Indian equity benchmarks ended higher on Tuesday, recovering from early losses in a volatile expiry session as buying in select IT, pharma and PSU banking stocks helped the Nifty reclaim the 24,300 mark. At the close, the Sensex rose 286.98 points, or 0.37%, to 77,656.09, while the Nifty gained 115.50 points, or 0.48%, to 24,334.55. Market breadth remained weak with 1,993 shares advancing against 2,153 declines, while 156 stocks ended unchanged. With Gift Nifty pointing to a firm start, Indian benchmarks look set to open higher on Wednesday, breaking from the roughly 1.3 per cent decline of the past two weeks. However, for Indian investors, the flat global cues suggested a range-bound opening for the Sensex and Nifty 50, according to Univest. Absent strong domestic catalysts, factors such as FII and DII flows, sector-specific corporate actions, and any RBI or government policy moves were expected to drive market direction. This prediction holds only if the current mix of macro and geopolitical conditions stays unchanged between now and Wednesday's opening bell; a fresh escalation in the Iran sanctions standoff or a sharp reversal in crude could quickly alter sentiment.
The much-anticipated US sanctions against Iran fell short of market expectations, causing crude oil prices and bond yields to moderate from their recent peaks, as noted by Vinod Nair, Head of Research at Geojit Investments. However, crude oil prices steadied on Tuesday after a sharp decline in the previous session as investors assessed the impact of tighter US sanctions on Iran and the threat of secondary sanctions on countries trading with Tehran. This relief in energy costs aided a moderately positive close today on the monthly expiry day. Sectorally, Nifty Media, PSU Bank, and Nifty Chemicals were top gainers which jumped up to 0.6%, while Nifty Metal was top laggard and declined 0.48%, followed by Nifty Oil & Gas which fell 0.4%. Similarly, Nifty IT declined 0.37%, while Nifty Auto and Nifty Realty slipped 0.32% each. Market participants are now awaiting upcoming inflation data and comments from the Fed Chair later this week for better clarity on the inflation and interest rate outlook. The technology sector's weakness abroad was flagged as a potential early warning sign for Indian IT stocks, which have already faced pressure in recent sessions.
Asian markets provided strong support with South Korea's Kospi, Shanghai's SSE Composite, Hong Kong's Hang Seng and Japan's Nikkei 225 quoting in positive territory, while Wall Street futures were up as much as 0.6%, signalling a firm start for US equities. However, European stock indices traded flat on August 24, with the Stoxx 600 index barely budging. The FTSE stood at 10,815.23, down 0.01%; the CAC at 8,469.50, down 0.18%; and the DAX at 26,086.40, down 0.19%. Technology and healthcare were the biggest laggards, with ASML Holding NV and SAP SE both dropping more than 1%, this weakness mirrored the softness seen in the U.S. Nasdaq over the past week, suggesting a global tech sector under pressure. Crude prices fell 3.5% as traders saw little immediate threat to global crude supplies from the latest U.S. measures, providing additional support to global markets. European investors, much like their American counterparts, were in a "wait-and-watch mode" ahead of key macroeconomic data and central bank commentary later in the week, including U.S. inflation data and Federal Reserve policy signals.
According to Rupak De, Senior Technical Analyst at LKP Securities, Nifty remained sideways to negative for most of the session until the last hour, when the index rose from the ashes and moved deep into positive territory. However, despite slipping through the day, yesterday's pull back in the closing hour encourages us to look for a rise to 24,400 today. Alternatively, inability to float above 24,200 or slippage past 24,144 will expose 23,575, with last support seen at 24,060. The index climbed back above the 20 EMA after a few days of underperformance, with the RSI entering a bullish crossover indicating improving momentum. Resistance is placed at 24,400/24,480 on the higher side, while immediate support is at 24,240. Near-term cautiousness is expected to continue for Indian equities as unresolved US-Iran tensions keep oil prices and bond yields relatively elevated, leaving investors sensitive to sudden shifts in the Middle East geopolitical landscape.
Out of 3,637 stocks that traded on NSE on August 25, 1,672 stocks witnessed advances, 1,842 saw declines while 123 stocks remained unchanged. Among stocks hitting 52-week highs were Paytm, Divis Labs, AU Small Finance Bank, Bajaj Auto, IPCA Labs, PVR Inox and HFCL. Conversely, stocks witnessing significant selling pressure included Hind Copper, IIFL Finance, Data Patterns, Balrampur Chini, Redington, Netweb Technologies and Ola Electric Mobility. Stocks hitting 52-week lows included RVNL, Groww, Dabur India, IRB Infra Dev., IRCTC, Sun TV and PI Industries. Market action has remained focused on the midcap and smallcap segments, where corporate developments and positive news flow have continued to trigger buying interest, with foreign institutional investors participating despite valuation concerns.
