Indian equity benchmarks opened under significant selling pressure on Wednesday, dragged down by a weakening domestic currency and a cautious mood among investors. The market sentiment was weighed upon by the commencement of the Reserve Bank of India's Monetary Policy Committee (MPC) meeting and the anticipation surrounding the high-profile meeting between Prime Minister Narendra Modi and Russian President Vladimir Putin scheduled for December 4-5.
Market Opens Volatile, Erases Early Gains
The trading session began with modest gains but quickly turned negative. The Nifty 50 index opened at 26,043.60, up 11.40 points or 0.04%, but swiftly declined to touch the 25,942 level, highlighting early session volatility. Similarly, the Sensex started at 85,180.72, higher by 42.45 points or 0.05%, only to retreat to around 84,840 as selling intensified across sectors.
Market analysts pointed to the steep depreciation of the Indian Rupee against the US dollar and the continued withdrawal of funds by Foreign Portfolio Investors (FPI) as primary reasons for the downturn. This combination has created a negative feedback loop for equities, raising fresh concerns about the broader macroeconomic stability.
Expert View: Nifty Faces Key Resistance
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities, provided a technical outlook on the market. He noted that the Nifty 50 is encountering strong resistance near the 26,300 mark and has failed to close above this level despite multiple attempts. The index slipped towards 26,000 during the weekly expiry, a level that holds the highest cumulative put base, providing temporary support.
Thakkar stated, "Below 26,000 levels, it is likely to slip towards 25,800 which is the next hurdle for the Index." He added that the short-term trend appears sideways to negative, driven more by profit-booking than a full trend reversal, unless the index decisively breaks above the 26,200-26,300 zone.
Stocks to Watch: ICICI Securities' Near-Term Picks
Jay Thakkar of ICICI Securities has recommended three futures contracts for the near term based on technical and derivatives data:
Cyient Futures: Recommended buy range is ₹1,190-1,170 with a stop loss at ₹1,130 and targets of ₹1,270-1,320. The stock has broken out from a falling trendline and shows signs of short-covering, having closed above its max pain level.
BPCL Futures: Recommended buy range is ₹355-365 with a stop loss at ₹345 and targets of ₹385-400. The stock has broken multiple swing resistances with rising Open Interest, indicating long buildup. It also saw significant long rollovers from the November to December series.
Colgate Palmolive (India) Futures: Recommended buy range is ₹2,150-2,180 with a stop loss of ₹2,100 and targets at ₹2,280-2,320. The stock shows a positive divergence in momentum, suggesting potential short-covering if it sustains above the 2,200 level, which is a key resistance point.
Disclaimer: The views and recommendations are those of the individual analyst. Investors are advised to consult certified experts before making any investment decisions, as market conditions are subject to change.
