The Indian equity markets closed lower for the second consecutive session on Thursday, as volatility persisted amid weekly F&O expiry. Investor sentiment remained cautious, weighed down by foreign fund outflows, weakness in the Indian rupee, and lingering uncertainty surrounding the India-U.S. trade deal, with the 90-day tariff pause nearing its end.

The BSE Sensex ended the session at 83,239.7, down 170.22 points or 0.2%, while the NSE Nifty50 slipped 48.1 points, or 0.19%, to settle at 25,405.3.

After an initial uptick, the benchmark indices oscillated in both directions, while volatility increased in the final trading hours, with the Sensex tumbling 610 points from its intraday high and the Nifty50 retreating 182 points from the day’s peak.

Earlier in the day, the 30-share Sensex had surged by as much as 440 points, or 0.52%, to touch an intraday high of 83,850, while the Nifty50 rose 134 points to hit a session high of 25,587.50.

"The domestic equity markets continued to consolidate as profit booking followed last week's sharp rally. Investors remain watchful of developments surrounding the potential U.S.–India trade agreement, with the 90-day pause nearing its end,” said Vinod Nair, Head of Research, Geojit Investments.  

“FIIs have turned cautious in the recent days due to premium valuation. Despite these headwinds, sentiment remains supported by optimism surrounding the upcoming earnings season and the weakening U.S. dollar index," he added.

The broader indices also mirrored this movement and closed on a flat note. The Nifty Midcap100 index ended flat with a positive bias, while the Nifty Smallcap100 fell 0.26%.

“The broader market mood remained cautious, as investors stayed on the sidelines ahead of the anticipated U.S.-India trade agreement, keeping overall sentiment subdued,” said Sundar Kewat, Technical and Derivatives Analyst, Ashika Institutional Equity.

Top gainers and losers

Among the Sensex constituents, 18 of the 30 stocks settled in negative terrain. The top five losers were Kotak Mahindra Bank, Bajaj Finserv, Bajaj Finance, Adani Ports, and Titan, falling in the range of 1.9% to 0.76%. On the other hand, Maruti Suzuki, Infosys, Asian Paints, NTPC, and Hindustan Unilever were among the top five gainers.

Sectors were a mixed bag, with auto and pharma ending in the green, while metal and realty closed in the red.

The market breadth was slightly positive, with 2,009 of the 4,168 stocks traded on the BSE advancing, while 2,001 declined, and 158 ended unchanged. As many as 148 stocks hit their 52-week highs, while 54 touched their 52-week lows.

On the derivatives front, the market breadth remained negative with 96 stocks rising and 133 falling. A significant build-up in open interest was observed in Bosch Ltd, Blue Star, 360 One WAM, Nykaa, and DMart, indicating active participation and positioning in these counters, showed data by Ashika Institutional Equity.

Nifty outlook

In the absence of any fresh trigger, the mixed trend among heavyweights capped the Nifty's directional move. However, the overall trend remains bullish and is expected to stay intact unless the index decisively breaks below the 25,200 mark. On the upside, the 25,650–25,750 zone is likely to act as an immediate hurdle, said Ajit Mishra, SVP-Research, Religare Broking.

“Individual stocks continue to offer ample opportunities, supported by rotational buying across sectors and noticeable resilience in the broader market. Participants should align their positions accordingly, with a strong focus on stock selection," he said.

For the Nifty, key positional support lies at 25,200–25,100 levels being the confluence of the 20 days' EMA and the upper boundary of the recent consolidation breakout area (25,200-24,500), which is expected to act as a support level, showcasing change of polarity, where previous resistance turns into support, said Bajaj Broking in a note.

In the case of Bank Nifty, key support is placed at 56,000–55,500 region, representing a confluence of key technical indicators—including the 50-day EMA and the 61.8% Fibonacci retracement of the recent rally (55,149-57,614). “We expect the index to enter consolidation in the range 56,000-57,500 in the coming sessions. Only a move above 57,500 will open further upside towards 58,500 levels in the coming weeks.”

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