On Wednesday, the Indian stock market experienced a volatile session, with the benchmark Nifty-50 index closing 0.57% higher at 23,155.35 and the S&P BSE Sensex rising 0.75% to end at 76,404.99. Despite a bumpy trading day, both indices managed to stay in positive territory by the close. Among the sectoral performances, the Bank Index stood out with a modest gain of 0.32% at 48,724.40, reflecting a steady performance in banking stocks. The IT and pharma sectors also ended in the green, contributing to the overall positive sentiment.
However, not all sectors shared the same optimism. The realty and energy sectors saw significant losses, dragging down the broader market. In particular, the realty sector was weighed down by concerns over demand and market conditions, while the energy sector faced headwinds from fluctuating commodity prices. Despite these sector-specific challenges, the IT and pharma sectors, backed by strong earnings and investor confidence, helped lift the broader market sentiment.
On the flip side, the broader markets showed weakness as both midcap and small-cap indices lost nearly 1.5% each, signaling caution among investors. These segments often experience higher volatility, which likely contributed to the declines.
According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the 23,000 level will be a key support zone for the Nifty 50 index in the near term. If the index holds above this level, there is potential for the ongoing pullback to continue, with the market possibly bouncing back to the 23,250-23,325 range. This would indicate a continuation of the positive momentum in the short term, provided the 23,000 mark holds.
On the other hand, if the index falls below the crucial 23,000 support, it could face further downside pressure. In this case, the market might slide to levels around 22,900-22,880, indicating a bearish shift if the support is broken. Traders will likely keep a close watch on these levels for potential signals of either a rebound or further weakness.
This scenario highlights the importance of the 23,000 mark as a psychological and technical level for the Nifty, with traders likely adjusting their strategies based on whether the index stays above or drops below this support zone.