Domestic equity benchmarks ended lower on Wednesday as broad selling hit the Nifty and Sensex. The Nifty fell 0.34% to 22,811.35. Analysts said the index faces a sideways drift until it hits 23,000. "Nifty remains just above the 20 SMA, which separates a pause from further weakness," said Om Mehra.
Domestic equity benchmarks ended lower after Wednesday's trading session as broad-based selling across most sectors weighed on the Nifty and Sensex. The Nifty settled 0.34% lower at 22,811.35 after falling to an intraday low of 22,649.90. Meanwhile, Sensex ended 0.19% lower at 73,709.69, after reaching a low of 73,229.45 intraday. Bank Nifty fell 511.20 points, or 0.92%, to end at 54,976.90.
The broader market saw a lot more selling pressure during the session, with the Nifty Smallcap 100 slipping 2.37% and the Nifty Midcap 100 falling 1.58%. Among sectoral indices, metals, auto, realty, pharma, media and FMCG stocks declined, while the IT index gained 2.88%.
Nifty Support, Resistance Levels
As per analysts, the Nifty's immediate support has now shifted lower to the 22,650-22,700 zone from 22,800 in the previous session, making this range crucial for the index to hold in the coming session.
"Nifty faced selling pressure near its 38.2% Fibonacci retracement level during the ongoing mean-reversion rally. Monday's developments and Wednesday's price action indicate weakening momentum," said Vatsal Bhuva, technical analyst at LKP Securities. Bhuva said the index closed near its 20-day moving average around 22,800 after CAS. He identified 22,650-22,700 as a crucial support zone around the 200-week MA.
On the upside, 23,000 remains a key resistance level. "Nifty remains just above the 20 SMA, which separates a pause from further weakness," said Om Mehra, technical research analyst at SAMCO Securities. Mehra noted that the index opened with a gap-up and climbed to 23,121 before selling pressure dragged it to the day's low of 22,650. The RSI settled at 46, below the neutral mark of 50, while India VIX rose 6.01% to 15.66.
Mehra sees support at 22,650, followed by 22,500, while resistance is placed at 22,900 and then 23,000. The near-term setup is likely to remain sideways as long as the index trades below 23,000.
Outlook For Bank Nifty
The Bank Nifty index came under renewed selling pressure on Wednesday, falling below the crucial 55,000 level to close at 54,976.90. The decline points to weakening momentum after the recent recovery. "Bank Nifty witnessed a breakdown from its upward consolidation pattern on Wednesday's session, indicating that the ongoing pullback rally may have run its course," said Bhuva.
He said the close below 55,000 signals the possibility of further downside in line with the prevailing trend. The immediate support is placed at 54,500, while 55,500 is likely to act as resistance.
Given the weakening structure, Bhuva favours a sell-on-rise approach and said accumulated long positions should be reviewed, particularly if the index fails to reclaim 55,000.