The Indian equity benchmarks ended lower on Wednesday after a tech selloff prompted by brokerages downgrading global software companies. As of 10:13 p.m., the GIFT Nifty is pointing to another gap-down open as it was trading 0.8% lower at 23,312.50.
Analysts, however, have highlighted that the Nifty's texture on technical charts showed buying interest at lower levels, leading to a reversal from day's lows.
"On the daily chart, Nifty has formed a thin body candle with a prominent lower wick, indicating buying interest at lower levels. The index approached the crucial 61.8% Fibonacci retracement zone of 23,120–23,115 of the previous up move from 22,183 to 24,602, where it witnessed strong demand, resulting in a sharp intraday rebound," stated Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.
Meanwhile, crude oil prices remained in the green throughout the day, with global benchmark Brent crude trading 1.8% higher at $97.66 per barrel and West Texas Intermediate trading over 2% higher at $95.75 per barrel.
Siddhartha Khemka, Head of Research at Wealth Management, Motilal Oswal Financial Services underlined that investors are closely tracking energy prices, ongoing US-Iran negotiations, Foreign Institutional Investor flows, movements in the rupee for further direction and the decisions of RBI's Monetary Policy Committee meeting.
Essentially, immediate support for Nifty lies in the 23,270-23,250 zone, while on the flipside immediate resistance is placed between 23,530 and 23,550 levels.
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Nifty Bank
"On the daily chart, Bank Nifty has formed a bullish candle with a noticeable lower wick, reflecting buying interest at lower levels. Despite outperforming Nifty during the session, the index continues to trade below key short and long-term moving averages. A strong follow-through buying move will be crucial for the index to sustain and extend its ongoing pullback," said Shah from SBI Securities.
Going ahead, the immediate resistance for Bank Nifty is placed in the 54,600-54,700 zone, whereas the immediate support for the index is placed in the 53,800-53,700 zone.
Market Recap
Indian equity benchmarks resumed losses after a one-day breather, with the NSE Nifty 50 down 77.95 points, or 0.33%, at 23,405.60. The BSE Sensex fell 303.67 points, or 0.41%, to 74,346.17.
ALSO READ: Infosys, Wipro ADRs Slump Up To 4% As Global IT Sell-Off Extends For Second Day
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