Image Source: MoneyControl
India’s benchmark equity index, the Nifty 50 (.NSEI), opened Thursday’s trading session with a modest decline of 0.14% in pre-open trade, reflecting cautious investor sentiment amid mixed global cues and signs of profit booking. The dip, though minor, comes after a volatile week where the index flirted with record highs but struggled to sustain momentum.
At 9:00 AM IST, the Nifty 50 was seen trading slightly lower, indicating a soft start to the day’s session. This pre-open movement is often a bellwether for broader market trends, especially when global factors are in play. Analysts attribute the early weakness to a combination of factors including subdued cues from Wall Street, concerns over stretched valuations, and technical resistance levels that have capped recent rallies.
The index had recently tested the 25,130 mark, a key psychological threshold, but failed to hold above it. Technical analysts point to the emergence of a “spinning top” candlestick pattern and a bearish divergence in the Relative Strength Index (RSI), both of which suggest indecision and potential consolidation. A break below 24,970 could trigger further downside toward 24,840, while a strong close above 25,100 is needed to reignite bullish momentum.
Global markets have also added to the cautious tone. U.S. chipmaker Nvidia’s earnings report, expected later today, has cast a shadow over tech-heavy indices, with investors watching closely to see if the AI-driven rally has legs. Weak guidance from Nvidia could ripple into Indian IT stocks, which are heavily weighted in the Nifty 50.
Back home, sectoral indices showed mixed trends in the previous session. While auto and FMCG stocks held firm, banking, pharma, and metals dragged the index lower. Heavyweights like Reliance Industries, HDFC Bank, and ICICI Bank posted mild declines, contributing to the overall softness. On the flip side, stocks like Hindustan Unilever and Maruti Suzuki offered some support, with gains of over 2% and 1.8% respectively.
The broader market sentiment remains cautiously optimistic. Despite the dip, the Nifty 50 has gained over 4% in the past month and continues to trade near its all-time highs. The GIFT Nifty, a derivative indicator of the index’s performance, was up 27.5 points or 0.11% earlier in the morning, suggesting that the initial weakness may be short-lived.
Market experts advise investors to brace for potential volatility in the coming sessions. With the end-of-month derivatives expiry approaching and global macro data releases on the horizon, short-term swings are likely. Traders are watching for cues from U.S. GDP data, crude oil price movements, and domestic inflation trends to gauge the next directional move.
For long-term investors, the current phase may offer opportunities to accumulate quality stocks at slightly discounted levels. However, caution is warranted in sectors that have run up sharply in recent weeks, particularly midcaps and smallcaps, which are more vulnerable to corrections.
The Nifty 50’s performance today will be closely watched for signs of resilience or reversal. A firm close above resistance levels could set the stage for a fresh rally toward 25,300–25,500, while failure to hold support may lead to a short-term pullback.
As the trading day unfolds, all eyes will be on how institutional flows, global sentiment, and technical indicators align to shape the index’s trajectory.
Sources: NSE India, NDTV Profit
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