Nifty halts 14-day rally; Sensex drops over 200 points tracking weak global markets

Stock markets closed lower on Wednesday with Nifty taking a breather after a 14-day winning run and Sensex dropping by 202 points due to weak global trends on worries of a potential slowdown in the US market. The 30-share BSE Sensex fell 202.80 points or 0.25 % to settle at 82,352.64. During the day, it tumbled 721.75 points or 0.87 % to 81,833.69.

Snapping its 14-day rally, the NSE Nifty declined 81.15 points or 0.32 % to 25,198.70. Intra-day, it tanked 196.05 points or 0.77 % to 25,083.80. Nifty has surged nearly 1,141 points or 4.59 % in 14 straight days.

Among the 30 Sensex firms, ICICI Bank, State Bank of India, Axis Bank, Mahindra & Mahindra, Infosys, Larsen & Toubro, Tata Steel, Tata Consultancy Services, Bajaj Finance and Adani Ports were the major laggards.

Asian Paints, Hindustan Unilever, UltraTech Cement, Sun Pharma and Reliance Industries were among the gainers. In Asian markets, Seoul, Tokyo, Shanghai, and Hong Kong ended sharply lower.

European markets were also trading in the red. The US markets ended significantly lower on Tuesday.

"The warning signals from weak US manufacturing data added concerns about a potential slowdown in the US economy, which dragged the domestic indices. Due to a lack of major domestic triggers, the indices will take direction based on global cues," said Vinod Nair, Head of Research, Geojit Financial Services.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,029.25 crore on Tuesday, according to exchange data. Global oil benchmark Brent crude declined 0.14 % to USD 73.65 a barrel.

Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One Ltd, noted that the weakness in the global bourses led to a gap-down start for our markets, breaking the 14-day winning streak for Nifty. However, post the opening bell, the bulls showed resilience and gradually led the index to higher ground, paring down some of the losses with a modest recovery. Eventually, the Nifty50 index settled the day a tad below the 25200 level, with a cut of 0.32 percent after a very long haul.

"The recent fall could be seen as a breather with no alterations to the ongoing trend. Furthermore, the unwavering strength of the Bulls demonstrated throughout the session reflects the positive sentiment in the domestic market. From a technical standpoint, the pullback post the setback construes a positive scenario, with strong support being seen around the 25,100-25,080 spot zone for Nifty, followed by the sacrosanct support of the 25,000 mark in the comparable period. On the higher end, the highs of 25,300-25,350 is now expected to be seen as a resistance and an authoritative breach could only open the next leg of the rally towards 25,400-25,500", he said.

"Going ahead, it is crucial to stay vigilant about global developments, as they can significantly impact the intermediate trend for our markets. While our domestic market shows strength, it is essential to proceed thoughtfully, adopt a practical approach, and focus on selective stock choices for superior performance", Krishan continued.

Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd highlighted that selective buying in heavyweight stocks helped trim the losses as the session progressed, with the index eventually closing at 25,198, down by 0.3%. Sector-wise, the trend was mixed; pharma, realty, and FMCG sectors saw gains, while IT and metal sectors faced profit-taking.

"This move indicates that the bulls are still holding their ground, though consolidation could occur if global pressures intensify. We recommend maintaining a focus on stock selection and trade management, with the support zone for Nifty remaining strong at 24,850-25,000", he said.