Indian Stock Market Sees Decline as IT Sector Weighs on Indices
Benchmark equity indices Sensex and Nifty 50 experienced a downturn on Thursday, primarily driven by substantial losses in major IT stocks, including Infosys and Tata Consultancy Services. This decline followed negative cues from US markets, extending the bearish trend from the previous trading session.
Key Market Movements and Figures
The 30-share BSE Sensex dropped by 421.66 points, equivalent to a 0.50% fall, settling at 83,811.98 during early trading hours. Similarly, the Nifty 50 decreased by 121.10 points, or 0.47%, closing at 25,832.75. Analysts noted that rising crude oil prices further contributed to a cautious sentiment among investors, with Brent crude, the global oil benchmark, rising by 0.46% to USD 69.72 per barrel.
Sectoral Performance and Institutional Activity
On the sectoral front, the IT sector witnessed the most significant decline, falling by 3.95%, while the Focussed IT index on the BSE reduced by 3.87%. In terms of institutional investments, foreign institutional investors purchased equities worth ₹943.81 crore on Wednesday, whereas domestic institutional investors offloaded stocks totaling ₹125.36 crore, according to exchange data.
Technical Analysis and Market Outlook
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, provided insights into the market's technical stance. He observed that after showing an upward movement with range-bound action in recent sessions, Nifty 50 slipped into gradual weakness on Thursday, trading lower by 90 points. The index opened on a weak note but attempted recovery from the lows of 25,841 early in the session.
Shetti highlighted that Nifty 50 is currently facing stiff resistance around the 26,000 level, which corresponds to the mid-part of the long red candle from February 3 on the daily chart. He anticipates that the index will eventually surpass this resistance after a dip. A decisive breakout above 26,000 could open the path for further upside towards 26,350-26,400 in the near term, with immediate support placed at 25,800.
Short-Term Stock Recommendations
Nagaraj Shetti of HDFC Securities recommended two stocks for short-term buying opportunities:
- Finolex Industries Ltd: Buy at ₹189.50, with a target of ₹202 and a stoploss of ₹183, within a one-week timeframe. The stock has shown a sharp breakout from range-bound movement, with a crucial higher bottom reversal pattern around ₹170 levels and expanding volume during the breakout.
- Electrosteel Castings Ltd: Buy at ₹75.90, targeting ₹81 with a stoploss of ₹73, also within a one-week timeframe. The stock has been in an accumulation phase around ₹68-70 levels and is attempting a breakout of a triangle pattern at ₹78-80, with bullish chart patterns intact.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, and not of Mint. Investors are advised to consult certified experts before making any investment decisions.
