The index held above Tuesday’s low and managed a modest recovery after witnessing a deep cut from the day’s highs in the previous session. The recovery was supported by buying in select heavyweight stocks, although gains remained volatile amid elevated crude prices, global uncertainty and caution ahead of the US Federal Reserve’s policy decision.
The Sensex also ended higher, closing at 74,336.45, up around 0.45%.
Among Nifty 50 constituents, SBI Life, HDFC Life and ITC were the top gainers. On the other hand, TCS, Wipro, Infosys and Tech Mahindra, which had gained strongly in the previous session, came under profit booking and emerged as the top laggards.
On the sectoral front, FMCG, PSU Banks and Realty led the gains, while IT, Healthcare and Pharma ended under pressure. Nifty IT continued to remain weak, with profit taking seen in technology stocks after their recent gains.
Broader markets remained subdued and continued to underperform the Nifty 50. The Nifty Midcap 100 ended almost flat, gaining 0.01%, while the Nifty Smallcap 100 declined 0.18%. The Nifty Microcap 250 also fell 0.14%, indicating continued pressure in the broader market amid profit booking in momentum-driven counters.
Going ahead, Indian equities are likely to remain cautious amid elevated crude prices, continued foreign institutional investor selling and uncertainty ahead of the US Federal Reserve’s policy decision. Brent crude remains above $108 per barrel, near a four-month high, while the US 10-year Treasury yield has crossed 5%, keeping inflation and interest-rate concerns elevated.
Nagaraj Shetti of HDFC Securities said the Nifty is placed near important lower supports around 23,100-23,000 levels, although there are no signs of a strong upside recovery from the lows.
Shetti said the present bounce is expected to form another lower top around the 23,400-23,500 resistance zone. However, a slide below 23,000 could trigger another round of sharp weakness.
Sudeep Shah of SBI Securities said the 23,070-23,050 zone is expected to act as a crucial support area. A sustained breach below 23,050 could intensify selling pressure towards 22,900 levels. On the upside, 23,350-23,370 is likely to act as an immediate hurdle. A sustained move above 23,370 could trigger short covering and extend the pullback towards 23,500 levels.
Vinay Rajani of HDFC Securities said the Nifty found support near the previous day’s low and formed a Harami candlestick pattern on the daily chart. The formation could pave the way for a short-term pullback within the broader downtrend.
Rajani said that the index has declined more than 1,650 points from its August high of 24,772, pushing short-term oscillators into oversold territory. He said the possibility of a recovery cannot be ruled out, with the Nifty potentially rebounding towards the 23,500 resistance zone if it holds above the recent swing low near 23,100. However, a break below 23,100 could drag the index towards the positional support of 22,700.
Ajit Mishra of Religare Broking said markets are likely to react to the outcome of the US Fed meeting and its commentary in early trade on Thursday.
Technically, Mishra said the Nifty’s recovery above 23,200 provides some near-term relief, although the broader structure remains weak. The index is likely to face immediate resistance around 23,400-23,600, while 23,000-23,100 remains the crucial support zone. A sustained move above 23,600 would be required to signal a meaningful improvement in momentum.
Amid the prevailing uncertainty, Mishra recommended maintaining a cautious stance with a hedged approach and selective exposure.
