Technical View: Analysts Warn of Market Caution Amid Middle East Tensions, Nifty Targets 23,500 Level

Indian Stock Market Sees Recovery Amid Global Cues

The benchmark equity indices, Sensex and Nifty, settled higher on Tuesday, driven by a decline in crude oil prices and positive global cues. This helped to stabilize investor sentiment, with buying in IT shares contributing to the recovery from early losses.

The Sensex rose by 509.73 points, or 0.69 percent, to close at 74,616.58. The index touched a high of 74,686.32 and a low of 73,282.41, swinging 1,403.91 points throughout the session. The Nifty also showed a strong performance, climbing 155.40 points, or 0.68 percent, to close at 23,123.65.

Despite the positive trends, analysts cautioned investors to remain cautious due to ongoing global uncertainties. Analysts at Religare Broking and LKP Securities emphasized the need for a cautious stance, focusing on stock-specific opportunities and managing overnight risks.

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The Nifty is experiencing a volatile recovery phase, characterized by sharp intraday swings. This indicates a cautiously positive undertone, with the index approaching its immediate hurdle around the 20-day exponential moving average, placed near 23,400. A pause in the ongoing upmove cannot be ruled out, with support seen in the 22,700-22,500 range.

Key Sectoral Performers

The Nifty IT emerged as the top sectoral gainer, followed by Nifty Realty. In contrast, Nifty Tourism and Nifty PSU Bank indices ended lower. Among individual stocks, Wipro and Hindalco were the top gainers, while Dr Reddy's and Indigo ended in the red.

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Technical Analysis

Analysts at SBI Securities noted that Nifty IT has moved into the leading quadrant of the relative rotational graph, indicating strength and momentum. The midcap index mirrored the broader market trend, recovering after a gap-down opening and forming a small bullish candle, indicating buying interest at lower levels.

On Bank Nifty, immediate resistance is placed in the 53,100-53,200 zone. A sustained move above this range could push the index towards 53,500 and then 53,800 in the short term. On the downside, support is seen at 52,300-52,200.