Stock market closing bell: IT defies market trends, benchmarks settle flat

Stock market closing bell: Benchmark Indian equity indices erased their early gains but managed to settle in the green, marking their 7th consecutive session of gains backed with the gains in the IT stocks on Tuesday. After a 5-day rally, the Mid and Smallcap shares witnessed profit booking, dragging the Nifty Midcap100 and Nifty Smallcap100 indices down by over 1 per cent each. 

 

The 30-share Sensex, after scaling an intra-day high of 78,741.69, took a retreat to settle at 78,017.19, up merely 32.81 points or 0.04 per cent from its previous close. Similarly, the NSE Nifty50 also settled on a flat note at 23,668.65, up marginally by 10.30 points or 0.04 per cent. 

 

The IT sector defied the market's trend by adding gains, driven by positive global cues stemming from expectations of softer tariffs and a recent correction in valuations. The Nifty IT index settled higher by 1.32 per cent, led by Persistent Systems and Coforge, which ended with gains of over 2 per cent each.

 

Consumer durables, on the other hand, were the top laggards as the Nifty Consumer Durables index ended down by 1.93 per cent, dragged by Dixon Technologies and Rajesh Exports, which ended down by 7.12 per cent and 5.38 per cent, respectively. Barring Nifty Financial Services, and Nifty Private Bank indices, all other sectoral indices settled in red.

 

Investors to remain cautious

In the near term, Vinod Nair, Head of Research at Geojit Investments, expects investor sentiment to be cautious as they await clarity on the trade policy between the US and India. Meanwhile, attention is shifting towards the quarterly results, which are anticipated to shed light on the recovery in earnings growth. "Favorable indicators, such as expected rate cuts and rupee movements, continue to support market sentiment," said Nair.

 

Echoing similar views,  Prashanth Tapse, senior VP (Research), Mehta Equities, said that investors traded with caution ahead of F&O expiry, with selling seen in banking, realty, oil & gas and metal shares. While markets, Tapse said, markets were largely range-bound with a negative bias after an initial upsurge, benchmark Sensex finally closed above the crucial 78k mark with a modest gain amid buying in technology stocks. 

Nifty faces resistance 23,800

The Nifty, Rupak De, Senior Technical Analyst at LKP Securities, said faced resistance at the previous swing high, leading to a volatile session before closing slightly lower. "On the downside, support is observed around 23,300, which is a congestion level, with the 100-EMA also placed near this level," said De.

 

As long as the Nifty remains above 23,300, De anticipates a consolidation phase within a broader range of 23,300 to 23,800. Immediate support, he believes, is placed at 23,600, and a decisive drop below this level could drive the index toward 23,300. On the upside, resistance is at 23,800, and a breakout above this level may resume the rally. 

Technically, on the daily chart, Nifty formed a red candle with a long upper shadow, indicating selling pressure at higher levels, said Hrishikesh Yedve, AVP technical and derivatives research at Asit C Mehta Investment Interrmediates.   Moreover, the index failed to sustain above the 23,810 hurdle, suggesting weakness. However, it is still holding above the 100-Days Simple Moving Average (100-DSMA), placed near 23,500, which, Yedve believes, will act as immediate support. A breakout above 23,810, he said, could drive the Nifty towards the 24,080 levels, where the 200-DSMA is positioned, while sustaining below 23,500 could lead to further weakness towards the 23,300–23,200 range.