The Indian stock market continued to bleed on Wednesday, with Nifty extending losses for the seventh consecutive session as oil prices inched higher after Trump claimed the US is not engaged in any peace talks with Iran.
Sensex lost around 326 points to close below 76,910, while Nifty 50 dropped nearly 77 points to end the session at 24,078 on Wednesday. Broader markets also continued to record losses, with Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 0.5%.
Power Grid shares dropped 2% to lead losses on Sensex, while Bajaj Finance, L&T and ITC shares fell more than 1% each to follow. Bucking the trend, HCL Tech shares gained 2% to lead gains on the benchmark index, while Eternal, Kotak Mahindra Bank and Sun Pharma shares rose over 1% each.
Among the sectors, Nifty IT gained more than 0.7%. The overall market breadth remained negative, with NSE seeing 2,173 declines against 1,320 advances, while 116 stocks remained unchanged.
What lies ahead for Dalal Street?
The ongoing mild weakness in the market is driven mainly by two factors - one, the rising crude prices, and two, appreciating bond yields globally, VK Vijayakumar, Chief Investment Strategist at Geojit Investments noted. He highlighted that crude prices have been responding to news from the Middle East for many months since the start of the war. Now, there is total uncertainty about the outcome of this conflict. Crude prices are rising anticipating the continuation of the uncertainty.
Meanwhile, fears of rising inflation are pushing bond yields higher. The US 30-year yields are at their highest levels since 2007. This is not a favourable setting for the equity market, Vijayakumar pointed out. Bond yields are rising in Japan and Germany, too. Yet, the Indian market has not corrected sharply since the fundamentals are strong and getting stronger, he said, adding that the prospects for GDP growth and earnings growth for FY27 are improving, and this along with abundant domestic liquidity is keeping the market resilient.
“Long-term investors can use the ongoing weakness in the market to accumulate quality growth stocks. Even though the valuations are higher, the market momentum is in mid- and small-caps,” according to the analyst.
Technical view on Nifty
While consecutive days of declines have raised the odds for a mean reversion upmove for Nifty, deeper supports at 24,060 and 23,575 stands are exposed now, explained Anand James, Chief Market Strategist at Geojit Investments
“We will look for a pull back above 24,260 to play upsides aiming 24,350 or 24,540-24,666,” he said, explaining the key technical levels to watch out for.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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