The domestic equity benchmarks, Nifty 50 and Sensex, entered a phase of consolidation on Thursday, opening nearly unchanged as investor caution set in following recent gains driven by the India-US agreement. This pause comes amid emerging sector-specific concerns that weighed on certain segments of the market.
Market Opening and Broader Indices
The Nifty 50 index commenced trading at 25,755.90, marking a decline of 20.10 points or 0.08%. Similarly, the Sensex opened at 83,757.54, down by 60.15 points or 0.07%. This stagnant opening reflected a consolidation trend at the index level, signaling a breather after the recent upward trajectory.
In the broader market on the National Stock Exchange (NSE), the Nifty 100 index fell by 0.12%. The Nifty Midcap 100 recorded a marginal loss of 0.04%, while the Nifty Smallcap index experienced a more pronounced drop of 0.31%, indicating varied sentiment across market capitalizations.
Sectoral Performance Highlights
Sectoral indices on the NSE displayed a mixed performance. The Nifty Auto index rose by 0.20%, supported by expectations of robust domestic demand. In contrast, the Nifty IT index declined by 0.36%, facing downward pressure, and the Nifty Metal index dropped significantly by 1.71%. Additionally, silver prices witnessed a notable decline, adding to the day's bearish undertones in certain commodities.
Technical Outlook and Analyst Insights
Nifty 50 Perspective by Osho Krishan
Osho Krishan, Senior Analyst of Technical & Derivatives at Angel One, provided insights into the Nifty 50's trajectory. He noted that on Tuesday, the index saw a sharp gap-up opening of approximately 1,200 points, but the absence of follow-up buying led to some cooling off, resulting in a large black-bodied candle on the daily chart.
Despite this formation, prices concluded with strong gains and continued to trade comfortably above key moving averages, suggesting that the overall undertone remains positive. Historically, when markets mark a pivotal low around a major event such as the Union Budget, it often acts as an important medium-term bottom, after which prices tend to ascend.
With major events now behind and following the sharp upmove earlier this week, the index is likely to enter a consolidation phase with an upward bias. Technically, yesterday's rebound was observed precisely from the key 89EMA support near 25,550, which is expected to serve as immediate support. This is followed by a stronger support zone around 25,250, aligning with the 61.8% retracement of the sharp rally from the Budget-day low, the bullish gap area, and the 200DSMA.
As long as these supports hold, the positive bias remains intact. On the upside, the 26,000 mark is viewed as an immediate resistance, followed by a major hurdle around 26,300. Traders are advised to monitor these levels closely and adopt a strategy of buying near supports and booking profits near resistance. While the benchmark index may consolidate in the near term, selective stocks, particularly those benefiting from recent Budget announcements and the India-US trade deal, are likely to continue offering outperformance opportunities.
Stock Recommendations for Thursday
Osho Krishan's Picks
On stocks to consider on Thursday, Osho Krishan of Angel One recommended two stocks: REC Ltd and Gujarat Mineral Development Corporation Ltd (GMDC).
REC Ltd: This stock has witnessed decent buying traction recently and surged towards the 200 DEMA after an extended corrective phase. In recent sessions, a strong rebound from oversold parameters, coupled with positive divergence in price and the 14-day RSI, has reinstated buying momentum. The risk-reward appears favorable, and strong momentum is anticipated in the near term. Hence, a BUY recommendation is given for REC shares around ₹375 with a stop loss of ₹360 and a target of ₹400.
GMDC Ltd: This stock has shown a rebound from the 100 DEMA in recent sessions and surged towards its lifetime high zone. From a technical perspective, the MACD histogram has exhibited a positive crossover from the zero line, suggesting a potential breakthrough from its sloping trendline to enter uncharted territory. Furthermore, the cycle of higher lows structure adds to the buoyant undertone. Hence, a BUY recommendation is provided for GMDC shares around ₹610 with a stop loss of ₹570 and a target of ₹670-680.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. Investors are advised to consult certified experts before making any investment decisions.
