After a two-day rally, India’s stock market indices lost momentum, impacted by disappointing Q2 earnings that dampened sentiment. The BSE Sensex dropped 0.5% to settle at 79,966, while the NSE Nifty 50 also fell by 0.5%, closing at 24,350. Foreign investor selling and sluggish corporate earnings further pressured the market, with broader indices showing similar declines and volatility persisting throughout the session.
Banking, IT, and financial services stocks saw sharp declines, significantly contributing to the downturn.
Rupak De, Senior Technical Analyst at LKP Securities, observed that the Nifty remained volatile but largely range-bound, trading between 24,300 and 24,500. He pointed out resistance near the 50 EMA on the hourly chart, which triggered a pullback towards the lower range. According to De, sentiment is likely to stay neutral as long as the index remains within 24,250-24,500. He suggested that a breakout from this range could determine future market direction, identifying support at 24,250 and 24,000, with resistance levels at 24,500 and 24,750.
Vinod Nair, Head of Research at Geojit Financial Services, noted that heavy foreign institutional selling is adding caution to the domestic market. However, he pointed out that strong domestic inflows are offering some support amid heightened volatility.
Nair highlighted that other emerging markets are also stabilizing ahead of key U.S. economic data releases, upcoming elections, and the Federal Reserve’s interest rate decision. With underwhelming Q2 earnings and reserved commentary from companies, India’s valuations appear to be adjusting from previous highs.
