Sensex closes lower but off lows; Nifty holds 24,400

Indian equity benchmarks ended Wednesday's session in the red, but a late-session recovery helped the indices trim most of the day's losses. The Nifty managed to hold the psychologically important 24,400 level, while Bank Nifty displayed relative resilience, closing off its lowest points of the day.

The Sensex, too, pared early declines, though it remained in negative territory at the close. Traders said the market's ability to bounce back from the day's lows provided some comfort, even as the broader sentiment stayed cautious.

Nifty holds key support, Bank Nifty steady

The Nifty50 index closed below its previous close but above the crucial 24,400 mark, a level that market participants have been watching closely. The recovery from the day's low was led by buying in select financial and IT stocks, which helped stabilise the index in the final hours of trade.

Bank Nifty, which tracks the country's major lenders, ended the session with relatively smaller losses compared to the benchmark indices. This suggests that banking stocks are finding some support at current levels, even as concerns over global interest rates and inflation persist.

Volatility persists on global cues

Markets opened on a weak note tracking mixed global signals, with investors keeping an eye on US Federal Reserve comments and crude oil price movements. The early sell-off was broad-based, but value buying emerged at lower levels, particularly in large-cap stocks.

Analysts said the intraday recovery indicates that investors are not panicking, but the lack of sustained buying suggests that the market may remain rangebound in the near term. Foreign institutional investor flows and the rupee's movement against the dollar will be key factors to watch in the coming sessions.

Sectoral performance mixed

While financials and IT showed some resilience, other sectors like auto, metals, and energy ended lower. Midcap and smallcap indices also witnessed profit booking after a recent run-up, though they too recovered from their lows.

The overall breadth of the market remained negative, with more stocks declining than advancing. However, the late recovery in the indices narrowed the decline, leaving traders with a sense that the downside is being bought into.

Market participants are now awaiting fresh domestic triggers, including upcoming macroeconomic data and quarterly earnings from a few large companies. The absence of any major negative domestic news has helped limit the damage.

What to watch next

Going ahead, the sustainability of the 24,400 level on the Nifty will be crucial. A decisive move above recent highs could attract fresh buying, while a break below could accelerate selling pressure.

Investors will also track global cues, especially US bond yields and crude oil prices, for direction. With no major domestic event on the calendar for the rest of the week, the market is likely to take cues from global developments and institutional flows.