Extending losses to the second straight session, the Indian stock market benchmarks, the BSE Sensex and the Nifty50, ended marginally lower on Wednesday as the escalation in the Israel-Iran conflict weighed on investor sentiment. The domestic bourses consolidated in a narrow range as geopolitical tensions in the Middle East and caution ahead of the US Fed's policy outcome kept investors on edge.

The BSE Sensex closed at 81,444.66, down by 138.64 points or 0.17%, and the NSE Nifty50 settled lower by 41.35 points, or 0.17%, at 24,812.05. The broader market also saw selling activity, with the Nifty Midcap100 and the Nifty Smallcap100 indices falling 0.46% and 0.23%, respectively, amid profit booking.

"The markets traded lacklustre and ended marginally in the red, extending the ongoing consolidation phase. After a flat start, the Nifty edged higher initially but failed to sustain the momentum, primarily due to pressure from heavyweight stocks. It then moved within a narrow range and eventually settled at 24,812.05,” said Ajit Mishra, SVP-Research, Religare Broking.

He said that the markets will react to the outcome of the U.S. Fed policy meeting during early trade on Thursday. “While most expect no change in interest rates, the Fed's commentary—especially in light of the prevailing global uncertainty caused by geopolitical tensions and trade tariff concerns—will be more crucial.”

Top gainers and losers

D-Street saw a mixed bag in terms of the performance of the sectoral indices, with auto and banking ending slightly in the green, while IT, metal, and FMCG slipped lower.

Among the BSE Sensex pack, 20 of 3the 0 stocks ended in the red zone, led by Tata Consultancy Services (TCS), Adani Ports, Hindustan Unilever, Bajaj Finserv, and Nestlé India, falling by up to 1.8%.

On the other hand, IndusInd Bank, Titan, Mahindra and Mahindra, Maruti Suzuki India, and Asian Paints were among the Top 5 gainers, rising in the range of 5.1% to 0.74%. The other notable gainers were Bharti Airtel, Eternal, Axis Bank, UltraTech Cement, and HDFC Bank.

Nifty’s support zone at 24,500-24,400

Bajaj Broking, in a note, said that the Nifty formed a small bull candle with a long upper shadow, signalling consolidation ahead of the U.S. FOMC rate decision and the ongoing geopolitical tensions. The key support zone for the Nifty is 24,500–24,400, which marks a confluence of the 50-day EMA and the lower boundary of the five-week consolidation range, making it a crucial demand zone for the index.

“The index on expected lines is seen extending its ongoing five-week range-bound consolidation within the broader zone of 24,400–25,200. On the upside, the index faces immediate supply pressure near the 25,000-mark; a sustained breakout above this level could trigger a short-term pullback rally towards the upper boundary of the consolidation zone, pegged around 25,200.”

On the downside, the index has immediate support at 24,700; a breach below this will lead to an extension of the decline towards the lower band of the consolidation range placed around 24,500-24,400 levels, it added.

Rupak De, Senior Technical Analyst at LKP Securities, said a positive surprise from the Fed could lift both the global and the domestic markets, helping them shake off prevailing negativity. “On the upside, a decisive reclaim of 24,850 may trigger a rally towards 25,000 and higher, while a failure to move back above this level could drag Nifty down towards 24,500," he said.

Ajit Mishra of Religare Broking recommends that investors maintain a cautious approach until there is more clarity. In the meantime, market participants can consider selectively accumulating stocks that are showing relative strength amid the volatility, with a preference for large-cap and stronger mid-cap names.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)