The index opened 113 points lower and staged a modest recovery in the first half of the session. However, selling intensified in the afternoon, with the Nifty giving up more than 140 points from the day’s high of 23,571 to finish near session lows.
Persistent weakness in global markets triggered a gap-down opening for Indian equities, with volatility remaining elevated through the session. While bulls attempted to recover lost ground, bears maintained the upper hand and pushed the benchmark closer to the day’s low.
Among Nifty 50 stocks, Adani Enterprises, Max Healthcare and Adani Ports were the top gainers, while Infosys, HDFC Life and HCLTech ended as the biggest laggards.
All sectoral indices closed lower except Nifty Metal. IT, Realty and Financial Services were among the biggest losers.
The broader market also remained under pressure, with the Nifty Midcap 100 and Nifty Smallcap 100 indices falling 0.5% each.
What is weighing on markets?
A sharp rise in global crude prices has renewed concerns over inflation and put pressure on the Indian rupee. The currency depreciated 29 paise to close at 95.11 against the US dollar.
However, intervention by the Reserve Bank of India through onshore dollar sales, along with expectations of central bank sell-buy swaps, helped the rupee pare some of its early losses.
Brent crude crossed the $100-per-barrel mark on Wednesday, its highest level since July, as escalating tensions in the Middle East raised concerns over global oil supplies. Oil prices have surged nearly 43% from their late-June low of $70.14 per barrel.
Nifty outlook
Going ahead, Indian equities are likely to remain under pressure amid weak global cues, elevated crude prices and concerns over supply disruptions following the latest escalation in US-Iran hostilities around the Strait of Hormuz.
Nagaraj Shetti of HDFC Securities said the Nifty’s immediate support at 23,600, which coincided with the previous opening upside gap of June 15, has been decisively breached. The overall chart pattern remains bearish, with the next downside level seen around 23,070, he said.
However, any pullback could face resistance around 23,625.
Osho Krishan of Angel One sees immediate support in the 23,380-23,350 zone. A decisive break below this range could open the door for further weakness towards 23,250-23,200.
On the upside, the bearish gap between 23,570 and 23,630 is expected to act as an intermediate hurdle, while 23,800 remains a key resistance level, Krishan said.
The index also decisively breached the 23,478 support and closed on a weak note, underscoring the persistence of the downtrend, said Nandish Shah of HDFC Securities.
The next major support is now seen at 23,172, while immediate resistance has shifted lower to 23,600, followed by 23,800, Shah added.
LKP Securities’ Rupak De said the Nifty has slipped further with no respite for the market amid heightened uncertainty surrounding the Middle East and rising crude prices.
The index has also fallen below the previous swing low on the daily chart, while the RSI has slipped into oversold territory. Although the trend remains weak, a close above 23,500 on Thursday could trigger a meaningful recovery. On the downside, a fall below 23,400 could trigger further correction, De said.
Bank Nifty outlook
Meanwhile, the banking benchmark also opened with a gap down and attempted to recover from lower levels. However, the pullback was short-lived as selling pressure emerged at higher levels. Bank Nifty closed 0.85% lower.
According to Sudeep Shah of SBI Securities, the 55,900-55,800 zone will be a crucial support area for Bank Nifty. A sustained break below 55,800 could drag the index towards 55,400.
On the upside, 56,800-56,900 is likely to act as an immediate hurdle, while a sustained move above 56,900 could extend the pullback towards 57,300, Shah said.
