4 weeks ago
After a brief pause on Tuesday, bulls regained momentum on Wednesday as the Indian equity market moved higher in the second half of the session and ended at the day's high. Buying picked up after the GST Council's decisions, lifting the Nifty above 24,700.
The Nifty staged a strong comeback, recovering all the losses from Tuesday's session. Despite a choppy start in the morning, the index managed to hold above the previous day's low and gained strength in the latter half. This also marked the third straight session where the index registered a higher low, indicating underlying resilience.
The session opened on a mildly positive note, but trading remained rangebound in the first half. Unlike the previous day, steady buying emerged in the second half, driving the index past 24,700. The Nifty eventually closed at the day's high of 24,715, up 0.55%.
Leading the charge within the Nifty pack were Metal heavyweight stocks like Tata steel, Hindalco, JSW Steel and Coal India. On the flip side, it proved to be a tough session for names such as Infosys, Nestle, and HDFC Life, which ended as major losers amongst the Nifty pack.
The rally was notably widespread across sectors. Barring Nifty IT and Media, all other sectoral indices ended the day in the green. Among the gainers, Nifty Metal, Pharma, Healthcare, and PSU Banks led the way.
Nifty Metal index gained 3.1%, aided by China’s plans to cut steel production between 2025-26 and a weaker US dollar.
The positive sentiment was also evident in the broader market, which continued to outperform the benchmark. The Nifty Midcap 100 Index gained 0.65%, while the Nifty Smallcap 100 Index surged 0.9%.
Going ahead, investors remain focused on the outcome of the two-day GST Council meeting amidst expectations of potential rate rationalisation, which could benefit key sectors such as automobiles, hotels, cement, and consumer durables.
According to Siddhartha Khemka of Motilal Oswal, Indian markets are likely to remain range-bound, tracking global cues and sector-specific developments, with policy decisions from the GST Council acting as the immediate catalyst.
Nandish Shah of HDFC Securities said that the short-term trend of the Nifty has turned positive as the index closed above its 5-day EMA placed at 24,648. He added that a decisive move above the 20-DEMA (24,735) and 50-DEMA (24,793) could bring the index back into bullish momentum, with support shifting higher to 24,500.
On the daily chart, the Nifty has closed just below the 20-DEMA, which acted as resistance on Tuesday. A sustained move beyond 24,750-24,800 would open the way for the bulls to target 24,900-25,000, and if supported by global and domestic cues, especially the GST Council outcome, the index could extend towards 25,200 and higher in the near term, said Rajesh Bhosale of Angel One.
On the downside, matching lows around 24,500 provide immediate support, while the 24,400-24,350 zone remains critical, Bhosale added.
Rupak De of LKP Securities said that the index recovered after holding above 24,500, rallying towards 24,750. However, on the higher side, it faced resistance at the 200-hourly moving average.
Technically, he said, the index remains bearish as it continues to trade below the 21-EMA on the daily timeframe. A decisive move above 24,750 could trigger a stronger rally towards 25,000, while support is placed at 24,650, with a break below this level potentially dragging the Nifty back to 24,500.
Meanwhile, the Nifty Bank gained 407 points to settle at 54,068.
Going forward, a move above Tuesday's high of 54,160 would open further upside towards the key breakdown zone of 54,800-55,000, Bajaj Broking said. Overall, the brokerage expects the index to extend its consolidation in the 53,300-55,000 range in the coming sessions.
