With an open-high formation and lack of follow-up buying, the index steadily weakened. In the second half, the decline intensified, erasing all morning gains, and Nifty eventually settled flat, just above 24,700.
This suggests that the GST-related positive news was largely priced in, prompting profit booking after the announcement.Currently, Nifty trades in a corridor of uncertainty, hovering around the mid-point of last week’s decline. Further direction is likely to emerge only once the dust around the GST outcome settles.
The index ultimately closed with a marginal gain of 19 points at 24,734.
In a day, marked by significant profit-booking, a few stocks managed to hold their ground. Leading the charge within the Nifty pack were M&M, Bajaj Finance, and Apollo Hospitals. Conversely, it was a tough session for names such as HDFC Life, Tata Consumer, and IndusInd Bank, which ended as the top losers.
Amongst the sectoral indices, it was a mixed picture. Nifty Auto, Financial Services, and FMCG emerged as the major gainers for the day, while sectors like Nifty PSU Banks, OIL/Gas, and IT suffered the most.The broader market echoed the cautious sentiment, with midcap and smallcap indices underperforming the benchmark. The Nifty Midcap 100 Index fell 0.67%, while the Nifty Smallcap 100 Index lost 0.71%.
On the global trade front, India is aiming to conclude a bilateral trade agreement with the US by November, while negotiations with the European Union have reached an advanced stage. With the EU being India’s largest trading partner ($137.4 billion in goods trade in FY24), both sides are targeting finalisation of the FTA by end-2025.
Back home, while headwinds persist from continued foreign institutional investor (FII) outflows and uncertainty around the US trade deal, the recent GST reforms are expected to boost consumer demand, support corporate earnings, and lift sentiment ahead of the festive season, said Siddhartha Khemka of Motilal Oswal. He added that he expects the market to gradually move higher.
According to Nagaraj Shetti of HDFC Securities, Nifty’s recent bounce has hit a hurdle, with current market action suggesting more consolidation or weakness. Key supports to watch in the near term lie at 24,550 and 24,400, while only a decisive move above the 25,000 mark could trigger fresh short covering, he said.
Rajesh Bhosale of Angel One said that the 24,900-25,000 zone is crucial, coinciding with the 50 and 89-DEMA. A weekly close above this band, he said, would strengthen the bulls’ position and open the path for further upside. “On the flip side, immediate support lies at 24,500, followed by 24,430. A sustained breach of this sacrosanct zone could negate recent positive momentum and drag the index further lower,” he added.
LKP Securities’ Rupak De said that Nifty pared most of its gains after a gap-up start driven by GST optimism. The daily close below the 21-EMA indicates a continuation of weakness, although the index appears close to a potential trend reversal. “A decisive move above 24,750 could pave the way towards 25,000. However, failure to close above 24,750 within the next two to three days may invite renewed selling pressure,” he said.
Nandish Shah of HDFC Securities pointed out that Nifty failed to sustain above the crucial 50-day DEMA, giving up all its morning gains to close near the day’s low. The index ended exactly at its 20-day DEMA (24,734). Strong support remains near 24,500, while a decisive close above 24,800 would provide a bullish confirmation on positional charts.
Looking ahead, immediate support lies in the 24,630-24,600 zone, said Sudeep Shah of SBI Securities. If the index slips below 24,600, the next key support is at 24,450. On the upside, the 24,850-24,880 range will act as a crucial hurdle.
