The benchmark stock market indices exhibited a mixed performance on Tuesday, with investors adopting a cautious stance in anticipation of the release of retail inflation data later in the day.
The S&P BSE Sensex managed to conclude the session on a positive note, gaining 94.05 points to settle at 67,221.13. However, the NSE Nifty50 found itself below the crucial 20,000 level, experiencing heightened volatility throughout the day.
The broader market indices faced a more pronounced decline, as the Nifty Midcap 100 registered a drop of over 3 percent, while the Nifty Smallcap 100 saw a decline of over 4 percent.
Among the high-weightage sectoral indices, Nifty Bank, Nifty Auto, and Nifty Financial Services ended the day in negative territory. Notably, Nifty Oil and Gas and Nifty Realty emerged as the biggest losers among the sectoral indices. In contrast, Nifty IT was the sole major sectoral index to record gains, posting an increase of over 1 percent.
Among the top gainers on the Nifty 50 were TCS, L&T, Infosys, Ultratech Cement, and Dr. Reddy’s. Conversely, the top losers included BPCL, NTPC, Power Grid, Adani Enterprises, and Coal India.
According to Om Mehra, a research analyst at Choice Broking, "The Nifty benchmark indexes witnessed a significant sell-off shortly after opening with a gap up, one day after reaching an all-time high." Mehra added that such sideways movements after a substantial rise could be viewed as a healthy development in the long run.
From a technical perspective, Mehra noted that the Nifty index recently formed a bearish candle on the daily chart, characterized by a lengthy wick. The index's closure below the critical 20,000 mark suggests that it may undergo a period of consolidation or experience profit booking at higher levels.
Mehra also advised that long-term investors might consider exploring sectoral rotation in blue-chip stocks. In contrast, short-term traders may find it prudent to incorporate hedging strategies into their trading approaches.
