Stock market news: Indian equity benchmarks finished in the red on Tuesday, as early optimism surrounding the resumption of India-US trade talks gave way to aggressive profit-taking.
Nifty 50 ended the session at 25,732.30, down 58 points or 0.22%, while Sensex shed 250 points to close at 83,627.69. Markets surrendered significant intraday gains, with Sensex tumbling more than 900 points from its peak as heavyweights like Reliance Industries and Larsen & Toubro faced selling pressure.
On the sectoral front, consumer durables and realty were the primary laggards, whereas Nifty Bank showed relative resilience, closing marginally higher.
The overall market breadth remained weak, with an advance-decline ratio of approximately 15:35 among Nifty 50 stocks, reflecting broader caution. Geopolitical tensions in the Middle East and persistent FII outflows continue to weigh on sentiment.
Two stock recommendations by MarketSmith India:
Buy: Equitas Small Finance Bank Ltd (current price: ₹68)
- Why it’s recommended: Strong retail-focused loan book, growing MSME & microfinance franchise, improving asset quality, rising deposit base, healthy net interest margins, expanding branch network, strong capital adequacy, digital lending capabilities, increasing financial inclusion reach, and stable earnings growth.
- Key metrics: P/E: NA, 52-week high: ₹75.50, volume: ₹47.45 crore
- Technical analysis: Flat base breakout
- Risk factors: High exposure to unsecured loans, asset quality sensitivity, credit cost volatility, intense banking competition, rising funding costs, regulatory constraints on SFBs, economic slowdown impact, pressure on margins, higher operating expenses, and dependence on retail borrowers.
- Buy: ₹67–69
- Target price: ₹77 in two to three months
- Stop loss: ₹64
Buy: Alkem Laboratories Ltd (current price: ₹5,860)
- Why it’s recommended: Strong domestic formulations franchise, well-known chronic therapy brands, expanding U.S. & international business, consistent revenue and profit growth, healthy operating margins, strong cash generation, low debt balance sheet, wide product portfolio, strong R&D pipeline, and growing institutional ownership.
- Key metrics: P/E: 29.21, 52-week high: ₹5,933.50, volume: ₹107.24 crore
- Technical analysis: flat base breakout
- Risk factors: The US FDA compliance risk, pricing pressure in US generics, intense domestic competition, input cost inflation, currency fluctuation risk, regulatory policy changes, dependence on key brands, slower new product launches, margin volatility, and litigation risk.
- Buy at: ₹5,830–5,900
- Target price: ₹7,100 in two to three months
- Stop loss: ₹5,630
Nifty 50 recap
On Tuesday, Indian equities ended marginally lower amid a choppy, range-bound session, as selective sectoral strength was offset by profit-taking in defensive and consumption-linked stocks. Nifty 50 closed at 25,732.3, down 0.22%, after oscillating between 25,603 and 25,900, while Sensex also settled modestly in the red.
Market breadth was evenly poised, with 1,586 stocks advancing against 1,542 declines, reflecting a balanced undertone despite the index-level softness. On the sectoral front, Nifty IT (+0.65%), PSU Banks (+0.78%), Metals, and Financial Services outperformed, aided by stock-specific buying and relative valuation comfort.
On the other hand, consumer durables (-0.89%), pharma (-0.47%), FMCG, auto, and realty stocks saw pressure, weighing on headline indices. Banking performance was mixed, with private banks closing largely flat, while PSU Banks extended their gains. Mid- and small-cap segments showed resilience, broadly tracking the advance-decline ratio.
Momentum indicators present a mixed but instructive picture. The RSI has cooled off from higher levels and is currently positioned in the neutral zone, drifting lower but still holding above its prior swing lows. This moderation in RSI signals easing bullish momentum and supports the view of a sideways-to-consolidative phase.
On the other hand, the absence of oversold conditions suggests that downside remains contained within the broader trend. Meanwhile, the MACD histogram has slipped into negative territory, with the MACD line trending below its signal line, reflecting short-term momentum fatigue. Importantly, the MACD structure remains relatively flat, indicating that the current weakness is corrective in nature rather than impulsive.
According to O’Neil’s methodology of market direction, Nifty’s breach of the 50-DMA, and 25,700 has shifted the market status to an “Uptrend Under Pressure.” Further deterioration into a downtrend is possible if distribution days continue to rise or if the index fails to hold above its 100- and 200-DMA. Conversely, a decisive breakout above the recent rally high of 26,373 is required to restore a Confirmed Uptrend.
Nifty continues to hover around its 50- and 100-, maintaining a mild negative bias in the near term. On the downside, immediate support is placed at 25,500, with a stronger demand zone seen around 25,300, which is expected to cushion any deeper corrective move. From a trend perspective, the broader uptrend is yet to regain momentum, and a sustained move above 26,000 remains crucial.
Nifty Bank Performance
Nifty Bank opened on a positive note at 59,767.55 and witnessed early volatility during the session. After opening near the day’s high, the index drifted lower to test its intraday low of 59,312.05, where buying interest emerged. The index subsequently bounced back from lower levels, indicating demand for the upcoming short-term support, and managed to close the session in positive territory at 59,578.80, gaining 128.30 points.
The day’s intraday high remained at 59,767.55. Price action suggests that market participants are selectively accumulating banking stocks on dips rather than chasing prices at higher levels. Overall, the session reflected consolidation within an ongoing uptrend, with volatility cooling off after recent sharp moves and buyers continuing to defend key moving average supports on the daily chart.
Momentum indicators continue to present a mixed but constructive setup. The RSI (14) is placed near 53–57, indicating neutral-to-positive momentum and suggesting that the index is neither overbought nor oversold at current levels. This positioning allows room for further upside if buying strength improves. The MACD remains above the zero line, though the histogram shows mild contraction, reflecting a pause in momentum rather than a trend reversal.
According to O’Neil’s methodology of market direction, the index remains in a Confirmed Uptrend. From a broader perspective, momentum consolidation after a strong rally is healthy and often sets the stage for the next directional move.
From a technical perspective, immediate support is placed in 59,300–59,100, aligned with 50-DMA and recent swing lows. A stronger positional support lies near 58,800, which should act as a key downside cushion in the near term. On the upside, resistance is seen around 59,800–60,000, where the index has faced selling pressure in recent sessions.
A decisive close above this zone could open the door for a move toward 60,500–60,800 over the next one to seven trading days. Until then, the index is likely to remain range-bound with a positive bias, favouring buy-on-dips strategies.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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