Nifty Eyeing 25,800 Amid Mixed Sector Performance and Trade Negotiation Hopes

Sensex and Nifty Start Higher as Auto and IT Sectors Shine, But Momentum Wanes

Nifty – The benchmark Indian stock indices, Sensex and Nifty, started Tuesday’s session on a positive note, marking the fifth consecutive day of gains, fueled by growing optimism around ongoing US-China trade negotiations and supportive domestic policy signals. However, the initial bullish momentum quickly faded, and the markets became volatile as the session progressed.

As of 9:32 AM IST, the BSE Sensex dropped by 160 points (0.19%) to stand at 82,284, while the Nifty50 slipped slightly by 5 points (0.02%), settling at 25,097.

Sector-Wise Market Movement: Auto, IT, Media, Metal, and Oil & Gas Outperform

In terms of sectoral performance, Nifty Bank and Financial Services sectors faced pressure, declining by 0.3% and 0.5% respectively. Conversely, sectors such as Nifty Auto, IT, Media, Metal, and Oil & Gas posted solid gains, with increases reaching up to 1.1%.

Broader market indices also saw positive movement: the Nifty Midcap100 edged higher by 0.2%, while the Smallcap100 advanced by 0.3%, indicating continued investor interest in mid and small-cap stocks despite overall market volatility.

Technical Outlook: Bullish Patterns Signal Potential Upside

Akshay Chinchalkar, Head of Research at Axis Securities, provided a technical perspective on the market’s current formation. He noted that regardless of whether the pattern resembles a pennant or a rectangle, the breakout points to a bullish trajectory with an upside target of 25,800 for the Nifty.

He highlighted that the 25,200 level serves as an important support on the upside. “As long as bears fail to push the index below 24,800, bulls maintain control,” Chinchalkar said, suggesting that the market still has room for upward movement.

Chinchalkar also emphasized that the conclusion of US-China trade talks expected today could act as a significant catalyst, influencing the immediate market trend.

Profit Booking and Market Consolidation Expected

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, weighed in on the near-term market outlook, suggesting that the Nifty is likely to consolidate within the 24,500 to 25,500 range in the short term.

Vijayakumar explained, “There are no immediate triggers that could push the Nifty beyond the upper band. Some profit booking is expected, which may cause minor pullbacks. However, ample liquidity in the market should ensure dips are bought, supporting consolidation.”

He further cautioned that while optimism surrounding a positive outcome of the US-China talks exists, any breakthrough is unlikely to be swift. “Given the recent strong run-up and stretched valuations, investors might consider booking some profits as a hedge against unexpected developments,” Vijayakumar added.

Selective Stock Picking and Caution Advised Amid Volatility

Ajit Mishra, Senior Vice President of Research at Religare Broking, echoed the cautious yet optimistic stance. He maintained a bullish outlook but recommended investors focus on selective stock picking, especially during any interim consolidation or market dips.

Mishra advised vigilance, particularly in the small- and mid-cap segments, which are currently buoyed by robust domestic inflows and sentiment. “Investors should emphasize sectors and stocks where the risk-to-reward ratio remains favorable, balancing potential gains against possible downside risks,” he said.

Summary: Market Navigates Mixed Signals as US-China Talks Near Conclusion

In summary, the Indian equity markets opened higher for the fifth straight session amid positive trade talks between the US and China and encouraging domestic cues. However, volatility quickly set in, pulling benchmark indices into a narrow negative territory by mid-morning.

Sectoral performances were mixed, with defensive financials underperforming while cyclicals like auto, IT, and energy sectors showed strength. Technical indicators suggest a cautiously bullish outlook with resistance around 25,800 for the Nifty, but the near-term path likely includes consolidation within a defined trading range.

Market participants remain watchful of the outcome of the US-China trade negotiations, which are anticipated to wrap up imminently and could become a pivotal factor shaping the short-term market trajectory.

Key Takeaways for Market Observers:

• Sensex and Nifty opened higher but soon faced selling pressure, turning volatile.
• Banking and financial sectors weakened, while auto, IT, metal, and oil & gas sectors led gains.
• Technical outlook remains bullish with a target near 25,800 for Nifty, contingent on holding support levels.
• Profit booking likely in the short term amid stretched valuations and pending trade talks.
• Selective stock picking and caution advised, especially in small- and mid-cap stocks.

This evolving market scenario underscores the need for investors to monitor global trade developments and domestic liquidity trends carefully as India’s stock markets navigate a critical juncture.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.