The Indian markets are likely to open on a cautious note amid mixed cues from global markets. GIFT Nifty indicates a slightly lower start, trading at 23,151 with a discount of 24 points from its previous Nifty futures close.
On Monday, the Sensex fell 719.08 points or 0.97% to close at 73,524.26, while the Nifty 50 declined 243.70 points or 1.04% to settle at 23,123.
The Indian rupee opened higher at Rs. 95.48 per dollar on Tuesday, up from the previous close of Rs. 95.71.
Foreign investors (FIIs) net sold shares worth Rs. 5,556 crore, while domestic institutional investors (DIIs) net bought shares worth Rs. 5,165 crore on June 8.
Technically, the Sensex formed a short-bodied green candle with a long upper shadow on the daily chart, indicating weakness from the current levels.
“As long as the Sensex is trading below 73,800, weak sentiment is likely to continue. On the downside, 73,000 would be the immediate support zone. Further downside may also continue, which could drag the index to 72,500. On the flip side, above 73,800, the pullback move could extend to 74,000 - 74,300,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.
Technically, the Nifty 50 formed an inverted hammer-like candlestick on the daily chart, indicating a failed recovery after a gap-down opening and sustained selling pressure at higher levels.
According to Bajaj Broking Research, the index has approached a crucial support zone of 23,000-23,200, which coincides with the 8th April bullish gap area and the 61.8% retracement of the previous upward move (22,182-24,601).
"Index holding above the support area will lead to consolidation in the range of 23,000-23,550 in the coming sessions. A breach below 23,000 will signal extension of the current decline towards 22,800 and 22,600 levels in the coming sessions," said the brokerage.
On the upside, immediate resistance is placed at 23,267, and a breakout above this level could open the path towards 23,500-23,550.
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On Monday, the Bank Nifty fell 432.50 points, or 0.79%, to close at 54,063.75, forming a small-bodied candle on the daily chart, reflecting profit-booking and supply emerging at higher levels.
or a decisive breakout or breakdown to establish
The index is expected to trade in a broader range of 52,500-56,000, with traders watching flish the next directional move.
"While key support is placed at the 53,000-52,500 zone, being the confluence of the lower band of the 8th April bullish gap area and the 61.8% retracement of the previous pullback (49,955-57,456). Resistance is placed at 55,200-55,600 levels, being the confluence of the 50-day EMA and the upper band of the last three weeks' consolidation," noted Bajaj Broking Research.