Market Wrap

Indian equities opened on a weak note on Wednesday, tracking a gap-down indicated by GIFT Nifty. The Nifty slipped to an intraday low near 26,068 in the first half as early selling pressure dominated. However, value buying at lower levels helped the index stage a steady recovery through the afternoon session, allowing it to close near 26,150, down a modest 0.16%.

Sectorally, IT stocks stood out, with the IT index rebounding sharply from its 50-day EMA, led by renewed interest in mid- and small-cap IT names-suggesting selective accumulation after recent corrections. In contrast, broader market participation remained mixed, highlighting continued investor caution despite supportive domestic macro signals.

Global cues were neutral to mildly positive. While US markets closed firm overnight, Asian and European markets traded mixed, weighed down by uncertainty around global growth and policy direction. On the domestic macro front, India’s first advance estimate for FY26 GDP growth at 7.4% (vs 6.5% in FY25) offered a strong structural tailwind, driven by resilience in services and manufacturing. Still, near-term market direction remains clouded by derivative positioning and stock-specific churn.

What's Ahead

While the upbeat FY26 GDP growth estimate provides a supportive medium-term backdrop, the Nifty continues to lack clear near-term direction. Heavy call writing at the 26,200 strike highlights strong overhead supply, making the 26,200–26,250 zone a crucial hurdle for any sustainable upside. On the downside, 26,080 and 26,050 remain key support levels; a break below these could invite fresh short-term pressure. Ongoing weakness in index heavyweights such as ITC, Reliance Industries, HDFC Bank, Trent, Cipla, and Maruti is also weighing on overall sentiment, keeping traders cautious.

Globally, attention will shift to upcoming US services PMI and employment data, which could influence expectations around growth, inflation, and interest rates. Any surprise in these indicators may impact foreign institutional flows and add to near-term volatility in domestic markets. Until clearer global and derivative cues emerge, markets are likely to remain range-bound, with stock-specific action and selective sector rotation continuing to dominate trading activity.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The Nifty 50 extended its corrective phase for the third consecutive session, but the ability to hold above the 20-day EMA and close near the opening level signals underlying support at lower levels. The formation of a doji candle reflects indecision among participants ahead of the earnings season, with neither bulls nor bears showing strong conviction. Momentum indicators are cooling, with the RSI easing to 55, suggesting moderation in bullish strength rather than a trend reversal. As long as the index holds above 25,991–25,897, the broader structure remains constructive, while a decisive move above 26,296–26,391 is required to revive upside momentum.

Bank Nifty

The Bank Nifty closed marginally lower but displayed resilience by recovering from the intraday low and settling closer to the day’s high, indicating buying interest at lower levels. Despite pressure from heavyweight stocks, the RSI remains above 60, pointing to sustained bullish momentum in the broader trend. The index continues to trade in a consolidation band, with immediate support placed at 59,590–59,342. A sustained move above 60,392–60,640 could trigger a fresh leg of upside, while a breakdown below support may invite short-term profit booking.

Nifty Financial Services

The Nifty Financial Services index remained under pressure, reflecting broad-based selling across lenders and NBFCs, which capped intraday recovery attempts. The price action suggests a short-term corrective bias, with weaker market breadth reinforcing cautious sentiment. Immediate support is seen at 27,644–27,514, and a break below this zone could deepen the correction. On the upside, the index needs to reclaim 28,063–28,193 to signal a resumption of bullish momentum, failing which range-bound to mildly negative action may persist.

Sensex

The Sensex ended marginally lower, mirroring the broader market’s consolidation phase, as strength in IT stocks was offset by weakness in banking, FMCG, and auto names. The index continues to hover near its short-term support zone, indicating a lack of aggressive selling but also limited follow-through buying. Immediate support lies at 84,607–84,401, which is crucial to maintain the current structure. On the upside, a sustained breakout above 85,274–85,480 would be needed to re-establish bullish momentum, while failure to hold support could lead to further sideways-to-negative consolidation.