Markets remain in stalemate: NIFTY50 flat, Mid and Smallcaps slide

Indian markets closed flat on Tuesday, supported by buying in few large-cap stocks. The benchmark NIFTY 50 was flat at 22,335 while the SENSEX was marginally higher by 0.2% at 73,667.

However, sentiment in the broader market remained weak. The NIFTY Midcap 100 and Smallcap 100 indices fell by over 1% and 2% respectively. Notably, the Smallcap index has now corrected almost 10% from its recent all-time high.

Barring IT (+0.6%), all the major sectoral indices extended their declines and closed in the red. Real Estate (-3.7%), PSU Banks (-2.5%) and Metals (-1.7%) were the worst performers.

The NIFTY50 index ended the day with a doji pattern, reflecting indecision in the market. Index heavyweights like HDFC Bank (+2.2%), TCS (+1.6%), Reliance Industries (+0.6%) and Infosys (+0.7%) provided crucial support.

As mentioned in our morning trade setup blog, the immediate support zone for the NIFTY50 lies between 22,200 and 22,250. A decisive close below this zone and the 20-day moving average (DMA) could trigger a further decline towards the next support level, the 50-DMA, currently around 21,900. On the upside, immediate resistance remains at 22,500.

Key highlights of the day:

💸AB Capital’s (+1.9%) board approved the merger of its subsidiary Aditya Birla Finance with itself to create a large NBFC.

🔥ITC slipped over 1% after reports suggested that the British American Company (BAT) may sell a part of it stake in the company this week.

💻Oracle Financial Services (+1.9%) shares jumped in India, tracking the parent company's gains, after Oracle Corp's Q3 results beat Wall Street’s estimates.

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See you tomorrow!