Global markets are starting the day with caution after a sharp overnight sell-off in the US. The S&P 500, Nasdaq, and Dow extended their losing streak as investors booked profits in high-valuation technology and AI stocks. This sell-off is due to renewed skepticism around AI capex returns and a rotation toward defensive sectors, causing investors to stay defensive and avoid aggressive positioning.
Asian markets have opened on a weak note, mirroring the subdued tone on Wall Street. This pressure is likely to affect Indian equities at the open. However, the selling seen so far does not reflect panic; instead, it appears to be a valuation-led reset following a strong rally, rather than any indication of a structural breakdown.
The Indian stock market sentiment has turned weak as the Nifty 50 index fell further and finished around the 25,800 level, which is close to the 50-DEMA support placed at around 25,750. If the 50-stock index breaks below this support, it may attempt to test the 25,500 to 25,400 levels. On the upper side, the key benchmark index is facing a hurdle at 26,000.
Vaishali Parekh, Vice President of Technical Research, believes that the Nifty 50 index witnessed another day of profit booking, which ended above the 25,800 zone with bias slightly weakened. She says that a revival is needed to maintain the bias intact, with major support near the 25,700 zone.
For the Bank Nifty index, Parekh said that a decisive breach above the 59,500 zone is necessary to expect a fresh upward move in the coming days, having the higher target of the 60,000 level, with the crucial near-term support positioned near the 50-DEMA level of 58,300.
Parekh recommended three buy-or-sell stocks for intraday trading: GNA Axles, Grasim Industries, and ONGC.
Remember, this is a perspective, not a prediction. Do your own research and check with certified experts before making any investment decisions.
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