The Indian market closed higher today in line with its US peers led by a rally in the IT stocks. Sensex rose 329 points, closing at 81,636, and Nifty added 98 points to settle at 24,968. Despite this upward trend, Nifty faced resistance around the 25,000 mark across the trading session.
Among the Nifty’s top performers were Tata Consultancy Services, Infosys, HCLTech, and Wipro, which rose between 1.5% and 3%, buoyed by positive brokerage outlooks. The Nifty IT index saw a substantial gain of 2.3%, reflecting continued investor optimism in the sector.
In addition to IT advancements, paper stocks clocked a significant rally following the government’s decision to tighten import norms. The move has fuelled expectations of increased domestic demand, causing shares in Tamil Nadu Newsprint and Papers, Malu Paper, West Coast Paper, and JK Paper to jump between 10% and 17%. Meanwhile, capital market-related stocks like BSE Ltd and Angel One saw declines of 2-3%. In individual stock performances, Vodafone Idea rose 5%, and PG Electroplast climbed over 3%, driven by expectations of exiting the futures and options ban list.
Nandish Shah – Deputy Vice President, HDFC Securities said, “Nifty managed to close above its 100 DEMA, which is currently placed at 24,595. Today’s move in Nifty has resulted in to “Double Inside Bar” pattern on the daily chart. This pattern signifies a consolidation phase, and a decisive breakout on either side of this range would confirm a further directional move. The recent swing low of 24,535 is expected to serve as immediate support. On the upside, 24,785 and 24,950 are two key hurdles for Nifty.”
Osho Krishan, Sr. Analyst – Technical & Derivatives, Angel One said, “From a technical perspective, Nifty has established an Inside bar pattern on the daily chart, reflecting an atmosphere of uncertainty during this truncated yet eventful expiry week. On the levels front, the convergence of the 20-DEMA and the upper band of the bullish gap at 24850 is anticipated to function as an intermediate support zone, potentially mitigating any downward movements. This is followed by a critical support level at 24,750 (50% Fibonacci retracement of the recent rally). On the flip side, any sustained move beyond 25000-25050 is likely to restore strength in the index, facilitating a re-test of the significant resistance level at 25150 in the foreseeable future.”
Interestingly, despite the positive movements, the overall market breadth remained weak, with a 4:5 advance-decline ratio indicating more stocks losing ground than gaining. Hero MotoCorp and IndusInd Bank rose by about 1-2%, despite being set for exclusion from the Nifty 50 index. The Nifty Bank index saw a minor decline of 10 points, ending at 55,139, while mid-cap stocks recorded gains, with the index up by 72 points at 57,702. This mixed market response reflects varied investor sentiments and sectoral shifts in the current trading environment.