Indian equity markets ended Thursday's session on a weak note as rising geopolitical tensions in West Asia weighed on sentiment, leaving the Nifty hovering near a crucial support zone that analysts believe will determine the market's near-term direction.
Market participants are closely watching developments in the Iran conflict, which have already triggered volatility in global commodity and equity markets. Against this backdrop, technical analysts say the Nifty's ability to defend the 23,100 mark will be critical.
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GIFT Nifty indicates that the market may be opening close to the crucial support level, as the futures were trading 0.3% lower at 23,130 at 10:58 pm.
Jatin Gedia, vice president - technical research at Teji Mandi Investment Technologies, said the benchmark index continues to hold a key support band despite weak global cues.
"The Nifty is holding the support zone of 23,000-23,100 despite negative global cues. In terms of levels for Nifty, 23,550-23,600 is the immediate hurdle zone while 23,000-23,100 continues to act as a support zone. A breach of the range on either side shall result in a trending move in that particular direction," Gedia said.
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Analysts at Enrich Money believe downside risks could intensify if the support zone fails.
"On the downside, the index is currently hovering near the crucial 23,100 support zone. Holding above this level will be important to prevent further weakness. However, a decisive break below 23,000 could accelerate selling pressure and expose the index to further downside toward the 22,800-22,700 region," said Ponmudi R, CEO of Enrich Money.
According to Nandish Shah, Deputy Vice President at HDFC Securities, the Nifty found support near its previous swing low of 23,070 and attempted a recovery, raising hopes of a potential double-bottom formation on the daily chart.
Bank Nifty
The Bank Nifty outperformed the broader market and ended with a mildly positive bias despite witnessing profit booking at higher levels. Ponmudi R noted that the index attracted buying interest near the 54,800 support zone before moving towards the 55,500-55,600 resistance band.
However, a break below the 55,000-54,800 support area could intensify profit booking and drag the index towards 54,400-54,200.
Bajaj Broking Research said Bank Nifty continues to trade above its 20-day exponential moving average and a recent trendline breakout area, indicating that the broader trend remains constructive.
The brokerage noted that the index has faced resistance near the neckline of a double-bottom breakout pattern around 55,500-55,600 over the past two sessions.
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