Stock market today: Nifty 50, Sensex recover smartly from day's low, end flat; small-cap stocks bleed

Indian Stock Market: Strong support from heavyweights, particularly Reliance Industries, helped the front indices avoid another significant drop during Wednesday's trading session.

The entire pack of oil and gas stocks shone brightly today amid rising crude oil prices, driving expectations that higher crude prices will boost the margins of these companies. Despite weak global cues, such as a sell-off in US tech stocks overnight and concerns over a potential delay in the US Fed's rate cut in 2025, the Indian markets managed to rebound smartly from the day's lows.

This recovery, despite the negative sentiment, was driven by the rally in the IT stocks, a strong rebound in ITC shares, and gains in banking stocks, which helped the indices recover from early losses to end the session on a flat note.

However, the broader market failed to extend their winning rally in today's session as the strong selling pressure propelled them to conclude the session in the red.

The Nifty 50 wrapped up the session with a minor drop of 0.08%, closing at 23,688. From the day's low, the index recovered 192 points or 0.81%. Likewise, the Sensex rebounded 666 points, or 0.86%, from the day's low to end the session with a mild cut of 0.06%.

Mid- and small-cap stocks witnessed heavy selling pressure in trade, with the Nifty Smallcap 100 index ending the session with a deep cut of 1.65% at 18,365, while the Nifty Midcap 100 index finished the session with a drop of 1.05%, closing at 56,270 level.

Commenting on today's market performance, Vinod Nair, Head of Research, Geojit Financial Services said, "Slowing economic growth projections and caution ahead of Q3 numbers added volatility in the market. However, the market witnessed a recovery from the day’s low owing to the accumulation of beaten-down blue-chip stocks and in expectation of government reforms in the upcoming budget to lift the tepid economy."

"The near-term sentiment is likely to be subdued due to the rise in US bond yield and fear of fewer rate cuts by the Fed," he added.

Reliance shares post best 1-day gain in over 6 weeks 

Shares of Reliance Industries ended the session with a gain of 2% at 1,265 apiece, marking the biggest intraday gain since mid-November as brokerages turned bullish on the stock after it has corrected 22.40% over the last six months. 

Global brokerage Jefferies lifted its target price on the stock to ₹1950 apiece from ₹1295, while maintaining its 'buy' rating. It said the stock's valuation is currently at its cheapest since the COVID-19 pandemic. The brokerage highlighted medium-term growth challenges, particularly in the Retail segment, and projected lower earnings growth in FY25.

Bernstein, meanwhile, maintained its 'outperform' rating on the stock, setting a target price of ₹1,520. The brokerage expects 2025 to mark a recovery cycle, with earnings growth driven by the Telecom and Retail segments, alongside improving refining margins.

Nifty 50: Key levels and trends 

Vatsal Bhuva, Technical Analyst at LKP Securities said, "The Nifty index is trading within a range of 23,500 to 24200. In Wednesday's session, it formed a hammer candlestick on the daily chart, closing near its 200-day EMA, thereby strengthening the 23,500-support level."

"A decisive move will require the index to close below 23,500, which could lead to heightened selling pressure, or sustain above 24,000 to pave the way for a potential rally toward 24,500. Monitoring these crucial levels is essential to identify the next trend in the index," Vatsal added. 

Shrikant Chouhan, Head of Equity Research, Kotak Securities said, "Technically, after an early morning intraday correction, the market found support near 23,500/77,500 and bounced back sharply, recovering over 175/600 points from its lowest level of the day. We believe that as long as the market is trading above 23,500/77,500, the pullback formation is likely to continue. On the upside, it could bounce back to around 23,800/78,500."

"Further gains may occur, potentially lifting the index to the 200-day Simple Moving Average (SMA) at 23,925/78,900. However, below 23500/77500, sentiment could change; below the same, traders may prefer to exit out from the trading long positions," Shrikant stated.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.