The stock market witnessed a fierce battle between bulls and bears in Tuesday's highly volatile session, with the latter ultimately taking control. The Nifty opened flat at 24,956 but quickly faced selling pressure, plunging to an intraday low of 24,737. Just as the bears seemed dominant, the index staged a sharp rebound, surging to a day's high of 25,062. However, the second half saw another wave of profit booking, erasing all gains and dragging the Nifty to a fresh low of 24,704 before closing near the day's lowest level. The Nifty settled at 24,826, down 175 points (0.70%)
The Sensex mirrored the turbulence, opening at 82,038 (against the previous close of 82,176). It tumbled nearly 900 points early but recovered by mid-morning, climbing to 82,411. Yet, the rally faltered, and the index plummeted to 81,121.70 before settling at 81,551.63, down 624.82 points (0.76%). The session highlighted intense volatility as investors grappled with shifting momentum.
“All in all, today’s session was a classic example of indecision, with bulls and bears both making bold attempts,” said Sundar Kewat, Technical and Derivatives Analyst, Ashika Institutional Equity.
He highlighted that options data shows the highest Call OI at the 25,000 strike, suggesting it may act as a stiff resistance, while the Put OI is heaviest at 24,000, indicating a possible support zone. The Put-Call Ratio (PCR) stands at 0.81, reflecting a cautious undertone in the market.
Vinod Nair, Head of Research at Geojit Investments, said that investors opted for profit booking driven by valuation concerns and weakness across Asian markets. “The benchmark index once again failed to decisively breach the 25k resistance level, reflecting the absence of positive triggers. Large-cap stocks underperformed, weighed down by subdued FII participation and lacklustre earnings from blue-chip companies,” stated Nair.
Amid the turbulence, mid and small-cap segments outperformed, with the Nifty Midcap 100 and Nifty Small cap 100 indices advancing 0.15% and 0.1%, respectively underscoring relative strength in the broader market. On the sectoral front, the NSE indices traded predominantly in the red, with Nifty FMCG, IT, and Auto leading the laggards, each declining around 1%. Banking and financials also came under pressure, as the Nifty Bank and Nifty Private Bank indices slipped close to 0.5%.
Analysts at Bajaj Broking said the Nifty traded with extreme volatility as it formed a bearish candle with a lower low compared to previous session signalling profit booking around the 25,000 levels. “The index continues to consolidate in the range of 25,200-24,400 in the last 11 sessions. We believe the index will extend the consolidation, hence dips should be used as buying opportunity. On the lower side 24,700-24,650 is likely to act as immediate support while short term support is seen at 24,400–24,500 being confluence of 20 days EMA, previous breakout area and last 2 weeks lows,” stated Bajaj Broking Research.
The rupee snapped its two-day winning streak, depreciating by 25 paise against the US dollar to settle at 85.33. This downward movement was primarily driven by a stronger U.S. dollar against major global currencies and the fall in the domestic equity market, said Nandish Shah, Senior Derivative & Technical Research Analyst, HDFC Securities.
He added, “Nifty has been finding it difficult to cross 25116 resistance and continuing its choppy trend. On the downside, 24700 and 24462 could offer support in the Nifty. A decisive level above 25116 would bring back the bullish momentum in the Nifty.”
Ajit Mishra, SVP, Research, Religare Broking, said we are currently witnessing a tug of war between bulls and bears amid mixed global cues. “However, favorable domestic factors such as a good monsoon and strong macroeconomic data are helping maintain a positive undertone.”
“We continue to maintain a positive outlook on the market. However, sustained strength in the banking and financial sectors is crucial for the Nifty to overcome the 25,200 hurdle and regain upward momentum,” stated Mishra.