Nifty 50 drops 0.5% on US inflation caution while Bank Nifty gains
Indian benchmark indices retreated on profit-taking ahead of US inflation data, though private lenders drove the banking gauge higher amid cautious technical signals for the broader market.
Indian benchmark indices retreated on Wednesday as investors locked in profits ahead of key US inflation data. The Sensex fell 183 points to close at 77,472.94, while the Nifty 50 dropped 127 points to settle at 24,207.75.
The broader market displayed mixed resilience, with the Nifty Smallcap 250 gaining 0.60% and the midcap index finishing largely unchanged. Conversely, the Bank Nifty outperformed the broader market, rising 269 points to 57,783.75, driven by strong buying interest in private lenders Kotak Mahindra Bank and Axis Bank.
The Nifty 50 faced rejection near its 200-day exponential moving average around 24,375, slipping steadily to close at the day’s low. Sumeet Bagadia, executive director at Choice Broking, noted that while the price action was weak, the derivatives setup offers a cushion against further declines.
“Despite the weak price action, the derivatives setup remains relatively supportive, with PCR at 1.20 and Put OI concentrated around 24,200–24,000,” Bagadia said. He highlighted that India VIX eased to 10.57, suggesting limited volatility, but emphasized that the index must defend the 24,100 to 24,000 zone to preserve its broader recovery structure.
Meanwhile, the banking gauge is testing critical technical thresholds. “The index is now approaching the important 57,850–58,000 resistance band, and a sustained breakout above this zone would strengthen the near-term outlook,” Bagadia explained. He noted that holding above 57,200 remains vital to maintain the prevailing recovery structure.
Looking ahead to Thursday, Bagadia identified five breakout stocks for market participants. Rossell Techsys is recommended for purchase at ₹1,100 with a target of ₹1,190, while Yatharth Hospital is tipped at ₹965 targeting ₹1,050 after hitting an all-time high.
Indigo Paints is set with a buy price of ₹1,186 and a target of ₹1,280, maintaining a strong bullish structure above its major moving averages. Lumax Industries, which gained over 4% on Wednesday, is recommended at ₹6,160 targeting ₹6,700, alongside Kross, which is advised at ₹218 with a target of ₹235.
