Indian equity markets ended on a weak note on Monday, with both benchmark indices closing in negative territory amid cautious and range-bound trading. The BSE Sensex dropped by 384.55 points to settle at 81,748.57, while the NSE Nifty slipped by 100.05 points, closing at 24,668.25. The market witnessed broad-based selling, with only nine Nifty stocks advancing against 40 declines, indicating a bearish sentiment.
Market Highlights
Among the gainers on the Nifty, Dr. Reddy’s Laboratories, IndusInd Bank, HDFC Life, Power Grid Corporation, and Bajaj Finance managed to post gains despite weak overall market sentiment. On the other hand, major laggards included Titan, Hindalco, Adani Ports, TCS, and Tech Mahindra, which weighed down the indices.
Technical Insights
Rupak De, Senior Technical Analyst at LKP Securities, observed that the Nifty index traded within a narrow range of 24,600 to 24,800 during the session, reflecting indecision among investors.
“The short-term sentiment for Nifty remains optimistic as the index sustains above its critical moving average on the daily timeframe,” he stated. He further added that on the higher side, Nifty could test levels of 25,000 and beyond, provided the momentum continues. On the downside, 24,500 has been identified as a crucial support level, offering a buffer against further declines.
Despite the negative close, analysts believe the market is showing resilience and remains supported by positive sentiment in the short term. However, broader caution prevails, given the limited advances among Nifty constituents.
Key Factors Driving Market Sentiment
- Global Market Trends: Investors kept a close watch on global market cues ahead of the U.S. Federal Reserve’s meeting scheduled to begin on Tuesday. Expectations of a 25-basis-point rate cut are influencing market sentiment across global markets.
- Range-Bound Trading: The Indian stock market remained range-bound during the session, with indices struggling to break through key resistance levels. This was largely due to investor caution amid mixed signals from domestic and international markets.
- Sectoral Performance: Most sectors traded in the red, with IT, metals, and consumer durables witnessing notable declines. Banking and pharma sectors provided some support but were not enough to offset the losses in other areas.
Short-Term Outlook
While Monday’s session ended on a negative note, analysts suggest that the broader market trend remains stable in the short term. If Nifty holds above the critical support level of 24,500, the index has the potential to test and surpass 25,000 in the coming sessions.
Investors are advised to remain cautious as market movements could be influenced by key events, including global central bank policies and domestic macroeconomic indicators.
Factors to Watch
- Federal Reserve Meeting: Global markets, including India, are anticipating announcements from the Federal Reserve, with a focus on potential rate cuts.
- Domestic Data: Economic indicators such as inflation and industrial production will be closely monitored to gauge the strength of India’s economy.
- Sectoral Cues: IT and metal stocks, which faced significant pressure during Monday’s session, will be key sectors to watch in the coming days.
Investor Strategy
Given the current market dynamics, experts recommend a cautious approach. Investors should focus on fundamentally strong stocks and track key support and resistance levels. Keeping an eye on global developments and domestic earnings trends will be crucial for making informed decisions.
Conclusion
The Indian stock market’s weak performance on Monday reflects cautious sentiment among investors amid mixed domestic and global signals. While the broader trend remains optimistic in the short term, market participants should tread carefully, given the ongoing volatility. Key resistance and support levels on the Nifty, coupled with upcoming global and domestic events, are expected to dictate market movements in the coming sessions.