Indian equity benchmarks ended marginally lower on Wednesday after witnessing high volatility, as markets recovered sharply from significant intraday losses amid mixed global cues and persistent foreign fund outflows.
The BSE Sensex closed lower by 122.52 points or 0.16 per cent at 76,171.08, while the NSE Nifty 50 declined by 26.55 points or 0.12 per cent to end at 23,045.25.
The market’s V-shaped recovery was particularly noteworthy, with the Nifty bouncing back by 346 points from its intraday low near 22,800. “A gradual recovery in select heavyweight stocks helped trim losses as the day progressed,” noted Mr. Ajit Mishra, SVP, Research at Religare Broking Ltd.
“The Indian market saw a slight recovery from the sharp intraday declines; however, overall sentiment remained weak due to elevated broader market valuations and muted Q3 earnings growth,” said Vinod Nair, Head of Research at Geojit Financial Services.
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Among the Nifty gainers, Bajaj Finserv led the pack with a 2.72 per cent rise, followed by SBI Life (+2.04 per cent), Shriram Finance (+1.87 per cent), HDFC Life (+1.66 per cent), and Tata Steel (+1.64 per cent). On the flip side, M&M was the top loser, dropping 3.20 per cent, followed by Eicher Motors (-2.36 per cent), BEL (-2.13 per cent), Power Grid (-1.55 per cent), and IndusInd Bank (-1.53 per cent).
The market breadth remained negative, with 2,435 stocks declining against 1,534 advances on the BSE. Notably, 721 stocks hit their 52-week lows, while only 45 stocks touched their 52-week highs, indicating broader market weakness.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, noted, “Due to rising uncertainty in global and domestic markets coupled with falling rupee and fund outflows, investors are trading cautiously and placing safe equity bets.”
The Indian rupee exhibited high volatility, trading between 86.25 and 86.95 against the US dollar. “The early strength was largely driven by short covering, but weakness quickly emerged, limiting gains,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
The Nifty Realty index emerged as the top sectoral loser, declining over 2.79 per cent, while Capital Market and PSU Bank indices gained over 1 per cent each. The Nifty Bank index closed marginally higher by 0.15 per cent at 49,479.45.
Market participants are closely watching the upcoming US CPI data release, which could provide further direction. “Concerns over excessive valuations are expected to sustain the ongoing consolidation phase. Investor confidence was further undermined by the Fed’s statement that it is ‘not in a hurry to lower interest rates,’” Nair added.
Technical analysts suggest the market might see some relief if it sustains above crucial support levels. “Until the previous low of 22,786 is broken decisively, the chances are high that Nifty might recover towards 23,500–23,600 in the near term,” said Rupak De, Senior Technical Analyst at LKP Securities.
The day’s price action formed a significant chart pattern, with Shrikant Chouhan, Head of Equity Research at Kotak Securities, pointing out the formation of a long-legged doji candle. “This indicates indecisiveness between bulls and bears. As long as the market is trading above 22950/75500, the pullback formation is likely to continue,” he explained. The pattern suggests potential support at the 22,800 mark, which coincides with January’s low.
In the commodities space, gold markets showed signs of cooling after their recent rally. Gold prices on Comex fell by $11 to $2,887, while MCX gold declined by ₹450 to ₹85,050. “While the broader bullish outlook remains intact, a near-term correction is likely. Gold is expected to trade within the ₹84,500–₹85,650 range,” observed Jateen Trivedi of LKP Securities. The precious metal’s movement remains closely tied to interest rate expectations and upcoming US inflation data.
Trading volumes in the NSE cash market showed robust activity, rising 20 per cent compared to the previous session, indicating strong participation despite the market volatility. The market’s recovery was particularly evident in the broader indices, with the Midcap index bouncing back 2.8 per cent and the Smallcap index surging 3.5 per cent from their respective intraday lows, though both ended the day marginally lower.
Looking ahead, experts advise caution given the persistent selling by foreign institutional investors and mixed earnings season. The market will likely remain focused on global cues and upcoming economic data for further direction.
