In a volatile trading session on Wednesday, September 18, 2024, Indian stock markets closed lower as investors remained cautious ahead of the US Federal Reserve’s policy decision. The BSE Sensex ended 131.43 points or 0.16 per cent lower at 82,948.23, while the Nifty 50 slipped 41 points or 0.16 per cent to close at 25,377.55.
The day saw significant fluctuations, with the Nifty reaching a new all-time high of 25,482 before succumbing to selling pressure in the afternoon. The market’s volatility was evident in the India VIX, which surged by 6.21 per cent to settle at 13.37.
Sectoral performance was mixed, with IT stocks bearing the brunt of the sell-off. TCS led the decline, falling 3.50 per cent, followed by Infosys (-3.08 per cent), HCL Tech (-3.07 per cent), Tech Mahindra (-2.83 per cent), and Wipro (-2.57 per cent). On the other hand, financial stocks showed resilience, with Shriram Finance emerging as the top gainer, up 4.22 per cent.
Among Sensex stocks, Bajaj Finance was the top performer, surging 3.65 per cent, while TCS was the biggest loser, shedding 3.49 per cent.
Market breadth remained negative, with 2,455 stocks declining against 1,520 advances on the BSE. Notably, 276 stocks hit their 52-week highs, while 27 touched their 52-week lows.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, commented on the market’s performance, saying, “A small negative candle was formed on the daily chart with upper and lower shadow, which is indicating high volatility in the market. An attempt of downside breakout of the narrow range movement of the last three sessions could be in the place of false downside breakout.”
Ameya Ranadive, Sr Technical Analyst at StoxBox, noted, “Indian markets saw fluctuations in early trade on Wednesday as investors remained cautious ahead of a key Federal Reserve meeting later in the day, where a rate cut cycle is anticipated.”
Vikram Kasat, Head - Advisory at PL Capital - Prabhudas Lilladher, observed, “This decline came amid caution in global markets ahead of the U.S. Federal Reserve’s policy decision, which is expected to guide near-term market sentiment.”
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd, provided technical insights, stating, “Technically, the index formed a spinning top candle on a daily scale near its all-time high, signaling some short-term hesitation.”
Ajit Mishra, SVP of Research at Religare Broking Ltd, advised, “Despite a generally positive tone, traders are advised to hold off on initiating new positions until the markets stabilise.”
Hardik Matalia, noted that the Nifty index made a new record high of 25,482.2, but failed to sustain these levels due to selling pressure, ultimately closing below the 25,400 mark. The formation of a Doji candle on the daily chart signals indecision in the market and a potential near-term reversal.
According to the Open Interest (OI) data shared by Matalia, the highest OI on the call side was observed at the 25,500 and 25,600 strike prices, while on the put side, it was concentrated at the 25,300 and 25,200 strike prices.
The market’s focus now shifts to the outcome of the US Federal Reserve meeting, which is expected to significantly influence global market sentiment. Analysts suggest that any dips to the support levels of 25,200-25,100 for Nifty could present buying opportunities, while a decisive move above 25,500 could lead to further upside.
As the markets navigate through this period of uncertainty, investors are closely watching for cues from global economic indicators and corporate earnings to gauge the future direction of Indian equities.