The Indian equity market remained under selling pressure on Wednesday amid weakness in global markets and rising crude oil prices. The Nifty was trading around 24,116 after declining by about 40 points, while the Bank Nifty fell around 120 points to 57,140.
The benchmark indices opened lower, extending the weakness into the seventh consecutive trading session. However, buying returned to IT stocks, with the Nifty IT Index gaining around 1%. HCL Technologies was among the major IT stocks showing strength. FMCG, media and some Oil & Gas stocks also traded with mild gains in early trade.
Crude oil prices remained around $91 per barrel for the second consecutive day. India imports a large share of its energy requirements, making higher crude oil prices an important market risk. Continued increases in oil prices can put pressure on the rupee, inflation and corporate costs. Investors are therefore closely tracking developments in global energy markets and geopolitical events.
Asian markets also remained under pressure. Japan’s Nikkei was trading more than 2.50% lower. US equity markets had closed lower on Tuesday, while Dow Futures were also trading with a weak bias on Wednesday morning. The weakness in global markets was weighing on the Indian equity market.
The Nifty50 Advance-Decline Ratio stood at 19:31 in early trade, with 19 stocks advancing and 31 declining. HCL Technologies, Nestle India, Sun Pharma and Eternal were among the top gainers, while Hindalco, Tata Steel, Mahindra & Mahindra, Coal India and Bajaj Finserv were among the major declining stocks.
Jigar S. Patel, Senior Manager at Anand Rathi Investment Services, said the Nifty was currently trading below its 200-EMA, indicating a weak market trend. He said the RSI was around 43 and remained below the neutral level of 50, indicating that buyers had not fully regained dominance.
According to the technical levels cited by Patel, 24,000 is an important support level for the Nifty, while 24,200 could act as a key resistance. If the Nifty sustains above 24,200, market sentiment could improve and a recovery could begin. Conversely, a move below 24,000 carries the risk of further selling pressure.
