Indian equity benchmarks kicked off Wednesday's trading session on a cautious note, surrendering early gains as heightened geopolitical tensions and concerns over global tariffs cast a shadow over corporate earnings prospects. This bearish sentiment kept the key indices, the Sensex and the Nifty, trading below their recent record peaks.
Market Opens in the Red Amid Foreign Fund Selling
At the opening bell, the BSE Sensex declined by 112 points, or 0.13%, to settle at 84,952. Similarly, the broader NSE Nifty 50 index dropped 56 points, or 0.22%, to 26,122. This subdued start followed a negative close in the previous session, where the Sensex had fallen 376.28 points (0.44%) to 85,063.34 and the Nifty had slipped 71.60 points (0.27%) to 26,178.70.
A significant factor weighing on market sentiment was the continued selling by foreign institutional investors (FIIs). Data from the exchanges revealed that FIIs were net sellers of Indian equities worth ₹107.63 crore on Tuesday. However, domestic institutional investors (DIIs) stepped in to provide a cushion, purchasing shares worth a substantial ₹1,749.35 crore, which helped limit the downside.
Expert Market Outlook: Nifty Bias Turns Sideways to Negative
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities, provided a detailed technical perspective on the market. He noted that the Nifty has shown a pattern of giving up 60-70% of its previous upward move after hitting a new lifetime high. Pressure from heavyweight stocks like Reliance and HDFC Bank led to profit booking, causing the index to close below the 26,200 mark despite positive global cues.
Thakkar stated that the short-term bias for the Nifty remains sideways to negative until it decisively crosses the 26,300 level. On the downside, support is seen at 26,000, and a break below that could see the index slip back to 25,700. He also highlighted that the India VIX, a fear gauge, has started to climb and could potentially reach 12-13% levels ahead of the budget, a period when volatility typically rises by over 20%.
Stocks to Buy: ICICI Securities' Near-Term Recommendations
Jay Thakkar of ICICI Securities recommended three stocks for the near term, providing specific entry levels, stop-losses, and targets.
Marico: Thakkar advises buying Marico in the range of ₹775-785, with a stop loss at ₹755 and targets of ₹810-825. The stock has broken out from a prolonged sideways consolidation, accompanied by an increase in open interest in the futures segment, signaling a near-term long buildup. Strong put writing at lower strikes (770-740) indicates solid support.
Tata Elxsi: The recommendation is to buy Tata Elxsi between ₹5530-5540, with a stop loss at ₹5400 and targets of ₹5700-5800. The stock witnessed a sharp bounce from short-covering and, after a brief consolidation, has broken out on the upside again, suggesting it is poised to catch up on the rally it missed in recent months.
Bajaj Auto: Investors can consider buying Bajaj Auto in the range of ₹9320-9640, with a stop loss at ₹9490 and targets of ₹9800-9950. The stock has broken out from an ascending triangular pattern, with a decrease in open interest indicating short-covering. Having underperformed its peers since mid-August, the stock is now seeing fresh buying interest.
Disclaimer: The views and recommendations are those of the individual analyst. Investors are strongly advised to consult certified experts before making any investment decisions, as market conditions are dynamic.
