The Indian stock market traded lower on Friday amid weighed down by selling in banking, IT and auto stocks. Sentiment remain cautious after a sharp jump in domestic retail inflation.
The Sensex declined over 400 points, while the Nifty 50 slipped below 25,200. The Bank Nifty index fell nearly 1%.
Broader markets also reeled under selling pressure, as the Nifty Smallcap 100 and the Nifty Midcap 100 indices shed over half a percent each.
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Among sectors, Nifty Auto, Nifty Realty, Nifty IT, Nifty Private Bank, Nifty Metal, Nifty FMCG and Nifty Oil & Gas suffered losses, while Nifty Pharma was the only one to trade in the green.
Globally, Asian markets traded higher, while Wall Street ended lower overnight after rising bets on Federal Reserve interest rate hike pushed US bond yields back above 5%.
In the currency market, rupee opened flat at 94.04 against the US dollar.
On the macroeconomic front, India’s retail inflation rose to 6.09% in October from 5.54% in September, its highest level in two years and above the RBI’s 6% upper tolerance limit.
The data keeps the rate outlook hawkish ahead of the RBI’s December 4 policy meeting.
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Meanwhile, crude oil prices rebounded, with Brent oil prices trading above $95 a barrel, after attacks by Houthi forces on Saudi energy facilities revived supply concerns.
“The near-term outlook remains cautious, with market direction likely to be shaped by movements in crude oil prices, US Treasury yields and foreign portfolio flows. A sustained moderation in oil prices, coupled with continued FPI buying, could provide further support to the rally,” said Ponmudi R, CEO of Enrich Money.
However, a renewed rise in bond yields or fresh escalation of tensions in the Gulf could weigh on sentiment and prompt profit-booking at elevated levels, he added.
Technical Outlook
According to Ponmudi R, the immediate resistance is placed in the 25,400 – 25,500 zone, and a decisive breakout above this range could strengthen the upward momentum and open the way towards 25,800 and potentially 26,000.
“On the downside, 25,200 – 25,100 remains the immediate support zone, followed by the crucial support near 25,000 – 24,800. Momentum indicators continue to favour the broader bullish structure, with the RSI near 80 indicating overbought conditions. The MACD remains positive, although the recent moderation in its histogram suggests that the rally could see further consolidation,” he said.
Overall, the near-term outlook remains bullish but stretched. Sustained trading above 25,200 will be important to preserve the positive structure, while a decisive move above 25,500 could trigger the next leg of the rally, he added.
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