Markets End 3-Day Rally, Nifty Falls Below 24,400

Indian Equity Benchmarks Decline Amid Selling Pressure and Geopolitical Uncertainty

Indian equity benchmarks snapped their three-day winning streak on April 22, declining nearly 1 percent as selling pressure intensified in IT heavyweights and geopolitical uncertainty continued to weigh on investor sentiment.

The indices opened sharply lower, tracking weak global cues, with the Sensex dropping over 250 points and the Nifty slipping below the 24,500 mark. Selling pressure intensified during the session, dragging the Nifty to an intraday low of 24,352.90.

However, losses were partially pared as buying interest emerged in select pockets, particularly in FMCG, realty, and metal stocks, helping the market recover from the day's lows. At close, the Sensex was down 756.84 points or 0.95 percent at 78,516.49, and the Nifty was down 198.5 points or 0.81 percent at 24,378.10.

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The broader indices outperformed, with the Nifty Midcap index rising 0.2% and the smallcap index gaining more than 1%. The biggest losers on the Nifty were HCL Technologies, Tech Mahindra, Infosys, TCS, M&M, while gainers included Tata Consumer Products, Hindustan Unilever, Tata Motors Passenger Vehicles, NTPC, Hindalco Industries.

Among sectors, the IT index shed nearly 4%, while the Private Bank index fell 0.7%. In contrast, the Oil & Gas, FMCG, Media, Metal, and Realty sectors added 0.5% each.

The BSE saw nearly 150 stocks touch their 52-week high, including ABB India, Data Patterns, Adani Energy, Adani Power, Siemens, CG Power, Welspun Corp, NTPC, Nestle, HFCL, Granules India, JSW Energy, Hitachi Energy, Torrent Power, Lloyds Metals, Bank of Maharashtra, Aurobindo Pharma, AU Small Finance Bank, Tata Power, SAIL, and others.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

In stock-specific action, Sunteck Realty's share price added 4.5% post Q4 earnings. Shares of HCL Technologies fell nearly 11% after the company posted weaker-than-expected fourth-quarter earnings, while Aurobindo Pharma jumped 2% following a ₹800 crore buyback announcement.

Cyient DLM gained 4.5% despite reporting a 27.7% drop in Q4 net profit, whereas Tata Elxsi slipped 6% even after reporting better-than-expected earnings. PNC Infratech surged 7% after emerging as the lowest bidder for two highway projects, and BEML advanced 3% after securing an order worth ₹590 crore. Premier Explosives' share price jumped 7% on bagging an order worth Rs 350.2 crore.

Outlook for April 23

The benchmark indices witnessed profit booking at higher levels, with the Nifty ending 199 points lower and the Sensex down by 757 points. Among sectors, the IT index lost the most, shedding 3.85 percent, while the Energy and Defence indices rallied over 1 percent.

Technically, after a gap-down open, the market slipped below the 24,500/79,000 support zone and faced consistent selling pressure at higher levels. On daily charts, it has formed a small bearish candle, indicating indecisiveness between the bulls and the bears.

For day traders, as long as the market trades below 24,500/79,000, the weak sentiment is likely to continue. On the downside, it could slip to 24,300/78,200, further down, which could drag the index up to 24,200/78,000. On the flip side, above 24,500/79,000, it could retest levels of 24,600–24,675/79,300–79,500.

Nifty's Technical Outlook

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, notes that the Nifty opened on a weak note with a gap-down, tracking global cues after the U.S.–Iran failed to reach an agreement ahead of the ceasefire expiry. The index drifted lower in early trade but found buying support near the previous day's low zone of 24,355–24,350. A mild recovery followed, after which Nifty traded in a narrow range before second-round selling dragged the Index down again to the intraday support zone, eventually closing at 24,378, down 0.81%.

On the daily chart, Nifty formed a bearish candle with minor upper wick, reflecting intraday selling at higher levels. The index also closed within the previous day's range, indicating a lack of directional conviction.

Going ahead, the immediate resistance for Nifty is placed in the 24,530–24,550 zone. Any sustainable move above this zone could result in Nifty extending its up move towards 24,700, followed by 24,850 in the short term. On the downside, the zone of 24,200–24,180 is likely to act as an immediate support.