The Nifty's recovery continued to face significant selling pressure on Tuesday, with the index declining 85.30 points or 0.36% to settle at 23,329, snapping its four-day gain streak and closing below the crucial 23,350 level. According to Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, the index closed below 23,400, keeping the near-term technical setup under pressure. Market breadth was insufficient to sustain the opening gains, while short-term momentum weakened during the session. The benchmark indices had opened marginally higher with the Sensex up 179.94 points or 0.24% at 75,038.93 and the Nifty advancing 74.7 points or 0.31% to 23,489, but profit booking emerged at higher levels. The decline came as investors booked profits in several heavyweight sectors following recent gains.
Immediate support for the Nifty is placed at 23,300, followed by 23,200 and 23,000, as reported by Radhakrishnan. On the upside, the 23,500-23,600 zone remains the key resistance area. Market watchers noted that on the downside, 23,300 remains the immediate support, followed by 23,200. A decisive break below 23,300 could intensify selling pressure and expose the index to the 23,200 zone. Ponmudi R, CEO of Enrich Money, noted that the Nifty will need to sustain above 23,454 to maintain the recovery and move toward the 23,500–23,600 region. However, this zone remains an important resistance band, where renewed selling pressure could emerge. Momentum has improved marginally, with the RSI edging higher to around 38, although it remains in weak territory, suggesting that the recovery is still in its early stages.
Selling pressure was concentrated in IT and financial stocks, with Trent, Tata Consumer Products and Tata Consultancy Services among the top losers on the Nifty. All constituents of the index, barring Oracle Financial Services Software, fell during Tuesday's session. Oracle Financial shares were up over 1% after closing over 8% lower Monday, following the company's clarification that it isn't aware of developments around debt worth $18 billion for a data centre leased by its parent company in New Mexico. Among major laggards in the Nifty IT index, LTM and HCL Technologies fell up to 4%, reflecting profit booking in IT shares. All major Nifty sectoral indices declined, barring Metal, Media and Realty. Coal India gained more than 2% after Morgan Stanley upgraded to "overweight" from "equal-weight" on improving earnings outlook. The Nifty Smallcap 100 fell 0.23%, while the Nifty Midcap 100 was flat with a gain of 0.08%. Among sectors, the Nifty IT index was one of the weakest performers, while the Nifty PSU Bank and Nifty Pharma indices also ended lower.
The technical setup suggests that the index needs to reclaim the 23,500-23,600 resistance zone to signal improvement in the near-term trend, while a break below immediate support levels could keep the corrective phase intact. CLSA highlighted that "IT companies' management demand commentary going into the silent period for September quarter results remains cautious at best," adding that "weak macro fundamentals due to geopolitics, higher rates and inflation pose downside risk to earnings." On the upside, immediate resistance for Bank Nifty is placed at 56,700-56,800, while a sustained move above 57,000 would be required to improve the broader near-term structure. Analysts said investors continued to rotate money into select sectors while reducing exposure to IT and financial stocks. The near-term technical outlook remains cautiously constructive, with the recovery still requiring stronger follow-through buying.
