The Indian stock markets are likely to open lower amid fresh US strikes on Iran after drone strikes on commercial vessels in the Strait of Hormuz. GIFT Nifty also indicates a gap-down start, trading at 24,239.5 with a discount of 144 points from its previous Nifty futures close.
Late profit-booking on Tuesday dragged Indian equities down, wiping out early morning gains. The Sensex shed 104.35 points to settle at 78,180.72, while the Nifty 50 slipped 0.13% to close just below the key 24,400 mark.
Mid-cap and small-cap stocks faced heavier selling pressure, dropping 0.4% and 0.55% respectively. On the institutional side, foreign investors bought a net Rs 393.19 crore in cash markets, which almost entirely offset the Rs 383.43 crore sold off by domestic institutions.
Technically, the Sensex formed a bearish candle on the daily chart, indicating further weakness from the current levels.
“For day traders, 77,700 will act as a crucial support zone. Above these levels, Sensex could retest 78,400-78,600. On the flip side, if the index falls below 77,700, it could witness a sharp intraday dip towards 77,400-77,100,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.
Nifty 50 has entered a consolidation phase after an impressive rally of nearly 1,500 points over the past five weeks.
"We believe the overall structure is positive, dips towards the 24,200-24,000 should be used to accumulate quality stocks in a staggered manner. On the higher side, only a sustained move above 24,600 will signal extended gains towards 24,800 levels, being the trendline resistance joining previous major breakdown area," said Bajaj Broking Research.
The brokerage expects the Nifty to trade within the 24,200-24,600 range over the coming sessions. A decisive breakout above 24,600 could pave the way for a move towards 24,800, while the 24,200-24,000 zone is likely to act as a key support area.
On Tuesday, Bank Nifty declined 90.80 points or 0.16% to close at 58,200.70, forming a bearish candle on a daily chart.
"A decisive move above the recent swing high of 58,700 will strengthen the bullish setup and can pave the way for an advance towards 59,200 and 60,000 in the coming weeks, which coincide with the 138.2% and 150% external retracement of the previous decline from 57,456 to 52,783. Failure to move above 58,700 will signal extension of the last 8 sessions consolidation in the range of 57,000-58,700," said Bajaj Broking.
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