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The Indian stock market witnessed another session characterized by volatility, as the Nifty 50 index navigated through fluctuating sentiments ahead of the release of crucial Consumer Price Index (CPI) data. Investors remained cautious, exhibiting a neutral stance in anticipation of the Nifty weekly expiry, further contributing to the market's uncertainty. Despite opening on a positive note, the market experienced a decline during the initial and mid-session phases, only to recover later in the day, mirroring the prevailing trend. The 22,300 level once again proved to be a significant support level for the Nifty, triggering an upward recovery towards the latter part of the session. Ultimately, the Nifty closed with minor losses, albeit significantly above its intraday lows, concluding the day 27 points lower at 22,471. The broader market mirrored the weakness observed in the Nifty, with the Nifty Midcap100 and Smallcap100 indices declining by 0.6% and 0.2%, respectively. Among the various sectors, the Nifty IT sector experienced the most significant decline, falling by 3% and emerging as the top sectoral loser. Conversely, financial stocks demonstrated resilience, outperforming other sectors and providing support to the Nifty Bank index, which managed to stay in positive territory. HDFC Bank and Kotak Mahindra Bank emerged as the primary contributors to the index's resilience. IndusInd Bank shares exhibited a minor recovery after experiencing a sharp decline in early trading, with the stock falling as much as 7% before rebounding from its lows. At its lowest point on Wednesday, IndusInd Bank's market capitalization briefly dipped below ₹50,000. It is important to note that the stock is currently under the F&O ban, which restricts the creation of new positions in the stock. Shares of Tata Motors Ltd. experienced buying interest on Wednesday following an analyst meeting where the company's CFO provided reassuring remarks regarding the company's future prospects as a passenger and commercial vehicle manufacturer. The stock reversed a two-day losing streak as a result. Tata Motors' CFO assured analysts that Jaguar Land Rover (JLR) would meet its fourth-quarter EBIT margin guidance of 10% and that the company would achieve net debt-free status by the end of the fiscal year. Thursday's trading session will coincide with the weekly options expiry day, adding another layer of complexity to market dynamics. In the United States, consumer prices increased less than expected in February, although this improvement is likely to be temporary due to the anticipated impact of aggressive tariffs on imports, which are expected to raise the costs of most goods in the coming months. India's retail inflation eased to a seven-month low of 3.61% in February 2025, down from 4.31% in January. The industrial output growth exceeded expectations, reaching 5% YoY in January 2025, compared to 3.2% in December. These factors are expected to infuse some positive sentiment into the markets on Thursday. According to Nagaraj Shetti of HDFC Securities, the underlying trend of the Nifty is range-bound. A decisive move above 22,700 levels could potentially open further upside towards 23,200 levels. However, immediate support is placed at 22,300 levels. Rupak De of LKP Securities noted that the index remained above 22,300 throughout the day. A multiple-bottom formation is observed around 22,300, making this level a crucial short-term support. On the higher end, the index faces resistance at 22,500/22,600. Devarsh Vakil of HDFC Securities suggested that a move above 22,677 could trigger a further rally toward the next resistance level at 23,000. On the downside, the support band between 22,245-22,300 is likely to continue providing a floor for the Nifty.
The Nifty Bank index concluded the session at 48,056.65, up 0.42%, but continues to fluctuate around the 48,000 zone without demonstrating a clear directional trend. The daily Relative Strength Index (RSI) remains below 40, while the Moving Average Convergence Divergence (MACD) continues to signal a negative crossover, indicating weak momentum. The 9-EMA at 48,380 serves as immediate resistance, and a breakout above this level is crucial to initiate a meaningful pullback. On the downside, support is placed at 47,700, with a potential decline toward 47,500 if this level is breached, according to Om Mehra of SAMCO Securities. Mehra further noted that the banking sector exhibited a mixed response, with the Nifty Private Bank index closing in positive territory while the Nifty PSU Bank index ended lower. He suggested that the Nifty Bank may undergo further time correction before establishing a decisive trend. Market participants are closely monitoring the upcoming CPI data release, as it is expected to provide further clarity on the inflation outlook and potentially influence the market's direction. The combination of domestic and global economic factors, coupled with technical indicators, is shaping the current market landscape, creating both opportunities and challenges for investors. The upcoming weekly options expiry will likely add another layer of volatility to the market, requiring traders to exercise caution and implement appropriate risk management strategies. Overall, the Indian stock market remains in a state of flux, with investors carefully evaluating various factors before making investment decisions. The Nifty's range-bound movement reflects the prevailing uncertainty, while the performance of individual sectors and stocks highlights the importance of selective stock picking. The release of CPI data and the upcoming options expiry are expected to be key catalysts that will influence the market's direction in the near term. The interplay of technical and fundamental factors is creating a complex and dynamic trading environment that requires a disciplined and informed approach.
In summary, the market's behaviour reflects a complex interplay of factors. The Nifty 50 experienced a volatile session, ultimately closing slightly lower, as investors remained cautious ahead of the CPI data release and weekly options expiry. Key support levels held, particularly around 22,300, triggering intraday recoveries. The broader market exhibited weakness, with the midcap and smallcap indices declining, while the IT sector faced significant losses. Financial stocks, especially HDFC Bank and Kotak Mahindra Bank, provided crucial support to the Nifty Bank index. Individual stock performances varied, with IndusInd Bank recovering from a sharp decline and Tata Motors gaining ground after positive analyst commentary. Technical indicators suggested a range-bound market for the Nifty, with potential upside above 22,700 and downside support around 22,300. The Nifty Bank index remained indecisive, fluctuating around the 48,000 level, with technical signals indicating weak momentum. The banking sector displayed a mixed performance, with private banks outperforming PSU banks. Market analysts highlighted the importance of monitoring key support and resistance levels, as well as the impact of the upcoming CPI data and options expiry. The market's overall sentiment reflected a degree of uncertainty, prompting investors to adopt a cautious approach. The interplay of domestic and global economic factors, coupled with technical indicators, continues to shape the market landscape, creating both opportunities and risks for investors. Therefore, prudent risk management strategies are essential for navigating the current market conditions.