Trade Setup for March 4: Expiry saved Nifty the blushes, but for how long?

Indian equities kicked off the truncated week under pressure, with the Nifty ending below the 25,000 mark after a volatile session.

The index opened with a sharp gap down of nearly 500 points amid geopolitical concerns but recovered part of the losses in the latter half of the day after finding support near the 24,600 zone, close to its Budget-day low.

Although the Nifty rebounded nearly 250 points from the day's bottom after 2 pm, it still settled 312 points lower.

Among index heavyweights, Bharat Electronics and Hindalco Industries bucked the broader trend to emerge as top gainers, while InterGlobe Aviation and Larsen & Toubro weighed on the benchmark.

Market breadth remained firmly negative. Except for Nifty Metal and Nifty Pharma, all major sectoral indices closed in the red. Consumer Durables and Oil & Gas were among the worst hit segments.

The weakness extended to the broader market as both midcap and smallcap indices ended lower. Indian markets will remain shut on Tuesday due to a public holiday.

Technically, Nagaraj Shetti of HDFC Securities said the underlying trend remains weak, with any rebound likely to face stiff resistance around 25,100.

He warned that a break below 24,600 could expose the index to further downside towards 24,300.

Nilesh Jain of Centrum Finverse also identified 24,600 as a crucial support level, adding that a decisive breach may drag the index towards 24,200.

On the upside, he sees 25,000 as immediate resistance, with a move above that potentially triggering short covering towards 25,200.

Rupak De of LKP Securities echoed similar views, citing that the gap-down opening was triggered by developments in the Middle East.

He said sentiment is likely to remain bearish unless the Nifty sustains above 25,000, while a breakdown below 24,600 could lead to a deeper correction.

The Bank Nifty mirrored the broader weakness at the open but found support near its 100-day EMA, enabling a gradual recovery through the session. The index closed at 59,840, down 1.14%.

Sudeep Shah of SBI Securities said the 59,400-59,300 zone will be critical support for Bank Nifty.

A sustained move below 59,300 could accelerate declines towards 58,800 and then 58,300. On the upside, the 60,300-60,400 band is expected to act as immediate resistance, with a decisive breakout above 60,400 needed to restore positive momentum.

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