For Fifth Session
F&O Cues
The Nifty February futures were down 1.3% to 23,153 at a premium of 82 points, with the open interest up by 0.82%.
The open interest distribution for the Nifty 50 Feb. 13 expiry series indicated most activity at 24,000 call strikes, with the 22,500 put strikes having maximum open interest.
Stocks To Watch
HG Infra Engineering: The company jointly received the Letter Of Acceptance worth Rs 2,469 crore from Rail Land Development Authority with D.E.C. Infrastructure and Projects.
BHEL: The firm received an order worth Rs 6,200 crore from Damodar Valley Corp.
TVS Motor: The company signed a memorandum of understanding with Karnataka Govt to invest Rs 2,000 crore in Karnataka.
Jupiter Wagons: The company received aletter of acceptance for order worth Rs 600 crore from Ambuja Cements and ACC. The order is for the manufacture, supply of BCFCM Rakes Wagon.
Global Cues
Stocks in the Asia-Pacific region traded mixed on Wednesday, while the treasuries fell as Jerome Powell indicated that the US Federal Reserve is in no rush to cut interest rates.
Japan's Nikkei was up 115 points, or 0.30% at 38,913, while South Korea's Kospi fell 0.04%, or 0.98 points to 2,538 as of 6:35 a.m. Future contracts in China hinted at a negative stock start, while Hong Kong looks poised for gains.
Powell said the Fed "doesn’t need to rush to adjust interest rates," again signaling that officials will be patient before lowering borrowing costs further.
“With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” Powell said to the Senate Banking Committee.
Meanwhile, all eyes will be on the inflation print in the US scheduled for later in the day. Any healthy signs in the consumer prices will reinforce Powell's "no rush" stance. Additionally, the Fed Chair is also set to testify to the House Financial Services panel on Wednesday.
The dollar index — which tracks the greenback's performance against a basket of 10 leading global currencies — was 0.06% up at 108.024.
Stocks on Wall Street wavered while treasury yields rose on Powell's rate cut stance. The S&P 500 and The Dow Jones Industrial Average rose 0.03% and 0.28%, respectively. The tech-heavy Nasdaq Composite fell 0.36%.
Crude oil prices steadied after data showed a large increase in US crude stockpiles. The Brent crude fell 0.35% at $76.73 a barrel as of 6:45 a.m. IST, and the West Texas Intermediate was down 0.38% at $73.04.
Currency Update
Indian rupee strengthened against the US dollar on Tuesday, with the Reserve Bank of India stepping in, traders told NDTV Profit. The domestic currency sustained its gains from the open, peeling away from the 87-mark as the day progressed. It gained by 65 paise to close at 86.83 against the greenback.
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