The Nifty traded in the positive territory for most part of the session but succumbed to selling pressure in the final hour. The index gave up 22,500 level as the last-hour saw a big fall.
Despite an initial positive tone and range-bound movement in the first half, a key resistance at the 20-day EMA restricted further upside and triggered profit booking as the session progressed. As a result, the Nifty turned weak on Monday, closing 92 points lower at 22,460.
The sell-off was primarily driven by weak sentiment from Asian markets and a steep decline in US stock futures.
US stock futures are trading with steep cuts on Monday morning as Wall Street braces for a volatile start to the new trading week. Futures tied to the Dow Jones are down over 400 points, while those on the S&P 500 are down over 60 points or 15. Nasdaq futures too are trading with losses of over 250 points.
The broader market underperformed, with the Nifty Midcap100 and Smallcap100 indices falling 1.5% and 2%, respectively. Except for the FMCG sector, which posted marginal gains, all other sectoral indices ended in the red.
Oil Marketing Companies (OMCs) declined after the second supplementary demands made no provision for LPG compensation. The petroleum ministry had requested ₹35,000 crore in compensation for FY25, while total LPG under-recoveries for the first nine months of FY25 stood at ₹29,223 crore, with Q3FY25 alone witnessing a 67% surge in such losses.
Shares of IndusInd Bank plunged up to 5% on Monday after multiple analysts downgraded the stock and slashed price targets. The decline followed the Reserve Bank of India’s decision to approve only a one-year extension for CEO Sumant Kathpalia, despite the board’s recommendation for a three-year term.
What do the Nifty 50 charts indicate?
Nagaraj Shetti of HDFC Securities said the short-term trend of the Nifty is still positive. He expects the market to show further consolidation or a minor dip in the next 1-2 sessions before moving up further.
“A decisive move above 22,700 levels could open further upside in the near term. Immediate support is placed at 22,200 levels,” Shetti said.
According to Rupak De of LKP Securities, the Nifty remained volatile throughout the day, finding resistance at the 21 EMA on the daily chart, which led to a decline towards 22,400.
Going forward, De expects 22,400 to continue to act as crucial support, and the sentiment is unlikely to weaken unless the Nifty falls below this level. “On the higher end, resistance is placed at 22,750, above which the bulls might gain increased strength. The overall large-cap sentiment could also strengthen if Nifty moves above 22,750.”
