Profit booking ends 7-day winning streak, Nifty tests key support levels

Stock market closing bell: The Indian equity markets witnessed profit booking after the recent gains, leading to a loss of the 7-day winning streak by the benchmark equity indices, largely driven by weak global sentiment.

 

The BSE Sensex, after scaling a day’s high of 78,167.87, settled at 77,288.50, down 728.69 points or 0.93 per cent from its previous close. Similarly, the NSE Nifty50 settled 181 points or 0.77 per cent lower at 23,486.85. 

Barring IndusInd Bank, Power Grid Corp, Titan Company, and Mahindra & Mahindra, all other 26 constituent stocks of the BSE Sensex settled in the red, with losses extending up to 3.45 per cent on Wednesday.

 

The profit booking among the broader markets was seen more in the small-cap shares, as the Nifty Smallcap100 index settled down by 1.07 per cent. The Nifty Midcap100 index also ended lower by 0.62 per cent.

 

The sectors with higher exposure to the US market, such as pharma and IT, witnessed some selling pressure. Barring Nifty Auto, all the other indices on the NSE ended lower.  Among them, the Nifty PSU Bank, IT, Financial Services, Healthcare, Realty, and Oil & Gas indices settled down by over 1 per cent each. Notably, the Nifty Auto managed to eke out marginal gains of merely 0.02 per cent.

 

The market experienced profit booking after the recent gains, on the back of next week's US tariff announcements, said Vinod Nair, Head of Research at Geojit Investments. "With the onset of FII inflows, revival in domestic fundamentals, and favorable valuations, the market is expected to trade with more stability," said Nair.

 

Nifty50 sees support at 23,300.

Commenting on the technical outlook for Nifty50, Rupak De, Senior Technical Analyst at LKP Securities, said that on the smaller time frame, the index has dropped below the near-term moving average. "The trend looks bearish, with a negative crossover in the RSI (14) on the hourly time frame. On the lower end, support is placed at 23,300, up to which the current decline might extend," said De.

 

However, any fall below 23,300, De believes, might raise questions about the recent sharp rally from 21,964. Resistance is placed at 23,550, above which sentiment might improve.

 

Technically, on the daily chart, Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C Mehta Investment Intermediates, said that Nifty formed a red candle, indicating weakness. Moreover, the index has broken its 100-Day Simple Moving Average (100-DSMA), which is placed near 23,500 and will now serve as an immediate hurdle for Nifty, followed by 23,800.

 

"On the downside, the 100-Day Exponential Moving Average (100-DEMA) support is placed near 23,390, while the 75-DEMA is positioned near 23,250, acting as key support levels for the index," said Yedve.

 

Due to the F&O expiry, Yedve expects short-term volatility in the markets, and traders to remain cautious.