The Nifty 50 index experienced significant volatility on Tuesday, declining for the second consecutive session before staging a strong recovery in the closing auction session. According to CNBC TV18, the index fell 24 points to close at 24,055, recovering a major portion of its losses during the closing auction session (CAS). The session began with the index opening flat and remaining firm in the first half, rising as much as 66 points to 24,143. However, selling pressure intensified mid-session, dragging the index down 191 points to an intraday low of 23,952. The benchmark recovered more than 100 points in the final hour, while the CAS settlement added over 70 points, helping the index close above the crucial 24,000 mark. At 3:15 pm, the Nifty was at 23,981 before settling at 24,056 at 3:30 pm.
Monday's price action resulted in the formation of a red-bodied candle with a long lower shadow and a small upper shadow, indicating buying interest at lower levels but continued supply on the upside. As reported by market analysts, the index continued to form a lower high and lower low on the daily chart, keeping the near-term structure under pressure. The Nifty had managed to hold above its 20-DMA and the 38.2% retracement level for the previous four sessions. However, Monday's close below these levels suggests that the ongoing corrective phase remains intact, with the index now trading just 0.98% above its 50-DMA. The current corrective swing is already 10 trading sessions old and has retraced only a little over 38.2% of the sharp six-session rise from the July 24 low to the August 3 high, suggesting that selling pressure has so far remained measured rather than aggressive.
On the downside, the 50% retracement level of the recent upswing, placed around 24,190, is the first important support. This is followed by the 50-DMA at 24,103. According to CNBC TV18, analysts now identify the 24,000 level as the crucial support zone, with a sustained close below this level potentially dragging the Nifty towards the next support at 23,800. Conversely, a move above 24,150 could open the door for a short-term recovery. The 24,200-24,250 zone is likely to remain a strong resistance area, with multiple moving averages clustered around these levels. A decisive break below 23,950 could trigger the next leg of correction, while holding above this level could pave the way for a near-term recovery, though higher levels are likely to continue attracting selling pressure. Technical analysts now identify 24,179–24,280 as the initial resistance zone for the next trading session, followed by the broader 24,300–24,362 band where the range ceiling and 200-DEMA converge.
Among Nifty 50 constituents, ITC, Bharti Airtel and Adani Ports were the top gainers, while Shriram Finance, Maruti Suzuki and Nestle India ended among the biggest laggards. Sectoral performance remained mixed, with IT, FMCG and Oil & Gas outperforming, while Healthcare, Pharma, Realty and Consumer Durables came under pressure and ended among the worst-performing sectors. The broader market also witnessed selling pressure, with the Nifty Midcap 100 declining 1.4% and the Nifty Smallcap index falling 0.23%. The Nifty Bank stood at 57,264 at 3:15 pm and closed at 57,410, while the Sensex moved from 76,725 to 76,944 during the CAS. On Tuesday, Nifty Pharma, Nifty Realty, Nifty PSU Banks and Nifty Healthcare declined, while Nifty FMCG, Nifty Media, Nifty Metals, Nifty Auto and Nifty IT gained during the session.
Despite equity market weakness, domestic economic data remains supportive. India's GDP expanded 7.8% year-on-year in Q1 FY27, beating expectations, with manufacturing and services activity providing support to growth. GST collections rose 14.8% year-on-year to ₹1.99 lakh crore in August, while the Centre's fiscal deficit stood at 26.8% of the FY27 target during April-July. However, the near-term outlook remains cautious amid persistent US-Iran tensions, elevated crude prices and continued institutional selling. Brent crude rose 1.7% to around $92 a barrel, raising concerns over inflation and potential disruptions to energy supplies. The Indian rupee extended its winning streak to a third consecutive session, appreciating 21 paise to close at 94.95 against the US dollar - its strongest level in two months, supported by stronger domestic growth data. GIFT Nifty trades 0.19% higher at 24,097.50, indicating a possible positive start to the Indian equities, while concerns remain as all US indices were trading lower on Tuesday.
