Indian stock markets experienced a volatile session on Tuesday, marked by profit-booking after a strong rally and influenced by both domestic and international factors. The Nifty 50 index closed down by 1.39% at 24,578.35, while the Bank Nifty also corrected by 0.8% to 54,940.80. Auto, IT, and FMCG sectors were among the key losers, while the pharma sector showed resilience and emerged as a gainer. Broader markets, including mid and small caps, also saw gains of up to 0.8%.
Trade Setup and Technical Outlook
According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the short-term uptrend remains intact, and the Nifty is expected to bounce back from crucial support levels around 24,500-24,400 in the coming sessions. Immediate resistance is placed at 24,800 levels. Bajaj Broking anticipates the Bank Nifty to move towards 56,400 in the short term, with support at 54,500-54,000.
Global Market Influences and Q4 Results
The overall market sentiment is influenced by geopolitical signals, institutional flows, and upcoming macroeconomic data. Investors are closely monitoring India's inflation data and the U.S. CPI data. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd., noted that Tuesday's dip was a natural breather after Monday's sharp gains.
India-Pakistan Relations
Developments regarding India-Pakistan relations continue to be a factor. Recent reports indicate that a ceasefire is holding along the tense border after several nights. Discussions are ongoing between the two countries' Directors-General of Military Operations, focusing on troop reduction from the borders and forward areas. While tensions remain, the commitment to avoid firing and hostile actions is being reaffirmed.
Stocks to Watch
Several experts have recommended specific stocks for buying or selling on Wednesday. Sumeet Bagadia, Executive Director at Choice Broking, suggests Schaeffler India Ltd. with a buy at ₹3951.9, a stop loss at ₹3813, and a target price of ₹4230.
Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi, and Shiju Koothupalakkal, Senior Manager — Technical Research at Prabhudas Lilladher, have also provided stock picks, including Cholamandalam Investment and Finance Company Ltd, Canara Bank , NTPC Ltd , Jamna Auto Industries Ltd , Kalyan Jewellers India Ltd and Garden Reach Shipbuilders & Engineers Ltd.
Market Sentiment and Analysis
Vinod Nair, Head of Research at Geojit Investments, observed that the domestic market experienced profit booking following a sharp rally, driven by easing global and domestic risks, including reduced trade war tensions and decreased Indo-Pak geopolitical stress. Nair anticipates that the divergence between large-cap stocks and the continued traction in mid-cap and small-cap segments will persist, supported by broad-based earnings improvements in Q4 results. There is increasing optimism around FY26 earnings growth, supported by fiscal and monetary policies, a rebound in external demand, a favorable monsoon outlook, and declining inflation and interest rates.
Key levels to watch out for
