Indian Markets Remain Range-Bound as Volatility Drops

Indian equity benchmarks Sensex and Nifty 50 ended the trading session on February 25 with minimal movement, reflecting a lack of strong directional cues. While select auto and FMCG stocks provided support, IT, metal, and realty stocks witnessed selling pressure.

At the closing bell:

The Sensex gained 147.71 points (0.20%), closing at 74,602.12.
The Nifty 50 slipped marginally by 5.80 points (0.03%), ending at 22,547.55.
The broader market sentiment was negative, with 1,612 advancing stocks, 2,166 declining, and 127 remaining unchanged.

Sectoral Trends: Auto and FMCG Lead, Metals and Realty Underperform

Market performance remained mixed, with select sectors showing strength while others faced selling pressure:

Gainers: Auto, Consumer Durables, FMCG, and Telecom stocks gained 0.5% each, indicating strong investor interest.
Losers: IT, Metal, Oil & Gas, Energy, Capital Goods, PSU Banks, and Realty sectors witnessed a decline of 0.5-1%, dragging the overall market sentiment lower.
The BSE Midcap and Smallcap indices dropped 0.5% each, reflecting weakness in broader markets.

Technical Analysis: Nifty 50 Forms Inverted Hammer, Indicating Potential Reversal

The Nifty 50 index saw a negative opening, traded within a tight consolidation range, and ended flat-to-negative at 22,548.

On the daily chart, the index formed an inverted hammer candlestick pattern, which typically signals a potential reversal and buying interest at lower levels.
The immediate support level is at 22,400, and a breakdown below this could trigger further downside pressure.
On the upside, resistance is seen at 22,700-22,800, and a sustained move beyond this range could signal a fresh rally.

Bank Nifty Analysis: Strong Resistance at 49,650, Support at 47,840

The Bank Nifty index also faced selling pressure at higher levels, closing the session at 48,608.

The daily chart shows a red candle with a long upper shadow, suggesting profit booking at higher levels.
Key support: 47,840, where buyers are likely to step in.
Key resistance: 49,650, which remains a crucial barrier for any upward movement.
If Bank Nifty fails to hold above 48,000, it could invite short-term selling pressure, while a breakout above 49,650 may trigger fresh buying interest.

Stock in Focus: M&M Gains 3% on Strong Brokerage Calls

Shares of Mahindra & Mahindra (M&M) surged 3%, extending their two-day winning streak after receiving positive ratings from brokerage firms.

The stock had seen a sharp correction last week, marking its biggest single-day fall in nearly seven months on February 21.
Concerns over Tesla’s entry into the Indian market had weighed on sentiment, but recent upgrades and bullish outlook from analysts helped the stock recover.
Strong demand in the domestic auto market and robust sales growth projections are driving renewed investor interest in M&M and other auto sector stocks.

Volatility Index Drops: India VIX Down 5%

The India VIX (Volatility Index) declined 5.03% to 13.72, signaling lower market uncertainty.

A decline in India VIX indicates that investors are less fearful of sudden market swings.
However, traders should remain cautious as global economic factors, foreign institutional investor (FII) activity, and corporate earnings will continue to influence market sentiment.

Market Outlook: Key Levels to Watch Ahead of the Holiday Break

The Indian stock market will remain closed on February 26 on account of Mahashivratri.

Nifty 50 key levels: 22,400 (support) and 22,800 (resistance).
Bank Nifty key levels: 47,840 (support) and 49,650 (resistance).
Sectoral rotation will play a major role in upcoming sessions, with auto and FMCG stocks continuing to attract investor interest, while metals and realty stocks may remain under pressure.
Traders should also monitor global cues, crude oil prices, US market trends, and foreign investor flows, as these factors could drive the next market move.

With lower volatility and a cautious market sentiment, investors may look for stock-specific opportunities instead of broad-based moves in the near term.