Sensex ends flat, Nifty below 25,200; stock market strategy for Wednesday

Domestic equity benchmarks Sensex and Nifty closed lower for the second consecutive session on Tuesday, weighed down by weak investor sentiment following the sharp hike in H-1B visa costs. Adding to the pressure, the rupee tumbled to a record low of 88.76 against the US dollar.

At the closing bell, the Sensex slipped 57.87 points, or 0.07 per cent, to end at 82,102.10, while the Nifty50 declined 32.85 points, or 0.13 per cent, to settle at 25,169.50.

Vatsal Bhuva, Technical Analyst at LKP Securities, said the 50-pack index found support near its 20-day EMA and closed near the 10-day EMA, maintaining a positive broader outlook as long as it holds above the 50-day EMA at 24,900.

“However, significant call writing was witnessed at the 25,300–25,400 zone, where a hanging man candlestick emerged after consecutive buying sessions. This suggests short-term consolidation. For the near term, Nifty is likely to trade in a range of 25,100–25,400, with 25,100 acting as strong support and 25,400 serving as key resistance for the index," Bhuva said.

Tech Mahindra led the losers on the Sensex, slipping 2.07 per cent to Rs 1473. Trent dropped 2.04 per cent, while Ultratech Cement, Hindustan Unilever, Asian Paints, and Eternal declined 1.90 per cent, 1.79 per cent, 1.36 per cent and 0.95 per cent, respectively.

Five stocks namely, HDFC Bank, Hindustan Unilever, ICICI Bank, Bharti Airtel and ITC contributed heavily to the Sensex’s decline. 

Among the sectoral indices, the BSE FMCG index slipped 1.28 per cent to settle at 20,376.46, while the BSE IT index was down 0.63 per cent to close at 34,769.38.

Within the BSE Sensex pack, Bajaj Finance, Tata Steel and Maruti Suzuki touched fresh 52-week highs.

Overall, out of the 4,311 active stocks traded on the BSE, 1,814 ended with gains, while 2,339 settled lower and 158 remained unchanged. As many as 173 stocks scaled their 52-week highs during the session. A total of 66 others hit their 52-week lows. The session also saw 239 stocks locked at their respective upper circuits and 156 others at lower circuits.

Vinod Nair, Head of Research, Geojit Investments Limited, said the domestic equity market traded rangebound and ended flat, indicating continuation of the consolidation. Broader sentiment stayed cautious, with small- and mid-cap stocks lagging the benchmarks. 

“Sector-wise, autos, metals, and financials gained on signs of robust festive demand post-GST cuts, while FMCG and realty stocks came under pressure from profit booking. The rupee hit a record low amid persistent FII outflows, exacerbated by ongoing concerns over US tariffs and a widening trade deficit,” Nair said.

“Global uncertainties and prospects of a Fed rate cut boosted gold’s safe-haven appeal. On the positive side, 8 core industries’ strong production data underscores the resilience of the domestic economy, supporting optimism around external challenges," Nair added.

Ajit Mishra – SVP, Research, Religare Broking Ltd, said that on the sectoral front, auto and metal stocks stood out, gaining ground, while PSU banks also held up. On the other hand, FMCG, IT, and realty lagged, with IT feeling the impact of worries about rising US visa fees (H-1B) and their possible effect on earnings. 

“Broader market indices—midcap and smallcap—showed mild weakness, reflecting selective participation rather than broad-based strength. Domestically, optimism from recent GST reforms and festive demand continues to support sentiment, but external headwinds—visa-fee hikes, foreign outflows, and rupee weakness—are weighing in,” Mishra said.

“Technically, Nifty appears to be consolidating range after three successive weeks of rise. We thus recommend a cautious stance: focus on sectors with relative strength, manage risk carefully, and avoid large directional bets until clearer cues emerge,” Mishra added