Nifty Outlook: Indian stock markets ended trading on a strong note on Wednesday, carrying forward Tuesday’s gains. The market closed at a three-week high and Nifty remained firmly above 25,750. Trading started weak with selling pressure in IT stocks. Nifty slipped to an intraday low of 25,563 in the early session.
However, the market showed a sharp recovery as buying returned at lower levels and started recovering losses. After noon, the market remained range-bound with a positive trend. Ultimately Nifty closed at 25,776 with a gain of 48 points.
Tremendous selling in IT sector
Trent Ltd, Eternal and ONGC were the biggest gainers in Nifty. On the other hand, IT sector giants Infosys, TCS and HCLTech were among the top losers.
There was a sharp decline in IT stocks due to concerns related to Anthropic AI tool. Nifty IT index fell nearly 5%. Shares of Infosys, TCS, Wipro, Tech Mahindra, Persistent Systems, Coforge and HCLTech fell more than 7% in early trade. Infosys’ fall reached nearly 8%.
TCS’s market cap fell below ₹11 lakh crore. Only five IT stocks included in Nifty 50 together wiped off the market cap of about ₹2 lakh crore in the first half itself.
Big blow to HAL stock
Hindustan Aeronautics Ltd (HAL) shares fell 6%. A report said that the company has dropped out of the race to develop stealth fighter jet. Such a huge decline in HAL was last seen on 3 February 2025. Since then the market cap of the company has declined by about ₹ 18,000 crore.
How are the sectors?
Sector wise, except IT and healthcare, all the sectors closed in the green. Consumer durables, oil and gas and metals sectors were among the best performers.
Broader markets once again outperformed the benchmark. Nifty Midcap 100 recorded a rise of 0.63% and Nifty Smallcap 100 recorded a rise of 1.27%.
Which factors will be monitored next?
On the global front, investors will keep their eyes on the interest rate decisions of BOE and ECB on Thursday. Domestically, the December quarter results so far have been broadly in line with expectations. The market is getting support from this.
Siddharth Khemka of Motilal Oswal believes that Indian stock markets can remain strongly positive in future also. According to him, recent trade deals with America and Europe, Union Budget announcement and Q3 earnings season are supporting the market. However, in this environment, the bullishness may not be widespread but may be more sector or stock-specific.
Expert opinion on Nifty
On the technical front, Nagaraj Shetty of HDFC Securities says that 26,000 and 26,350 are important resistance levels for Nifty in the near term. On the downside, the level of 25,600 can act as immediate support.
According to Sudeep Shah of SBI Securities, the zone of 25,950 to 26,000 is the most important resistance for Nifty. If there is a strong breakout above this range, the index may first move towards 26,200 and then towards 26,400. At the same time, in case of a decline, the zone of 25,600 to 25,550 can remain a strong support.
Nifty trend strong
Nandish Shah of HDFC Securities said that Nifty has been successful in closing above its 50-day DEMA, which is currently around 25,647. This indicates that the index remains above important moving averages and the trend is still bullish.
According to him, the range of 25,500 to 25,650 is strong support. At the same time, upward resistance is visible at 25,863 and 26,373.
Consolidation in Bank Nifty
Talking about the banking sector, Nifty Bank Index has taken support on its falling trendline breakout. After the recent rise, the index is showing signs of consolidation. If Bank Nifty manages to stay above 60,000 in the coming sessions, it will show the internal strength of the sector.
Vatsal Bhuva of LKP Securities says that overall the chart structure of the market still remains bullish. As long as Nifty remains above its short-term 20-day and 50-day moving averages, it may be better to adopt a buy on dips strategy.
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