Indian benchmark indices extended their gains on Tuesday, October 6, rising for a second consecutive session as short covering emerged following the recent heavy selloff. The rebound came after the Sensex and Nifty 50 had extended their losing streak to an eighth consecutive week for the week ended October 1, marking their longest such run in 25 years.
In today’s deals, Sensex rose over 200 points or 0.3% to its day’s high of 72,594.21, while Nifty advanced 72 points or 0.3% to 22,628.10. The Nifty snapped a four-session losing streak in the previous session, rising 133 points to close at 22,555. The index rose around 1% in the 2 sessions combined.
The recovery was supported by easing concerns around crude oil prices and signs of renewed diplomatic efforts in the US-Iran conflict, although geopolitical uncertainty remained a key overhang for investors. Oil prices steadied after falling nearly 2% on Monday. Rising Persian Gulf exports and Saudi Arabia’s decision to cut prices pointed towards improving supply conditions. Brent crude traded near $100 a barrel, while West Texas Intermediate remained above $89.
Domestic factors also provided support. Healthy second-quarter business updates and the appointment of Anup Bagchi as HDFC Bank’s MD and CEO aided sentiment towards banking stocks. Meanwhile, Accenture’s fourth-quarter results provided a positive signal for the IT sector, adding to the broader improvement in market sentiment.
The gains came on Nifty expiry day, making the session particularly important for traders as volatility typically increases around the expiry of index derivatives. At the same time, continued institutional selling remained a concern for the broader market.
Can the bulls sustain the rally?
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said sustaining the market recovery could prove difficult as elevated US bond yields continue to encourage foreign investors to sell Indian equities. He expects the market to remain in a ‘sell on rally’ mode, with FIIs offloading large caps while domestic institutions absorb the selling.
He said a sustained recovery would require a sharp decline in crude oil prices, although visibility remained limited.
“A sustained rally in the market will require sharp dip in crude prices. But there is no clarity on this front. This uncertainty will weigh on the central bank when the RBI Governor announces the MPC policy decision tomorrow.”
Vijayakumar said a 25 basis point rate hike was already priced in, making the RBI’s policy stance and its growth and inflation projections the key focus. He added that a rate hike could support banks by improving margins on floating-rate loans, while strong deposit and credit growth remained positive for the sector.
“A rate hike is already discounted by the market and, therefore, the focus of the market participants would be on the policy stance and the RBI’s estimates on growth and inflation.”
The market’s near-term direction will depend on crude prices, FII flows and the RBI’s signals, along with whether buying interest can absorb continued foreign selling.
Nifty Expiry Today Prediction: Technical Outlook
The Indian equity market remained positive with traders weighing the possibility of a near-term recovery against the broader weakness seen in recent sessions. However, technical analysts continued to see resistance at higher levels. With the index approaching key support and resistance zones, traders are likely to watch the 22,400–22,750 range closely for directional cues.
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said Nifty’s latest session formed a high-wave candle, reflecting volatility as the index moved sharply in both directions. The index touched 22,621 in the first hour before giving up gains, but recovered in the second half to close around 22,550.
“Strength above last two sessions’ almost identical high of 22,621 will open further pullback towards 22,750 and 23,000 levels in the coming sessions. Failure to move above last two sessions’ high will signal consolidation,” he noted.
Mukherjee said Nifty could remain in the 22,200-22,620 range ahead of the RBI monetary policy outcome if it fails to cross the recent highs. On the downside, a break below 22,182, the April 2026 low, could extend the decline towards 22,000 and the CY2025 low of 21,743.
He added that a meaningful trend reversal would require the index to establish a sustained higher high-higher low structure and reclaim the 23,000-23,100 zone.
Meanwhile, Hitesh Tailor, Technical Research Analyst at Choice Broking, said the near-term structure remained cautious, with buyers defending lower levels while selling pressure continued around higher zones. He placed immediate support at 22,400-22,450 and resistance at 22,700-22,750.
“The near-term tone is cautiously constructive, supported by a firm opening indication and improved global cues. However, the broader setup remains tentative after the recent decline, with momentum yet to strengthen decisively,” Tailor stated.
Tailor added that a sustained recovery during the opening hours, accompanied by broader market participation, would be important to determine whether the current rebound could extend further.
Furthermore, Shrikant Chouhan, Head Equity Research at Kotak Securities, highlighted that the market had formed a reversal pattern following a prolonged correction on daily and intraday charts, although the short-term outlook remained weak.
“As long as the market trades above these levels, the pullback is likely to continue. On the upside, the index could rebound to 22,700/72800, with further gains potentially taking it to 22,800/73000,” he advised
Chouhan identified 22,400 and 22,450 as key support levels for day traders. A break below 22,400, he said, could increase selling pressure and push the index towards the 22,250-22,200 zone.
Key Nifty levels to watch
– Immediate support: 22,400-22,450
– Major support: 22,200-22,182
– Next downside levels: 22,000 and 21,743
– Immediate resistance: 22,621
– Major resistance: 22,700-22,750
– Next upside target: 22,800
– Major reversal zone: 23,000-23,100
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
