Technical View: Analysts Caution of Corrective Phase Resumption Below 23,150

Indian Equities Remain Cautious Amid Global Uncertainty

The benchmark equity indices, Sensex and Nifty, settled almost unchanged on Thursday as investors remained cautious in the face of ongoing uncertainty in West Asia, persistent foreign fund outflows, and ahead of the Reserve Bank of India's monetary policy outcome on Friday.

The Nifty attempted a recovery after opening lower but failed to move above the previous session's high and settled nearly flat at 23,416.55, up 10.95 points or 0.05 percent. The Sensex, on the other hand, edged up 13.84 points or 0.02 percent to close at 74,360.01. During the session, it touched a high of 74,544.24 and a low of 73,807.30, moving in a range of 736.94 points.

Analysts have warned that a break below the 23,150 level could lead to a fresh corrective phase in the market. The market is expected to remain range-bound, with stock-specific movements dominating broader trends, until a clear direction emerges.

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The market's technical outlook suggests that the 23,550-23,700 zone is expected to act as an immediate resistance area for the Nifty. A fall below 23,150 could trigger a resumption of the corrective phase. On the other hand, a sustained move above 23,580 could extend the ongoing pullback rally and pave the way towards the 23,700 mark.

In terms of sectoral participation, energy, financial, and pharma stocks lent support, while metal and IT shares remained under pressure. The broader market witnessed volatility but ended with gains of nearly 0.5 percent each, indicating selective strength beyond the benchmark indices.

Bank Nifty, led by SBI Securities' Sudeep Shah, has outperformed the benchmark indices over the last three trading sessions and has formed a base near its previous swing low. However, it continues to trade below key moving averages. The daily Relative Strength Index (RSI) indicates the absence of a strong directional bias, suggesting sideways movement in the near term.

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The Reserve Bank of India's monetary policy outcome on Friday will be closely watched by investors, who will be looking for signals on rates, growth, and inflation in an uncertain global environment and concerns around a weak monsoon.