- Sensex and Nifty 50 ended mostly flat amid mixed sector performance and IPO activity
- Nifty below 23,100 may trigger fresh selling; resistance seen near 23,380-23,400 zone
- US markets rose with Nasdaq up 1.44%, S&P 500 by 1.06%, and Dow Jones by 0.8%
As domestic equity benchmarks Sensex and Nifty 50 ended majorly flat on Thursday, the Indian stock market's bearish momentum is expected to continue, with a breach below 23,100 likely to indicate renewed selling pressure, according to technical experts.
This comes even as GIFT Nifty trades in green at 23,352, hinting at a possible postive start to the domestic equities on Friday, while US indices were trading higher on Thursday. Nasdaq Composite advanced 1.44% or 375 points to 26,353.61, S&P 500 rose 1.06% or 80 points to 7,632.46, while Dow Jones climbed 0.8% or 412 points to 51,873.9 after the opening bell.
According to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, "The broader trend remains bearish, as the index continues to trade below its key short-term and long-term moving averages. Momentum indicators, however, show signs of stabilization. The daily RSI has rebounded from its recent low of 22.23 and is currently placed at 31.07, suggesting an improvement in short-term momentum."
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In terms of outlook, Shah noted, "Going forward, the 23380-23400 zone is expected to act as an immediate resistance for the Nifty. A decisive move above 23400 would strengthen the ongoing pullback and could pave the way for an extension of the recovery towards the 23550 mark in the near term."
He added, "On the downside, the 23130-23100 zone remains a critical support area. A sustained breach below 23100 would indicate renewed selling pressure and may trigger a fresh round of correction, dragging the index towards the 22950 level in the short term."
On Thursday, equity benchmarks Sensex and Nifty 50 ended largely flat, with gains in Pharma, Realty and auto stocks offsetting pressure from metal and banking stocks. Market sentiment was also aided by heightened activity in the primary market, with IPOs keeping investors engaged, even as the weekly expiry of Sensex contracts added to trading activity. Nifty 50 closed 0.23% higher at 23,270.60, while the BSE Sensex ended marginally lower (0.03%) at 74,314.59.
Broaders markets ended higher. Nifty SmallCap 100 index rose 0.76%, while Nifty MidCap 100 index gained 0.92%. Except Banks, Metal and Oil and Gas indices, all sectors ended in the green territory. Nifty Pharma and Realty indices were top gainers, up over 1.5% each.
The recent pullback has been insufficient to restore confidence for fresh bullish trades in the index, according to Nandish Shah, Deputy Vice President of HDFC Securities. "Immediate resistance now lies at 23,360, with a stronger positional resistance near 23,600. On the downside, the 23,070–23,100 band remains the key support zone," he said.
Bank Nifty Outlook
Bank Nifty saw profit booking after touching an intraday high of 56570, resulting in a correction of more than 500 points from the day's peak.
From a trend perspective, Sudeep Shah notes that the index continues to trade below its key short-term and long-term moving averages, highlighting a cautious undertone. Meanwhile, momentum indicators remain largely neutral, suggesting that the index is currently consolidating within a broad range rather than exhibiting a strong directional bias.
In terms of outlook, Shah said, "Going forward, the 55600-55500 zone is expected to serve as a crucial support area, as the 50% Fibonacci retracement of the previous upward rally is positioned within this range. Holding above this support band will be important for maintaining the ongoing consolidation structure."
He added, "On the upside, the 56500-56600 zone remains a key resistance. A decisive breakout above 56600 could improve near-term sentiment and trigger a fresh leg of recovery. Until then, Bank Nifty is likely to remain range-bound, with traders closely monitoring the 55500 support and 56600 resistance levels for the next directional move."
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