Indian Markets Turn Negative as Profit Booking Overshadows Early Gains; Nifty Falls Below 24,300

The Indian stock market took a bumpy ride on Friday, starting with optimism but ending in the red due to profit-taking and concerns in specific sectors. Despite a promising start fueled by global and domestic factors, the Sensex and Nifty couldn’t hold onto their gains. Let’s break down what happened, why, and what investors should keep an eye on moving forward.

A Promising Start Fades Away

The day began with a burst of positivity. The Sensex jumped over 800 points, and the Nifty climbed more than 225 points, driven by two key factors:

1. Easing Global Tensions: News of China’s willingness to negotiate trade terms with the U.S. calmed fears of a potential trade war, boosting investor confidence.

2. Foreign Investment Boost: Money flowing in from foreign institutional investors gave the Indian market an extra push.

However, the mood shifted by mid-session. Profit booking—where investors sell stocks to lock in gains—kicked in, particularly in sectors like metals, automobiles, and consumer goods. On top of that, rising tensions between India and Pakistan made investors cautious, capping the market’s upward momentum.

By the end of the session:

• The Sensex closed at 80,217.48, down slightly by 24.76 points (-0.03%).

• The Nifty slipped to 24,252.70, dropping 81.50 points (-0.33%).

More stocks ended the day lower than higher, reflecting a cautious market sentiment.

Winners and Losers: Stocks and Sectors in Focus

Not all stocks moved in the same direction. Some companies and sectors shone, while others struggled:

• Top Gainers:

  • Adani Ports stole the show, soaring over 4% after announcing a 50% jump in its net profit for the January-March 2025 quarter. The company also forecasted strong revenue growth for the year, thanks to booming port volumes and its logistics business.

  • Other winners included Bajaj Finance, IndusInd Bank, State Bank of India, Maruti, Tata Motors, ITC, Tata Steel, and Reliance Industries.

• Biggest Losers:

  • JSW Steel led the declines, falling over 6%, pulling the metal sector down with it.

  • Nestle India, NTPC, Kotak Mahindra Bank, Power Grid, and Titan also ended lower.

From a sector perspective, expert Kewat noted:

• Strong Performers: Oil & Gas, Financial Services, and Information Technology held up well, showing resilience.

• Underperformers: Consumer Durables, Metals, Realty, and Pharmaceuticals faced significant selling pressure.

Kewat described the market as a “roller-coaster,” highlighting the uncertainty that defined the session.

Technical Outlook: Where Are the Markets Headed?

For those who follow market charts, here’s what the technical indicators suggest:

Nifty 50: Poised for a Breakout?

• The Nifty is consolidating, forming a neutral candlestick pattern.

• Key Resistance: 24,450–24,500. Breaking above this could push the index toward 24,700.

• Support Levels: 24,300 is the immediate support, with 24,100 as the next cushion.

• Patterns: A flag and pole pattern on the hourly chart hints at potential upward movement if resistance is cleared.

• Indicators:

  • The RSI (Relative Strength Index) is above 60, showing bullish momentum but nearing overbought territory.

  • The MACD (Moving Average Convergence Divergence) shows a positive crossover, supporting a bullish outlook.

Sensex: Facing Resistance

• The Sensex is hitting a wall near 80,500–80,800, where selling pressure kicks in.

• Support: 79,800 is the level to watch if the index slides further.

• Patterns: A double-top pattern on intraday charts suggests possible short-term weakness or consolidation.

Why Did the Market Turn Negative?

Several factors contributed to the market’s downturn:

1. Profit Booking: After the early surge, investors cashed in profits, especially in metals and consumer goods.

2. Geopolitical Concerns: Tensions between India and Pakistan added uncertainty, making investors hesitant.

3. Sector Weakness: Struggles in metals, consumer durables, and pharmaceuticals dragged the indices lower.

4. Global Uncertainty: While U.S.-China trade talks offered some relief, mixed global signals kept investors on edge.

Tips for Investors: Navigating the Volatility

With the market swinging up and down, here are some practical tips for investors:

1. Watch Key Levels:

   • Keep an eye on Nifty’s 24,450–24,500 resistance for signs of a breakout.

   • If the Sensex falls below 79,800, be prepared for more downside.

2. Focus on Strong Sectors:

   • Consider opportunities in Oil & Gas, Financial Services, and IT, which are holding up well.

   • Be cautious with metals, consumer durables, and pharmaceuticals until they show signs of recovery.

3. Manage Risks:

   • Set stop-losses near support levels (Nifty: 24,100; Sensex: 79,800) to limit losses.

   • Avoid taking big risks in a volatile market.

4. Stay Informed:

   • Monitor global developments, especially U.S.-China trade talks and India-Pakistan tensions.

   • Keep an eye on foreign fund flows, which can influence market direction.

Looking Ahead: Hope Amid Uncertainty

Despite Friday’s negative close, there’s reason for cautious optimism. The Nifty and Sensex are showing technical patterns that suggest potential for an upward move if resistance levels are broken. Strong performances from companies like Adani Ports and sectors like Oil & Gas highlight pockets of opportunity.

However, investors should stay alert. Geopolitical tensions, profit booking, and sector-specific challenges could keep the market volatile. By focusing on key levels, strong sectors, and sound risk management, you can navigate this uncertainty with confidence.

Stay tuned to The Expert SK blog for more updates, and watch Nifty’s 24,450–24,500 and Sensex’s 80,500–80,800 for the next big move!