Market Wrap

Indian equity markets staged a strong recovery on Tuesday, with the Nifty 50 advancing 1.30% to close near 24,774, its highest closing level since early March. The benchmark index opened with a sharp gap-up and remained firmly in positive territory through most of the session, reflecting broad-based buying interest. Although profit booking emerged during the second half, renewed buying towards the close, aided by the implementation of the new settlement procedure, helped the index finish near its intraday high while successfully reclaiming the important 200-day exponential moving average (EMA).

A notable feature of the session was the Nifty's significant outperformance relative to the Sensex, creating a short-term divergence that market participants will closely monitor in the coming days. Among sectoral indices, information technology stocks witnessed a remarkable turnaround after opening sharply lower, with buyers absorbing the initial weakness and driving the IT index back to the day's highs. The recovery highlighted improving investor confidence in the technology sector despite a weak opening.

Global cues remained mixed as most Asian and European markets traded lower despite Wall Street ending the previous session on a strong note. Concerns surrounding global economic growth and trade developments kept overseas markets under pressure, suggesting that the strength in Indian equities was primarily driven by robust domestic participation. Investors also continued to monitor the ongoing corporate earnings season, foreign institutional investor activity, and evolving global trade developments for further direction.

What's Ahead

Market participants will now shift their focus to Tuesday's weekly derivatives expiry, which comes immediately after the sharp rally and the rollout of the new settlement framework. The key technical level to watch will be whether the Nifty can sustain above the 200-day EMA and extend its breakout. Investors will also look for further clarity from SEBI and the NSE on the new settlement mechanism, while Q1 corporate earnings, FII investment trends, global trade-related developments, and upcoming U.S. economic data are expected to remain the primary factors influencing market sentiment.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The Nifty 50 has strengthened its technical structure after closing decisively above the 200-day EMA and all other key moving averages, reinforcing the broader bullish trend. The formation of a strong bullish candlestick, supported by a sharp late-session breakout, indicates sustained buying momentum, while the RSI at 66.87 reflects improving strength without entering extreme overbought territory. The derivatives setup also remains supportive, with a Put-Call Ratio (PCR) of 1.12 pointing to a balanced-to-positive outlook, although India VIX at 11.92 suggests a marginal increase in volatility. As long as the index sustains above the immediate support zone of 24,500–24,555, the bullish bias is expected to remain intact, with 24,820–24,900 acting as the immediate resistance zone. A decisive move above this resistance band could extend the ongoing rally, while any decline towards support is likely to attract fresh buying interest, keeping the near-term outlook Sideways to Bullish.

BankNifty

Bank Nifty continued to consolidate after a volatile session, finding strong buying support near the 50-day EMA and forming a pin bar-like candlestick on the daily chart, indicating demand at lower levels. Although the index underperformed the broader market, its ability to recover from intraday weakness and hold above key support reflects underlying resilience. As long as 57,850–58,000 remains protected, the broader structure is expected to stay constructive, while 58,666–58,800 remains the immediate hurdle that needs to be crossed to confirm stronger bullish momentum. A sustained breakout above this resistance zone could trigger fresh upside, whereas any dip towards support is likely to witness buying interest. Overall, the technical setup suggests a Sideways to Bullish outlook with a buy-on-dips strategy remaining favourable.

Sensex

The Sensex maintained its positive technical setup despite consolidating after a sharp gap-up opening, indicating healthy absorption of selling pressure at higher levels. The benchmark has now closed above its 20-day, 50-day, 100-day and 200-day EMAs, significantly strengthening the medium-term trend, while the RSI at 62.23 signals improving bullish momentum with room for further upside. Broad-based participation across key sectors further supports the constructive outlook, although intermittent profit booking cannot be ruled out following the recent rally. The 78,000–78,300 zone is expected to provide immediate support, while 78,900–79,200 remains the key resistance area. A sustained move above the resistance band could accelerate the ongoing recovery, whereas declines towards support are likely to attract buying interest, keeping the near-term outlook Sideways to Bullish.