Sensex trades on choppy note, Nifty below 24,100 as IT stocks drag benchmarks lower

Indian stock market traded on a muted note on Tuesday, with Sensex and Nifty in the red, weighed down by IT stocks.

Sensex was down over 8 points at 77,050 mark, while Nifty 50 slipped around 32 points to 24,100 level. Broader markets, meanwhile, outperformed, with the Nifty Smallcap 100 and Nifty Midcap 100 indices gaining up to 0.24%.

Infosys and TCS shares fell nearly 1% each to lead losses on the Sensex, while Bharat Electronics (BEL), Bajaj Finserv, Trent, ICICI Bank and Titan shares gained nearly 1% each to lead gains on the benchmark index.


Sectorally, Nifty IT and Nifty Metal indices dropped nearly 1%, while Nifty Pharma rose 0.4%. The overall market breadth remained positive, with 414 stocks advancing on the NSE, 166 declining and 42 remaining unchanged.

What lies ahead?

Improving prospects for peace in West Asia and the sharp correction in Brent crude to below $80 have improved the outlook for GDP growth and corporate earnings in FY27, said V K Vijayakumar, Chief Investment Strategist at Geojit Investments. "The market has discounted this positive trend, with Nifty rallying about 1,800 points from the March lows. Stability in the rupee and the continuing tapering of FPI selling are important positives that can take the market up. However, the concern now is the poor monsoon so far this season. The deficit is currently large at 42.2%," he noted.

"Globally, markets will be keenly watching the Fed commentary after the FOMC meeting on July 28-29, which is significant in the context of high inflation in the US and the 10-year yield remaining firm at around 4.5%. Rising yields are negative for equity markets," the analyst added.

Technical view on Nifty

Going ahead, a decisive move in Nifty above last week's high of 24,189 could reignite momentum and pave the way for an advance towards 24,300 levels in the coming sessions, according to Bajaj Broking. "Failure to do so will lead to some consolidation amid stock-specific action in the range of 23,900 to 24,189," it added.

The domestic brokerage said the bias remains positive and dips should be used as a buying opportunity, with immediate support placed in the 23,900 to 23,800 range, which marks last Monday's gap area and the 50-day EMA. "The key short-term support is placed at the 23,500 to 23,600 zone, being the recent breakout area and the key retracement of the recent pullback. On the higher side, major resistance is seen at 24,600 levels, which coincides with the April high and the placement of the 200-day EMA," it said.

(With inputs from agencies)

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