Nifty is expected to remain in consolidation mode due to the absence of significant positive triggers, as analysts observe. The benchmark index closed in a doji candle within an inside range, with key support levels at 24,200 on Tuesday. Sector-wise, all sectors lagged, except for consumer durables and healthcare, which remained positive. On the stock-specific front, sugar stocks surged following speculation of an ethanol price hike.
The market is expected to continue its consolidation mode due to a lack of major positive triggers, according to Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd. "However, investors should view this dip as a buying opportunity in quality stocks, particularly large-cap stocks where valuations are still attractive," he said.
"Indian market participants will be closely watching the WPI and manufacturing inflation data set to be released tomorrow," said Avdhut Bagkar, technical and derivatives analyst at StoxBox.
Rajesh Bhosale, Equity Technical Analyst at Angel One, pointed out that recent sessions have seen prices struggling around the 20-day esponetial moving average, or EMA. He anticipates that Nifty may test the 50-day EMA support in the 24,040–24,000 range and could potentially dip below the recent low of 23,900.
"With the upcoming weekly expiry for both Nifty and Bank Nifty, increased volatility is expected. Traders should avoid complacency, keep positions light, and prepare for potential market fluctuations ahead of the mid-week holiday," Bhosale said. "Conversely, the 24,350–24,500 range remains a critical hurdle; only a breach beyond this range would likely favour bullish momentum," he said.
Bank Nifty witnessed a sharp bounce from its support of 50,200 levels and closed flat to positive, driven by momentum in private banks.
"The first band of resistance (for Bank Nifty) is at 51,300 levels, which is the band of averages for an upward breakout; the trend reversal is placed at 49,800 levels. RSI is piercing upwards to cross its average line and will build positive momentum on the crossover of the same in the next few days," according to Vikas Jain, head of research at Reliance Securities.
Market Recap
The benchmark equity indices ended lower for the second consecutive day to log their worst session since Aug. 5 as shares of banks weighed on them. The NSE Nifty 50 closed 208 points or 0.85%, down at 24,139.0 and the S&P BSE Sensex ended 692.89 points or 0.87%, lower at 78,956.03.
During the day, both the Nifty and the Sensex fell as much as 0.95% to 24,116.50 and 78,889.38, respectively.
The broader markets underperformed the benchmark indices as the BSE MidCap and the SmallCap settled 0.94% and 1.14% lower, respectively.
On the BSE, 19 out of 20 sectoral indices ended lower and one advanced. Commodities declined the most, while consumer durables emerged as the best-performing sector.
The market breadth was skewed in favour of the sellers as 2,657 stocks declined, 1,282 rose and 87 remained unchanged on the BSE.
Money Market
The Indian rupee closed flat against the US dollar on Tuesday after opening stronger amid a steady dollar and easing crude oil prices.
The rupee closed flat after appreciating two paise to Rs 83.95 in the morning against the US dollar. It had closed at Rs 83.97 on Monday.
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