The Indian stock market staged a strong recovery on Wednesday, following a rally in global markets, on signs of easing geopolitical tensions in the Middle East and softening crude oil prices amid optimism over the US-Iran peace talks.
The BSE Sensex jumped 1,260.58 points, or 1.64%, to 78,108.15, while the Nifty 50 was up 393.40 points, or 1.65%, at 24,236.05. All the sectoral indices were trading in the green. Broader indices outperformed, as the Nifty Smallcap 100 and the Nifty Midcap 100 indices surged over 2% each.
However, analysts cautioned on the uncertainty around foreign institutional investor (FII) outflows, and potential earnings downgrades, which could limit valuation expansion.
“Markets remain highly reactive to movements in crude prices and geopolitical developments. In the near term, the outlook appears range-bound with a mild positive bias. A sustained uptrend will hinge on stable crude prices, resilient earnings performance, and continued strength in global market sentiment,” said Pranay Aggarwal, Director and CEO of Stoxkart.
Meanwhile, strong buying across the board on Wednesday, lifted Nifty 50 above the crucial technical level of 24,000, and the index is now heading towards the next resistance zone.
Nifty Technical Outlook
Nifty 50 index has approached a critical resistance zone near 24,300, aligning with the prior swing high and marking a key supply area.
“Nifty 50 is now approaching a crucial zone, with immediate support placed at 24,070 – 24,050, while resistance is seen around 24,370 – 24,400. A breakdown below 24,050 may drag the index towards 23,920 – 23,900, whereas a sustained move above 24,400 could extend the rally towards 24,550,” said Sudeep Shah – Head of Technical and Derivatives Research at SBI Securities.
On the derivatives front, he noted that significant call writing is seen at 24,300 – 24,400, while strong put base is positioned at 24,200 and 24,100. Market breadth remains robust, with an advance-decline ratio of 46:4 and PCR at 0.97.
Anshul Jain, Head of Research at Lakshmishree Investments said that the price structure indicates gradual strength, with higher lows suggesting underlying demand.
“The next major hurdle lies at the falling 20-week EMA around 24,571, which is likely to be tested in the coming weeks, provided there are no adverse geopolitical triggers. This level will be crucial in determining whether the index transitions into a broader trend reversal or faces renewed rejection,” said Jain.
On the downside, he believes immediate supports are placed in the 24,000 – 23,800 zone, which should act as a demand cushion.
“A breach below this band would weaken near-term momentum,” Jain said.
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.
