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Market Closing Commentary

Indian benchmark indices witnessed profit booking and traded in a choppy range throughout the session amid heightened volatility due to the weekly Nifty expiry. Although the market opened on a positive note, the benchmark indices failed to sustain early gains and were unable to decisively move above the crucial 24,500 mark, leading to a mild pullback in the latter half of the session. At close, the Nifty 50 declined 0.13% to settle at 24,398, while the Sensex slipped 0.13% to close at 78,180.

On the sectoral front, Nifty IT, FMCG, and select Midcap stocks emerged as the key outperformers, witnessing healthy buying interest during the session. On the other hand, Nifty Realty, Metal, Media, and Energy indices remained under pressure as selective profit booking weighed on these sectors. The broader market also witnessed mild profit booking after the recent rally. The Nifty Midcap 100 index declined 0.30%, while the Nifty Small cap 100 index fell 0.55%, indicating relatively broader weakness beyond the frontline indices.

Nifty Outlook

Nifty traded with high volatility on the weekly expiry session and closed marginally lower around the 24,400 levels. Index formed a small bearish candle in the daily chart as it snapped its four-session winning streak amid profit booking at higher levels. Nifty in line with our expectation tested the immediate resistance area of 24,500-24,600 on Tuesday’s session but failed to sustain at higher levels and witnessed profit booking in the second half of trade.

In the coming sessions, index is likely to consolidate and form a base after 1500 points up move in just five weeks from 23,070-24,530. We expect Nifty to consolidate in the range of 24,200-24,600 in the coming sessions. However, we believe the overall structure is positive, dips towards the 24,200-24,000 should be used to accumulate quality stocks in a staggered manner. On the higher side only a sustained move above 24,600 will signal extended gains towards 24,800 levels being the trendline resistance joining previous major breakdown area.

Bank Nifty Outlook

Bank Nifty formed a bearish candle signaling profit booking at higher levels around last two weeks high as index continues to consolidate around the 58,000 levels amid stock-specific action. A decisive move above the recent swing high of 58,700 will strengthen the bullish setup and can pave the way for an advance towards 59,200 and 60,000 in the coming weeks, which coincide with the 138.2% and 150% external retracement of the previous decline from 57,456 to 52,783. Failure to move above 58,700 will signal extension of the last 8 sessions consolidation in the range of 57,000-58,700.

On the downside, the index has witnessed buying interest around the 57,000–57,500 zone, with the lows of the last three weeks placed in this range, making it a crucial short-term support area. As long as this zone remains intact, the broader positive structure is expected to continue. The overall trend remains constructive, and the ongoing consolidation should be viewed as an opportunity to accumulate quality banking stocks in a staggered manner for the next leg of the up move.

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