The benchmark indices ended nearly flat on Wednesday, extending their losing streak to a fourth consecutive session amid volatile trading, as investors adopted a cautious stance ahead of major central bank policy decisions and US inflation data. The Nifty closed at 25,815.55, down 3 points or 0.01 per cent, while the Sensex ended at 84,481.81, lower by 77.84 points or 0.09 per cent.
The session witnessed sharp intraday swings, with the Nifty recovering nearly 176 points from its lows, before surrendering gains in the afternoon. “After a gap-down opening of about 54 points, the index extended its fall and briefly slipped below the 50 DEMA placed at 25,767, before staging a smart recovery of nearly 176 points post 10 a.m. In the second half, Nifty once again reversed course, correcting about 132 points from the day’s high of 25,902, underscoring the ongoing tug of war between bulls and bears,” said Nandish Shah, Deputy Vice-President at HDFC Securities.
Foreign institutional investors turned net buyers for the first time in December, purchasing equities worth ₹1,172 crore, providing relief after weeks of persistent selling. “There was some rebound in INR and the FIIs turned net buyers for the first time in the month of December, buying equities worth ₹1,172 crore, offering some relief after weeks of relentless selling,” noted Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services.
Technology stocks led the gainers, with the Nifty IT index rising over 1 per cent. gained 2.90 per cent to close at ₹5,125.00, emerging as the top Nifty gainer. advanced 1.97 per cent to ₹3,281.20, rose 1.64 per cent to ₹1,048.00, climbed 1.62 per cent to ₹1,605.00, and added 1.57 per cent to close at ₹1,627.10.
Pharmaceutical and metal stocks faced selling pressure. declined 2.62 per cent to ₹1,746.00, emerging as the worst performer. fell 1.40 per cent to ₹167.95, dropped 1.23 per cent to ₹257.90, slipped 0.98 per cent to ₹2,758.40, and declined 0.92 per cent to ₹1,169.00.
The broader markets outperformed the benchmarks, with the Nifty Midcap 100 index advancing 0.34 per cent to close at 59,592.15, while the Nifty Smallcap 100 gained 0.13 per cent to end at 17,160.20. However, the market breadth remained weak with 1,629 shares advancing against 2,509 declines on the BSE, where 4,332 stocks were traded. Notably, 276 stocks hit 52-week lows, compared to 95 touching 52-week highs, while six stocks were locked in the lower circuit.
The sectoral performance remained mixed with the Nifty Financial Services index gaining 0.06 per cent, while the Nifty Bank closed marginally lower by 0.02 per cent. The Nifty Next 50 declined 0.36 per cent. “Sectoral trends remained mixed, with selling pressure evident in energy, auto and pharma, while IT showed strength and financials and metals witnessed selective participation,” said Ajit Mishra, SVP Research at Religare Broking.
The Indian rupee appreciated 14 paise to settle at 90.24 against the US dollar, marking a second consecutive day of gains. “The Indian rupee extended its bullish streak for a second consecutive session, bolstered by corporate dollar inflows and a softening in global commodity prices,” said Dilip Parmar, Research Analyst at HDFC Securities. Brent crude hovered around $60 per barrel during the session.
“Indian equity markets staged a smart recovery from the day’s lows despite broad weakness across Asian equities. However, mild selling pressure emerged at higher levels, prompting cautious traders to pare positions ahead of the release of US consumer price inflation data and the outcome of the Bank of Japan’s crucial monetary policy meeting — both of which are expected to influence global market sentiment and near-term risk appetite,” said Ponmudi R, CEO of Enrich Money.
From a technical perspective, analysts highlighted that the Nifty has managed to defend crucial support levels. “The Nifty has managed to hold the crucial support near the previous swing low around 25,700, which remains a key level to monitor in the coming session, as a breakdown could lead to further correction,” Mishra added. “Despite the recent correction, the index has so far managed to hold above the 50 DEMA at 25,767 and the previous swing low of 25,693. A decisive close below these supports could accelerate selling pressure, while on the higher side, the 26,000 level is likely to remain a strong hurdle,” Shah said.
“The Nifty remains weak as the index failed to reclaim the 200-DMA on the hourly chart, with bears continuing to drag Indian equities lower. The trend continues to remain weak, with the 25,700 level appearing vulnerable to a breakdown. A decisive breach below 25,700 could trigger a swift next leg of correction. On the upside, resistance is placed around 25,900,” said Rupak De, Senior Technical Analyst at LKP Securities.
Looking ahead, investors await key central bank policy decisions from the Bank of England and the European Central Bank scheduled for Thursday, along with US retail inflation and jobless claims data. The Bank of Japan is expected to raise interest rates from 0.5 per cent to 0.75 per cent on Friday. “Overall, we expect the market to consolidate within a range, tracking INR/USD movement, FII flows and global macro data,” Khemka said.