Can Sensex and Nifty Overcome Early Losses Amid Profit Booking?
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Synopsis
The Indian stock markets faced a rough start on Tuesday, dropping sharply before regaining some of their losses. With profit booking in play, analysts suggest that this phase may be a good opportunity for investors to acquire quality stocks. Will the Sensex and Nifty maintain their upward momentum?
Key Takeaways
- Market volatility continues as profit booking takes hold.
- Nifty shows bullish trend with support at 26000-26050.
- Selective buying helps Sensex limit losses.
- Small-cap segment remains overvalued.
- Bank Nifty shows potential for resilience.
Mumbai, December 2 (NationPress) The Indian stock markets began Tuesday with a significant drop, but quickly managed to regain some ground as investors opted for profit-taking following a recent surge.
The Sensex was hovering around 85,508, down 134 points or 0.16 percent, while the Nifty dipped 31 points or 0.12 percent to 26,145.
Market analysts noted that the positional trend of the Nifty remains optimistic, with robust support at the 26000-26050 range. Conversely, resistance may arise around 26300 on a closing basis.
Major stocks like HDFC Bank, ICICI Bank, Ultratech Cement, Axis Bank, Bajaj Finserv, Tata Steel, Tata Motors PV, Titan Company, and Power Grid dragged the indices lower.
Additionally, Eternal faced pressure during the early trading hours.
Nonetheless, selective buying in companies such as Asian Paints, Infosys, Bharti Airtel, Bajaj Finance, SBI, Maruti Suzuki, NTPC, HUL, and L&T helped the Sensex restrict its losses and make a modest recovery.
In the broader market, the Nifty MidCap index saw a rise of 0.27 percent, reflecting some interest in mid-cap companies, while the Nifty SmallCap index fell by 0.12 percent.
From a sector perspective, financial stocks were among the poorest performers, with the Nifty Financial Services index declining by 0.7 percent and the Nifty Bank index falling by 0.4 percent.
In contrast, the Nifty PSU Bank index surged 0.9 percent, establishing itself as the top performer, trailed by the Nifty Auto index, which increased by 0.4 percent.
Analysts indicated that market volatility persists as traders continue to secure profits against a backdrop of mixed global cues.
"Investors can utilize this consolidation phase to gradually acquire fundamentally strong large-cap and growth-focused mid-cap stocks, which are likely to drive the next market rally," analysts commented.
The small-cap sector remains overvalued. Despite recent gains, the Bank Nifty has the potential to provide market resilience due to favorable valuations in this segment, with a notable uptick in credit growth offering additional optimism.
Point of View
I emphasize the importance of remaining vigilant in today’s volatile market climate. Profit booking is a natural response to recent gains, and investors should carefully consider their strategies moving forward. The current market dynamics present both risks and opportunities that deserve close attention.
NationPress
02/12/2025
Frequently Asked Questions
What caused the initial drop in the stock market?
The initial drop was primarily due to profit booking by investors following a recent rally.
Which sectors performed well today?
The Nifty PSU Bank index and the Nifty Auto index were among the top performers, gaining 0.9% and 0.4% respectively.
What should investors do during this volatility?
Investors are advised to gradually accumulate fairly valued large-cap and growth-oriented mid-cap stocks.
