The Nifty50 resumed its decline on Wednesday, falling 77.95 points or 0.33% to close at 23,405.60, after a brief recovery in Tuesday's session. The benchmark index opened with a gap-down of 153.45 points at 23,229.15 and tested its previous swing-low support level, which also marked the day's low. Buyers stepped in at lower levels and successfully defended key support zones, triggering a sharp rebound that erased early losses. However, the recovery faces headwinds from global IT sector weakness, with Wipro and Infosys ADRs plunging sharply due to target price cuts and downgrades by brokerages. According to ET Now, the index formed a strong bullish candle on the daily chart and indicated renewed buying interest at lower levels. The recovery gained momentum throughout the day, with the index reaching an intraday high of 23,556.95 before settling near the day's high. About 2,222 shares advanced, 1,803 declined, and 165 were unchanged, as reported by SBI Securities. As of 10:13 p.m., GIFT Nifty is pointing to another gap-down open, trading 0.8% lower at 23,312.50, indicating potential weakness in the upcoming session.
Market experts remain cautiously optimistic about the technical outlook following Wednesday's decline, though global IT sector weakness adds uncertainty. Sudeep Shah of SBI Securities noted that the sustainability of Tuesday's move will depend on a decisive follow-through on the upside, with analysts at Bajaj Broking research reiterating this view. Going ahead, follow-through strength above Tuesday's high 23,556.95 will open further upside, as per SBI Securities. From a technical perspective, Sudeep Shah said the 23,620-23,650 zone remains a key resistance area, with a sustained move above 23,650 potentially extending the current pullback rally towards 23,800. On the downside, the 23,400-23,370 zone is expected to provide immediate support and act as a cushion against near-term weakness. Latest technical analysis suggests that the near-term undertone remains subdued as long as the index trades below 23,550, with immediate support placed around 23,250, and a decisive break below this level could trigger further downside towards 23,050. Sachin Gupta from Choice Broking noted that the index formed a strong bullish candlestick pattern after opening at the day's low and closing near the day's high, indicating sustained buying interest from lower levels. Immediate support for Nifty lies in the 23,270-23,250 zone, while immediate resistance is placed between 23,530 and 23,550 levels.
Current technical analysis reveals multiple support and resistance zones that traders should monitor closely. Hitesh Rathi of Angel One said the broader structure remains range-bound, with support placed at 23,200 and resistance near 24,000. According to Rathi, as long as the index holds above the 23,250-23,200 support zone, the likelihood of a deeper correction remains limited. However, a break below this band could accelerate selling pressure towards 23,100 and potentially drag the index further towards the 22,700-22,600 region. On the upside, immediate resistance is seen in the 23,550-23,600 zone, followed by a stronger hurdle between 23,750 and 23,950, where the 20-day and 50-day exponential moving averages are currently placed. Sachin Gupta from Choice Broking identified immediate support in the 23,200-23,250 zone and resistance in the 23,700-23,750 range, with the Relative Strength Index (RSI) standing at 42.95, indicating modest improvement in momentum. The India VIX declined by 7.18% to close at 15.35, indicating increased volatility and caution among market participants despite the recovery. As of 11:15 p.m., GIFT Nifty hinted at a gap down open, trading 0.46% lower at 23,471, suggesting potential weakness in the upcoming session.
Despite broad weakness, certain sectors continue to show resilience, particularly IT and metals, which are attempting to provide support to the benchmark index. According to Rajani's analysis, IT stocks may continue to attract attention following positive commentary from global AI companies and strength in international technology shares. Latest market performance shows that IT heavyweights including TCS, Infosys and HCLTech emerged as the top Nifty gainers, with the Nifty IT index surging 4.23%, significantly outperforming the broader market. TCS, Infosys, HCL Technologies and Tech Mahindra were the top gainers on the Nifty index. Strong buying interest was visible in IT, Consumer Durables, FMCG, Auto, Realty and PSU Bank stocks, while weakness persisted in Pharma, Healthcare, Financial Services, Midcap Healthcare and Oil & Gas segments. Market breadth remained positive, with advancing stocks comfortably outnumbering declining stocks - 2,034 stocks advanced while 1,285 declined and 107 remained unchanged out of 3,426 stocks traded. Rajani expressed a bullish view on IT, particularly LTIMindtree, citing technical strength after a prolonged consolidation.
The Bank Nifty closed on a flat note, mirroring the benchmark's rebound only to a certain extent, as noted by SBI Securities. Notably, Bank Nifty continues to trade below its key moving averages, indicating a cautious undertone in the near-term trend. Going ahead, the immediate resistance for Bank Nifty is placed in the 54,600-54,700 zone, whereas the immediate support for the index is placed in the 53,800-53,700 zone. A breach below 53,700 may drag the index towards the next important support level placed around 52,800. With the Nifty finding support near key levels and showing resilience, the near-term outlook appears more balanced than previously anticipated. Market sentiment improved as the India VIX declined more than 7%, signalling easing volatility and a recovery in risk appetite. According to Rupak De of LKP Securities, despite the recovery, he believes the broader trend remains weak and downside risks cannot be ruled out. Key global events include negotiations for the India-US Bilateral Trade Agreement underway in New Delhi from June 2 to 4, with a US delegation led by Assistant US Trade Representative Brendan Lynch beginning three-day talks to finalise the first phase covering trade, market access and tariff-related issues.
